Memorandum

Adocia 1Q18 – Top priority remains securing development partner to advance ultra-rapid-acting BioChaperone Lispro into phase 3; Phase 1 underway for BC Pramlintide Insulin for T1D; ~$34 million cash position – April 23, 2018

Executive Highlights

  • In Adocia’s recent 1Q18 update, management reaffirmed their commitment to securing a development partner to advance ultra-rapid-acting BioChaperone Lispro into phase 3. BC Lispro demonstrated significantly faster offset and similar onset vs. Novo Nordisk’s next-gen Fiasp (faster-acting insulin aspart) in topline results from the first-ever head-to-head trial of ultra-rapid-acting insulins.

  • Adocia also announced the beginning of phase 1 trials for BioChaperone Pramlintide Insulin, a fixed-ratio combination of pramlintide (AZ’s amylin analog Symlin) and human insulin for type 1 diabetes. This study is expected to complete in 3Q18, and if results are positive (so exciting!), BC Pramlintide Insulin could be a promising advanced approach to postprandial glucose control for type 1s.

  • Notably, Adocia is officially entering obesity R&D with BioChaperone Glucagon Exenatide – phase 1, in-human trials are slated to start in 4Q18. This candidate is a fixed-ratio combination of glucagon + GLP-1 agonist exenatide (AZ’s Bydureon). To be sure, GLP-1/glucagon dual agonists are showing promising weight loss efficacy; Sanofi, OPKO Health, and Novo Nordisk are also developing candidates in this drug class toward an obesity indication.

  • In recent months, Adocia has shared positive topline data from phase 1 studies of liquid-stable BioChaperone Glucagon and BioChaperone Combo (75/25 insulin glargine/insulin lispro). The company is seeking a development/commercialization partner for the latter, with a focus on China and other emerging markets where premix insulin constitutes a substantial component of total insulin prescriptions.

  • Adocia closed 1Q18 with ~$34 million in cash and cash equivalents remaining, down from €35 million (~$41 million) in 4Q17 and €52 million (~$55 million) in 1Q17.

Adocia provided its 1Q18 update last week via press release and an accompanying slide deck. This report contains seven detailed highlights, plus a pipeline summary table outlining the company’s major diabetes and obesity candidates.

Top Seven Highlights

1. Adocia’s No. 1 Priority: Partnering for Phase 3 Development of Ultra-Rapid BioChaperone Lispro, On Heels of Promising Topline Results in Phase 2 Head-to-Head vs. Fiasp

Management reiterated that Adocia’s main priority is securing a development partner to advance ultra-rapid-acting BioChaperone Lispro into phase 3 (see slide 12). A great deal of potential surrounds this candidate, which demonstrated significantly faster offset vs. Novo Nordisk’s next-gen Fiasp (faster-acting insulin aspart) in topline results from the first-ever head-to-head trial of ultra-rapid-acting insulins (full results are expected at a “major meeting in 2018” – very possibly ADA). Onset time was similar between BC Lispro and Fiasp. Adocia’s candidate was superior to Novo Nordisk’s NovoLog (insulin aspart) for both onset and offset time, corroborating previous findings that BC Lispro is significantly faster-acting than Lilly’s Humalog (insulin lispro), and solidly placing the candidate within the emerging class of ultra-rapid-acting insulins. While impressive, this phase 2 head-to-head study was rather small (n=42 patients with type 1 diabetes on a pump). Nonetheless, in line with this topline data, Adocia positioned BC Lispro as an eventual “differentiated competitor” to Fiasp in 1Q18 presentation materials. Of note, BC Lispro could reach a broad spectrum of type 1s and type 2s since it has been well-characterized with consistent results for both pumps and MDI. Fiasp has not been approved for pump use in the US or Canada, though it is indicated by EMA for insulin pumps. In Onset 5, presented recently at ATTD, Fiasp showed postprandial efficacy in type 1 pumpers (n=472), so it’s possible that faster-acting aspart will eventually be approved by FDA with this expanded indication, though we haven’t heard any comments on this from Novo Nordisk. On a previous call with our team, Adocia management noted that the company will meet with FDA in 2018 to discuss plans for phase 3 trials of BC Lispro. They also mentioned that a go-alone pathway isn’t off the table, although Adocia would ideally like to secure a dedicated partner for product development and commercialization. We’ve heard no specific updates on possible partnerships, and we await further details.

  • As background, Lilly terminated its licensing agreement for BioChaperone Lispro in January 2017, choosing instead to focus on its own internally-developed ultra-rapid-acting insulin candidate LY900014, now in phase 3. This is the subject of two separate arbitration proceedings: In October 2017, Adocia filed for $11 million in arbitration claims because of Lilly’s sudden change of the BioChaperone Lispro development plan. In February 2018, Adocia claimed additional damages of >$200 million because of Lilly’s purported breach of collaboration and confidentiality agreements. These legal proceedings are expected to conclude in 1H18 and 2H18, respectively.

2. BioChaperone Pramlintide Insulin Enters Phase 1 for Type 1 Diabetes; Fixed-Ratio Insulin/GLP-1 Combos Remain in Preclinical Stage

Just hours after the earnings update, Adocia announced in a separate press release that BioChaperone Pramlintide Insulin, a fixed-ratio combination of pramlintide (AZ’s amylin analog Symlin) and human insulin, has entered phase 1 for type 1 diabetes. The three-armed study (n=24) will compare the PK/PD profiles of BioChaperone Pramlintide Insulin vs. simultaneous injections of pramlintide and human insulin vs. insulin lispro (Lilly’s Humalog). The trial is expected to complete in 3Q18. Notably, this is the first we’ve heard about BioChaperone Pramlintide Insulin, though the company’s interest in insulin/amylin co-formulations was foreshadowed by the addition of a BioChaperone coformulation of insulin lispro and pramlintide to the preclinical pipeline in January 2017 (more on this below). In our view, this emerging class represents a promising advanced approach to postprandial glycemic control. Adocia’s presentation (slide 18) positions amylin as the “other missing hormone in diabetes.” Like insulin, amylin secretion is extremely low in type 1 diabetes and is altered in type 2 diabetes. In people without diabetes, amylin is naturally co-secreted with insulin and plays an important role in slowing gastric emptying, inhibiting glucagon, and inducing satiety. Amylin analogs such as Symlin are effective for postprandial glucose control in both type 1 and type 2 diabetes, but this class has failed to gain substantial commercial traction – in large part due to the additional injection burden, hence the value of a coformulation with insulin. At Diabetes Canada 2017, Dr. Matthew Riddle argued that amylin analogs (alongside short-acting GLP-1 agonists) are the future of optimal prandial glucose control, drawing upon “early but very promising data” from ADA 2017 demonstrating improved postprandial control using dual infusions of pramlintide and human regular insulin (the two components of BioChaperone Pramlintide Insulin) vs. rapid-acting insulin alone in 31 type 1s. CGM data revealed that post-meal blood glucose was >180 mg/dl only 3% of the time with pramlintide vs. 39% of the time with placebo (p=0.03). We certainly look forward to seeing whether a single injection of BioChaperone Pramlintide Insulin can replicate this, and whether this promising effect stands up in larger, longer trials.

  • Adocia’s BioChaperone co-formulation of insulin lispro with pramlintide remains in the preclinical stage, despite previous plans to launch phase 1 trials by end of 2017. Management confirmed that the lispro/pramlintide program is still alive despite this decision to prioritize BioChaperone Pramlintide Insulin (discussed above).

  • Also stalled in preclinical development is Adocia’s BioChaperone co-formulation of insulin glargine + liraglutide (Novo Nordisk’s Victoza), which was also expected to enter phase 1 by end of 2017. Although it’s a long way off, we remain keenly interested to see how Adocia’s candidate will fare in the competitive landscape for basal insulin/GLP-1 fixed-ratio combinations. Adocia’s preclinical pipeline also features BioChaperone co-formulations of insulin glargine + dulaglutide (Lilly’s Trulicity) and insulin lispro + exenatide (AZ’s Byetta), the first and only rapid-acting insulin/GLP-1 fixed-ratio combination in development, as far as we’re aware. The competitive landscape includes another phase 1 candidate from Lilly, as well as preclinical candidates from PhaseBio and AntriaBio. Basal insulin/GLP-1 combos already on the market – Novo Nordisk’s Xultophy (insulin degludec/liraglutide) and Sanofi’s Soliqua (insulin glargine/lixisenatide) – boast an impressive clinical profile with superior A1c-lowering efficacy and milder side-effects vs. either monotherapy, but commercial uptake has been extremely disappointing to-date. We attribute this to poor reimbursement and HCP reluctance to prescribe these agents. Moreover, we recently learned from Prof. Philip Home that many diabetologists consider GLP-1s a “pre-insulin” therapy due to their ease of use and cleaner side-effect profile, making fixed-ratio combinations with insulin seemingly illogical. The fixedness can also be a problem, since some HCPs might want to combine Lantus with Victoza or Trulicity, the most familiar agents in each class. Adocia could provide that product with BioChaperone insulin glargine/liraglutide or insulin glargine/dulaglutide, though again, these candidates remain very early-stage. Optimistically, we hope this therapy class will gain more traction in the coming months and years, so that by the time Adocia’s and other candidates reach late-stage development, there is a thriving market for these highly-effective drugs. We’re curious how Adocia might position its own product given that insulin glargine and liraglutide will likely be off-patent by the time it reaches the commercial scene. Perhaps Adocia will offer its combinations at a discount, as a kind of biosimilar, which would be a significant win for patients.

3. Liquid-Stable BioChaperone Glucagon Demonstrates Safety/Efficacy in Phase 1; Non-Inferior to Reconstituted Glucagon (Novo Nordisk’s GlucaGen)

Adocia highlighted recent positive topline results from the first in-human study of liquid-stable BioChaperone Glucagon, which is being developed both as a rescue treatment for severe hypoglycemia and for use in a dual hormone closed loop system. Following medically-induced hypoglycemia of 50-60 mg/dl, a single injection of Adocia’s glucagon was non-inferior to traditional reconstituted glucagon (Novo Nordisk’s GlucaGen) in terms of median time to reach blood glucose 70 mg/dl (11 vs. 7 minutes). All participants (n=49) achieved hypoglycemia resolution within 35 minutes. BioChaperone Glucagon showed a similar safety/tolerability profile vs. reconstituted glucagon; for both, the most frequent adverse event was nausea. Adocia is joined on the next-gen glucagon competitive landscape by several phase 3 candidates: Lilly’s nasal glucagon (on track for a 2018 FDA submission), Xeris’ G-Pen (FDA submission expected 2Q18), and Zealand’s dasiglucagon (FDA submission expected 2019). We’re pleased to see such a robust competitive landscape for hypoglycemia rescue. In our view, current glucagon offerings are not good enough (reconstitution kits are time-consuming and error-prone), and we see more than enough room for multiple next-gen products to be successful in this longstanding area of unmet need. 

  • Adocia’s slide deck alludes to additional potential indications for BioChaperone Glucagon in post-bariatric surgery hypoglycemia and congenital hyperinsulinism (CHI), a rare genetic condition characterized by excessive insulin secretion (slide 21). We’ve heard no specific clinical development plans on this front, but this seems like a strategic move given the user-friendliness of this ready-to-inject glucagon over traditional reconstituted options. Notably, Zealand’s dasiglucagon is in phase 3 for CHI, on the strength of an Orphan Drug Designation from both the FDA and EMA.

4. BioChaperone Combo (Insulin Glargine/Lispro): Adocia Seeking Development Partner for China and Emerging Markets Following Positive Phase 1b Readout

Adocia also highlighted positive topline results from a phase 1b study of BioChaperone Combo (75/25 basal insulin glargine/prandial insulin lispro); this data was initially announced in late January. The study found a faster-acting prandial effect and a longer-lasting basal effect with Adocia’s candidate vs. Lilly’s Humalog Mix25 in patients with type 2 diabetes (n=32). A 0.8 U/kg dose of BC Combo showed significantly faster onset measured by area under the curve for glucose infusion rate 0-2 hours (p=0.002). This same dose demonstrated a lower late-prandial effect measured by area under the curve for glucose infusion rate 3-6 hours (p=0.0007) and a stronger late basal effect measured by area under the curve for glucose infusion rate 24-36 hours (p=0.0027). In conjunction with similar findings from a previous phase 1/2 study completed in 2Q17, this data encouragingly points toward less post-meal hypoglycemia with BioChaperone Combo – a key limitation of traditional premix insulin.

  • Adocia aims to find a development partner for BioChaperone Combo in China and other emerging markets, where premix insulin accounts for a large portion of the overall insulin market (65% by volume in China). Although we’d prefer to see insulin therapy move more toward next-generation basal (Tresiba, Toujeo) and prandial (Fiasp) insulin, we acknowledge that premix insulin is of course more affordable and more user friendly than a basal-bolus regimen for many people with diabetes, and we’re happy to note a more hypoglycemia-friendly premix option on the horizon.

5. Adocia Forays into Obesity R&D with BioChaperone Glucagon Exenatide; Phase 1 Investigations to Begin 4Q18

According to the company’s slide deck (slide 25), in-human trials of BioChaperone Glucagon Exenatide for obesity are slated to begin in 4Q18. Adocia announced the expansion of its preclinical pipeline to include this fixed-ratio combination for obesity back in January 2018. Excitement abounds about the potential for increased energy expenditure and weight loss with GLP-1/glucagon dual agonists, and to this end, Adocia’s candidate joins a robust competitive landscape: Sanofi will launch phase 3 studies of its glucagon/GLP-1 candidate this year, OPKO Health has a phase 2 candidate in development toward an obesity indication, and Novo Nordisk has both a glucagon/GLP-1 dual agonist and a glucagon/GLP-1/GIP triple agonist in phase 1 for obesity.

  • Notably, the addition of this obesity candidate marks a turning point in Adocia’s previously diabetes-focused portfolio. Alongside BioChaperone Glucagon Exenatide, the company simultaneously added a new preclinical GLP-2 agonist teduglutide for short bowel syndrome. This move fits with an overarching trend of diabetes companies expanding R&D into adjacent indications, particularly obesity and NASH (both of which are highly comorbid with type 2 diabetes). The under-diagnosis and under-treatment of obesity (combined with skyrocketing prevalence) makes for high market potential: Adocia’s 1Q18 presentation emphasizes that obesity affects 37% of US adults and 13% of adults globally. Of course, to realize this market potential, companies will need to promote an understanding of obesity as a treatable medical disease. Enhancing reimbursement will also be key, though this is a long way off for Adocia.

6. No New Updates on HinsBet (Rapid-Acting Human Insulin); Adocia Plans to License the Phase 3-Ready Candidate to a “Regional Player” in Emerging Markets

Adocia intends to license phase 3-ready HinsBet (rapid-acting human insulin) to a “regional player” in emerging markets to support its continued development and launch. We’ve heard no new updates on HinsBet over the past several quarters, which reflects Adocia’s laser-focus on BioChaperone Lispro (also phase 3-ready). Most recently in 4Q16, management reported positive phase 2a results for HinsBet. The study (n=36) was a randomized, double-blind, three-treatment, three-period cross-over trial comparing HinsBet vs. Lilly’s Humulin and Humalog (insulin lispro), and it met its primary endpoint of superior postprandial glucose control vs. Humulin on a one-hour meal test (p=0.0002). HinsBet was non-inferior to Humalog on this endpoint (p=0.537).

7. Adocia Closes 1Q18 with ~$34 Million in Cash

As of March 31, Adocia had €28 million (~$34 million) in cash and cash equivalents remaining, down from €35 million (~$41 million) in 4Q17 and €52 million (~$55 million) in 1Q17. Management once again attributed this diminished cash position to the continued progress of many clinical development programs – all of which are now entirely financed by Adocia in the aftermath of Lilly’s termination of the BioChaperone Lispro partnership. Adocia’s commentary on its cash position was generally neutral, but we’re optimistic that this will enable the company to continue financing its metabolic disease-focused portfolio.

Adocia Diabetes/Obesity Pipeline Summary

The table below reflects the latest updates, as far as we are aware, on Adocia’s diabetes/obesity-related pipeline products. Items highlighted in yellow indicate notable changes to the pipeline in recent months.

Product

Indication

Status

Timeline/Notes

BioChaperone Lispro (ultra-rapid-acting insulin)

Type 1 and type 2 diabetes

Phase 3-ready

  • Adocia’s “top priority” is securing a development partner for phase 3, in the aftermath of Lilly’s termination of the licensing agreement

  • Positive topline phase 1b results released in December 2017; Candidate showed significantly faster offset vs. Novo Nordisk’s Fiasp in first-ever head-to-head comparison of ultra-rapid-acting insulins

HinsBet (rapid-acting human insulin)

Type 1 and type 2 diabetes

Phase 3-ready

  • Adocia plans to license to a “regional player” in emerging markets for phase 3

  • Positive phase 2a results reported in 4Q16

BioChaperone Combo (75/25 insulin glargine/insulin lispro premix)

Type 1 and type 2 diabetes

Phase 1

BioChaperone Glucagon (liquid-stable glucagon)

Ready-to-inject hypoglycemia rescue treatment (type 1 and type 2 diabetes); Component of  dual hormone AP (type 1 diabetes)

Phase 1

  • Positive topline phase 1 results reported in 4Q17

  • Added to pipeline in 2Q16

BioChaperone Pramlintide Insulin (pramlintide/human insulin)

Type 1 diabetes

Phase 1

  • Phase 1 trial initiated April 2018; Expected to complete in 3Q18

BioChaperone Insulin Lispro/Pramlintide

Type 1 diabetes

Preclinical

BioChaperone Insulin Lispro/Exenatide

Type 2 diabetes

Preclinical

BioChaperone Insulin Glargine/Liraglutide

Type 2 diabetes

Preclinical

BioChaperone Insulin Glargine/Dulaglutide

Type 2 diabetes

Preclinical

BioChaperone Glucagon Exenatide

Obesity

Preclinical


  • Added to pipeline in January 2018 as one of Adocia’s first non-diabetes candidates

 

-- by Abigail Dove, Payal Marathe, and Kelly Close