Memorandum

Adocia 3Q17 – Phase 2 study comparing BioChaperone Lispro vs. Fiasp nearly complete, company still seeking partner for phase 3; Phase 1 readouts on BioChaperone Glucagon + BioChaperone Combo expected by year-end; ~$52 million cash position – November 6, 2017

Executive Highlights

  • In Adocia’s 3Q17 update, management reinforced that the company’s foremost priority is advancing ultra-rapid-acting BioChaperone Insulin Lispro into phase 3 trials. Evaluation continues for a new licensing partner (following Lilly’s unexpected termination of the previous agreement in January). In the meantime, a phase 2 study comparing the candidate to Novo Nordisk’s Fiasp (faster-acting insulin aspart) and NovoLog (insulin aspart) is expected to complete by year-end. This marks the first trial to compare two ultra-rapid-acting insulins head-to-head, and we’re eager to see the results.
  • Phase 1 results are expected by year-end for ongoing studies of Adocia’s BioChaperone Combo (insulin glargine/insulin lispro) and liquid-stable BioChaperone Glucagon.
  • Two preclinical multi-hormone combination products – BioChaperone insulin lispro/pramlintide (AZ’s amylin analogue Symlin) and BioChaperone insulin glargine/liraglutide (Novo Nordisk’s GLP-1 agonist Victoza) – are expected to enter phase 1 by the end of 2017.
  • Adocia’s cash position remains strong at ~$52 million in cash and cash equivalents as of September 30, 2017. In 3Q17, Dr. Stanislav Glezer joined the company as its new CMO after positions at Novo Nordisk and Sanofi. He brings terrific diabetes background to his new post, including experience as Sanofi’s Global Leader of next-generation basal insulin Toujeo and a key bright spot within Sanofi’s diabetes business and within the insulin marketplace as a whole.

Adocia recently provided its 3Q17 update via press release. This report contains six detailed highlights on the company’s diabetes pipeline (several insulin candidates as well as insulin-containing combinations and a liquid-stable glucagon candidate), current cash position, and management changes.

Top Six Highlights

1. Adocia’s Top Priority: Phase 3-Ready Ultra-Rapid-Acting BioChaperone Insulin Lispro, Completing Phase 2 Head-to-Head vs. Fiasp and NovoLog and Finding New Development Partner

Management once again emphasized that Adocia’s main priority is to advance ultra-rapid-acting BioChaperone Insulin Lispro into phase 3 trials. Results from an ongoing phase 2 study comparing the candidate to Novo Nordisk’s Fiasp (faster-acting insulin aspart) and NovoLog (insulin aspart) are expected by year-end. BioChaperone Lispro was previously under development in partnership with Lilly, but in an unexpected announcement at the end of January, Lilly terminated this licensing agreement to focus on its own internally-developed ultra-rapid insulin lispro candidate. This is now the subject of a new arbitration proceeding, in which Adocia is seeking compensation of $11 million because of Lilly’s sudden change of the BioChaperone Lispro development plan. According to management, the legal proceedings are expected to conclude in 1H18. Meanwhile, the rights for BioChaperone Lispro have reverted back to Adocia, and the company is continuing preparations for phase 3 while seeking a new clinical partner. The phase 2 study, initiated in June 2017, is the first clinical trial to examine two ultra-rapid insulin formulations head-to-head (BioChaperone Lispro vs. Fiasp). It also marks the first new study of BioChaperone Lispro since Lilly terminated its licensing agreement. Adocia management has previously expressed optimism that this clinical trial will underscore the value of BioChaperone Lispro (which has completed six positive phase 1/2 studies, including a particularly promising one presented at ADA 2016), perhaps helping to secure a new partner to advance the candidate into phase 3.

  • The phase 2 study will compare the PK/PD profile of BioChaperone Lispro vs. Fiasp and NovoLog in participants with type 1 diabetes using an insulin pump (n=42). Participants will receive single doses (0.15 units/kg) of BioChaperone Lispro, Fiasp, and NovoLog via insulin pump on three separate dosing visits in a randomized, double-blind design. BioChaperone Lispro has demonstrated an accelerated insulin action profile vs. traditional prandial insulins in multiple phase 1 and 2 studies, in people with both type 1 and type 2 diabetes, using both insulin pumps and syringes. Now, we’re eager to see how the candidate stacks up against another ultra-rapid-acting insulin, especially since marketing around Fiasp has emphasized the faster-on, faster-off nature of the product. EMA-approved in January 2017 and FDA-approved in September 2017 (after a Complete Response Letter), Fiasp is a first-in-class ultra-rapid-acting insulin, and stands to be one of BioChaperone Lispro’s biggest commercial competitors (along with Lilly’s internally-developed candidate) should it progress into phase 3 development and eventually reach the market.

2. BioChaperone Combo (Insulin Glargine/Insulin Lispro) and Liquid-Stable BioChaperone Glucagon: Phase 1 Readouts Expected by End of Year

Phase 1 results are expected by year-end for ongoing studies of BioChaperone Combo (insulin glargine/insulin lispro) and liquid-stable BioChaperone Glucagon. Launched in 2Q17, the phase 1 study of BioChaperone Combo is assessing the agent’s PK/PD profile at three different doses (0.6 units/kg, 0.8 units/kg, and 1.0 units/kg) vs. 0.8 units/kg Humalog Mix25 in people with type 2 diabetes (n=32). According to Adocia’s 2Q17 update, this dose-response study and a two-week outpatient study (slated for a 4Q17 start) are together meant to prepare this candidate for entry into phase 3, though we haven’t heard any updates on the outpatient study since then. Additional clinical data supporting the advancement of BioChaperone Combo comes from a phase 1/2 study completed in 2Q17. Topline results showed that the candidate reduced postprandial glucose excursions by a statistically significant 18% vs. Humalog Mix25 in people with type 2 diabetes, and also resulted in significantly less hypoglycemia vs. Humalog Mix25. BioChaperone Combo was non-inferior to basal/bolus therapy with Sanofi’s Lantus and Lilly’s Humalog on these outcomes. This trial complements existing positive results for the candidate in people with type 1 diabetes, presented by Dr. Steve Edelman at ADA 2016. We imagine Adocia will look to partner for phase 3 development of BioChaperone Combo, but we have yet to hear any specifics on this front. It will be interesting to see if perhaps a single partner may purchase Adocia’s entire BioChaperone portfolio.

  • The first in-human study of Adocia’s liquid-stable BioChaperone Glucagon is expected to complete in November 2017. The candidate is being developed as a rescue treatment for severe hypoglycemia and for use in a dual hormone closed loop system. Launched in 2Q17, this phase 1 trial is evaluating the safety and PK/PD parameters of two different formulations of injectable BioChaperone Glucagon vs. Novo Nordisk’s GlucaGen rescue treatment in people with type 1 diabetes. Adocia’s candidate joins several other soluble glucagon formulations in the pipeline, including Zealand’s dasiglucagon (recently entered phase 3), Xeris’ line of G-Pen glucagon autoinjectors (phase 3), and Lilly’s soluble glucagon candidate (phase 1). We are very pleased to see this progress toward a more patient-friendly alternative to the complex, error-prone native glucagon kits – a longstanding area for improvement in diabetes care. See our glucagon competitive landscape for a complete overview.

3. Multi-Hormone Combinations, Insulin Lispro/Pramlintide and Insulin Glargine/Liraglutide, Slated to Enter Phase 1 Studies by Year-End; Expanding Competitive Landscape for Basal Insulin/GLP-1 Combos

Adocia announced that its BioChaperone insulin lispro/pramlintide (AZ’s amylin analogue Symlin) will enter phase 1 trials for type 1 diabetes by the end of 2017. The candidate is one of two rapid-acting insulin-containing combinations in Adocia’s pipeline, alongside insulin lispro/exenatide (AZ’s GLP-1 agonist Bydureon) for type 2 diabetes. Both were added in January 2017. This development milestone for the insulin lispro/pramlintide candidate is consistent with Adocia’s previous timeline that at least one of these combinations will enter phase 1 by the end of 2017. To our knowledge, these agents represent the only rapid-acting insulin/pramlintide and rapid-acting insulin/GLP-1 co-formulations currently in development, and the only rapid-acting insulin co-formulation products in general for that matter. Given that the non-insulin biologics in these combinations are noted for their postprandial glucose-lowering effect, we’re curious if these products could serve as “next-generation” prandial insulins in a sense, by providing greater postprandial control than is currently offered by standalone rapid-acting insulins. We’re especially intrigued about the potential for lower hypoglycemia risk – presumably, combination with gut peptides allows for a smaller dose of insulin lispro, which could reduce uncertainty and variability around meals.

  • Moreover, Adocia shared in its 2Q17 update that its BioChaperone insulin glargine/liraglutide (Novo Nordisk’s Victoza) co-formulation is also expected to enter phase 1 by the end of 2017. We haven’t heard any more updates on this since, but we remain keenly interested to see how Adocia’s candidate will fare in the competitive landscape for basal insulin/GLP-1 combinations. Adocia is also developing a co-formulation of BioChaperone insulin glargine with dulaglutide (Lilly’s Trulicity) – still preclinical – and the competitive landscape includes another phase 1 candidate from Lilly, as well as preclinical candidates from PhaseBio and AntriaBio. Novo Nordisk’s Xultophy (insulin degludec/liraglutide) and Sanofi’s Soliqua (insulin glargine/lixisenatide) are fixed-ratio basal insulin/GLP-1 combos already on the market. Uptake of these advanced agents has been sluggish so far – Soliqua was launched in the US in January 2017, while Xultophy became available in May – and management from both companies has emphasized the challenge in changing treatment paradigms, to get HCPs familiar and comfortable with the novel concept of fixed-ratio combinations. Indeed, diabetes practice has been in treat-to-fail mode for quite a while, with therapies prescribed sequentially to see what might work, and changing these habits will take persistence. Improving access for Soliqua and Xultophy will also be key. Presumably (we hope), this drug class will gain more traction in the coming months, so that by the time Adocia’s and other candidates reach late-stage development, there is a thriving market for these highly-effective therapies. 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 big win for patients.

4. No Word on Phase 3-Ready HinsBet (Rapid-Acting Human Insulin); Adocia Plans to License to “Regional Player” in Emerging Markets

Management provided no updates on its phase 3-ready rapid-acting human insulin HinsBet. We view the lack of commentary on HinsBet as a reflection of Adocia’s laser-focus on securing a development partner for its other phase 3-ready candidate, BioChaperone Lispro. In previous earnings updates management has expressed its intention to license HinsBet to a “regional player” in emerging markets to support its continued development and hopeful launch, and we assume these discussions remain ongoing. Adocia reported positive phase 2a results for HinsBet in October 2016. The study (n=36) was a randomized, double-blind, three-treatment, three-period cross-over trial comparing HinsBet (BioChaperone human insulin) vs. Lilly’s Humulin (human insulin) 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).

5. Adocia Has Strong Cash Position with ~$52 Million

Adocia had cash and cash equivalents totaling €44 million (~$52 million) as of September 30, 2017, down from €52 million (~$61 million) in 2Q17 and €58 million (~$64 million) in 3Q16. Management attributed this diminished cash position to the continued progress of many clinical development programs – all of which are now entirely financed by Adocia, contrary to last year before the termination of the partnership with Lilly. The company maintained optimism that its cash position is solid overall, enabling Adocia to continue financing its diabetes-focused portfolio – one we will continue to watch closely.

6. Adocia Welcomes Dr. Stanislav Glezer as CMO; Formerly at Novo Nordisk, Sanofi

In 3Q17, the company appointed Dr. Stanislav Glezer to the position of Chief Medical Officer (CMO). Adocia’s 3Q17 update expressed optimism that Dr. Glezer’s depth of experience in diabetes clinical development will be a strong asset, and we certainly agree. Prior to joining Adocia, Dr. Glezer served as VP of Medical Affairs at Novo Nordisk. Before that, he held various positions at Sanofi, including Global Leader for Toujeo (next-gen insulin glargine U300), VP of Evidence Value and Access, and VP of Medical Affairs.

 

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