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ProQR Therapeutics N.V.
PRQR: Price: $7.95; Market Cap (M): $254
Rating: Buy; Price Target: $20.00
Andrew S. Fein
Alicia Yin, Ph.D.
Li Wang Watsek
Wir Lieben QR-110 Data in Leber's; Reit Buy and $20 PT
Our thoughts around the positive QR-110 Phase 1/2 interim data. We believe that the positive interim data from QR-110 Phase 1/2 trial in Leber congenital amaurosis 10 (LCA10) patients is highly informative from the following aspects: (1) the data demonstrated not only favorable safety but also rapid and sustained efficacy of QR-110 in treating LCA10 patients. Based on our conversations with KOLs, this data has exceeded the KOL expectations (i.e. safety profile without much efficacy signal), and should lower both the clinical and regulatory risk moving forward, in our view (discussed below); (2) provided first in human proof of concept data of antisense RNA intravitreal injection as a treatment modality for LCA10 patients, which may be superior to other approaches currently being tested, including CRISPR-mediated gene editing and AAV-based delivery methods (discussed below); and (3) given the much shorter than expected time to observe clinical benefits (patients have only been treated for 3~6 months), and the planned initiation of a Phase 2/3 study in 1H19 prior to the completion of the ongoing Phase 1/2 trial in 3Q19, we expect the timeline for the development of QR-110 may be significantly shortened.
Early and sustained efficacy signals exceed our expectations. According to several KOLs, 6-month is a very short time frame for demonstrating functional changes in inherited retinal diseases (usually measured in terms of years). Thus, our initial expectation going into the data readout was focused on the safety profile with the assumption that any efficacy signal would be small and simply a bonus at this early time point. We believe that the efficacy signals across multiple measurements in the interim data, albeit in relatively few patients, suggest a real clinical benefit, especially given how severe these patients are, and could serve to lower the clinical risk in a pivotal trial: (1) the rapid onset of efficacy for QR-110, in our view, is consistent with QR-110’s mechanism of action (MOA) that allows for restoration of functional CEP290 protein levels in a short-term; (2) consistent improvement observed in four different outcome measures including functional, physiological and structural measurements, gives us confidence that the signal is real and likely to be reproducible; and (3) improvement in the median value, as well as the mean value of endpoints, suggest that the benefit observed is not driven by a single hyper-responder. Moreover, we believe these data compare favorably to Luxturna’s (Spark Therapeutics; ONCE; not rated) clinical outcomes, especially considering LCA 10 is often a more severe disease than LCA 2: (1) the mobility test developed by Spark is viewed favorably by the FDA, as it is a functional measurement and directly relates to patients’ quality of life (QoL). Although there is no single mobility test favored by the FDA, the feedback from the agency according to both KOLs and management is that a series of mobility tests with a broader dynamic range to better accommodate the range of disease severity in patients would be valuable. To that end, ProQR designed and developed multiple tests with a large dynamic range with scores from 0-20, that vary in difficulty of mobility, degree of obstacles, light sensitivity, and visual light contrast. Per management, >2 levels of improvement should be considered clinically meaningful, and QR-110 achieved a mean of 2.6 levels of improvement (57% patients improved >2 levels) which was maintained for more than 6 months; (2) most of the patients with LCA10 have very low vision at baseline and it is often difficult to show improvement on visual acuity. With LCA2, Luxturna failed to show significant improvement in best correlated visual acuity (BCVA) (-0.16 LogMAR, p=0.17). In comparison, QR-110 showed significant and clinically meaningful improvement (>=-0.3 LogMAR) in BCVA (-0.67 LogMAR, p=0.01; 62.5% patients improved >0.3 LogMAR), which lasted for at least 6 months. Recall that an improvement of -0.3 roughly translates to an improvement in 3 lines on an eye chart, thus the improvement of -0.67 is at least an improvement of 6 lines. We view this outcome as especially significant, since: (1) no change was expected this early in treatment; and (2) most of these patients barely have the ability to sense light penetrance yet alone to be able to read letters on a chart. If the results hold in a larger trial, we believe it would be highly compelling in the eyes of the FDA and could result in rapid uptake by the provider community.; (3) improvement in FST and OCI were comparable to those reported in Luxturna’s Phase 1 trial; (4) EZ line restoration detected by OCT is consistent with the proposed MOA that CEP290 restoration helps re-grow the outer segment of photoreceptors. We do note, however, that this improvement in OCT was only observed in 1 patient, although this is a significant outcome (regrowth of outer segments, does not occur spontaneously) it is important to state that the other patients tested did not have sufficient resolution to accurately distinguish the EZ line; and (5) no SAEs or patient discontinuations have been reported, and the independent Data and Safety Monitoring Committee (DSMC) agreed that there were no safety concerns. Moreover, we point out that the approval of Luxturna demonstrated that due to the grave unmet need, a modest improvement may be sufficient to score an FDA nod.