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CHEMOCENTRIX (CCXI): A LEADER OF A NEW LINE OF INVESTIGATIONAL TREATMENTS

Prohost Biotech - Monday, October 08, 2012

In an effort to find additional small biotech firms with solid scientific fundamentals and products that promise reaching beyond the limiting horizon, we pinpointed ten to date. We picked them from among one hundred biotech firms that have little, or none of the properties that make out   super achievers. We decided to go on and start with a company called ChemoCentryx (CCXI). Our selection was not based on priority, preference, or any other reason that might insinuate advantages over the other nine firms we picked for comprehensive reviewing. It was rather based on curiosity triggered by a recent announcement by the firm of preclinical results of a small molecule oral drug CCX872 aimed at blocking the chemokine receptor CCR2 for the treatment of diabetes nephropathy.

The news attracted our attention because no products exist on the market for inflammatory and autoimmune diseases induce their healing actions through specifically blocking particular chemokine receptors. The approach has been suggested time and time again, and molecules have been developed, but no firm has had a broad pipeline full of molecules targeting chemokine receptors like ChemoCentrix.

Knowing about the complexity of the chemokine system, we were anxious to learn what this firm has done to overcome it, clearing its way into finding the right targets and designing the right therapeutic molecules that fit them. A successful outcome of ChemoCentrix’ novel approach would mean that this firm has a chance to reach beyond the sight-limiting horizon, which is what we expect first and foremost from the biotech industry. The question is: Will ChemoCentryx be the first to reach the market with a safe and effective chemokine receptor blocking drugs that outperform other marketed or investigational small molecule drugs treating the same diseases?

The Company

ChemoCentryxis a clinical-stage biopharmaceutical company focused on designing and developing orally administered therapeutics that target the chemokine and chemoattractant systems in order to treat autoimmune diseases, inflammatory disorders and cancer. The chemokine system is a biological network that regulates inflammation via a collection of secreted chemokine ligands and through specific cell surface receptors. Indeed, inflammation involves a complex series of cellular events that rely on the chemical messengers chemokines, or chemo-attractant cytokines, which send out signals to attract inflammatory cells, or leukocytes to the site of disease or injury. Chemokines bind to chemokine receptors found on the surface of leukocytes, and the specific combination of various chemokines and chemokine receptors serve to precisely coordinate inflammatory responses.

ChemoCentryx's sensed the opportunity presented by the chemokine system and took advantage of it through creating a proprietary drug discovery tools known as the EnabaLink® technology suite to unlock the system's complexity. The technology enabled the firm to predict specific chemokine receptors implicated in various given condition and to identify and optimize small molecule compounds that specifically target them, hence blocking the inflammatory responses driven by those particular receptors.  That’s how this firm succeeded in building one of the broadest pipelines of chemokine-based therapeutics in the biopharmaceutical industry.

The good news is that the products that target specific chemokine receptors do not suppress the immune system as known to happen with existing products for inflammatory diseases. In addition, the orally administered small molecules offer convenience and compliance advantages, as well as lower costs of production than existing and investigational therapies.

PIPELINE

ChemoCentryx has four drug candidates in clinical development and expects to advance at least two additional drug candidates into clinical trials in the 2012 – 2013. Three of these drug candidates are wholly owned and three are subject to collaboration agreement with Glaxo Group Limited, an affiliate of GlaxoSmithKline (GSK)

Drugs In Various Phase Clinical trials

Vercirnon (also known as Traficet-EN, (CCX282 or GSK1605786): This drug is ChemoCentryx’ most advanced drug candidate. It is a specific CCR9 inhibitor.

Vercimon has completed a multi-national clinical trial, PROTECT-1, in patients with moderate-to-severe Crohn's disease, where it demonstrated the ability to induce a clinical response and to maintain clinical remission, and is now in pivotal Phase 3 clinical development in collaboration with GSK.

CCX140: This drug targets CCR2 chemokine receptor. CCX140 is ChemoCentryx’ lead independent drug candidate. Phase 2 trial results demonstrated the drug is safe and well-tolerated. It showed clinical activity on glycemic indices in type 2 diabetics. CCX140 is now in Phase 2 clinical trial for diabetic nephropathy.

In an earlier Phase 2 clinical trial, CCX140 results demonstrated clinical efficacy. The drug has successfully met its primary endpoint of safety and tolerability in type 2 diabetics on stable doses of metformin, a statistically significant decrease in hemoglobin A1c (HbA1c) relative to placebo and a dose-dependent lowering of fasting plasma glucose were shown following only 28 days of treatment with CCX140. Additionally, ChemoCentryx's CCR2 inhibitors have shown to significantly improve kidney function and hyperglycemia in preclinical models of diabetic nephropathy in addition to those for type 2 diabetes.

CCX354 (also known as GSK2941266): A CCR1 inhibitor. It successfully completed a Phase 2 proof-of concept clinical trial for rheumatoid arthritis (RA).

RESULTS: Data from Phase 2 CARAT-2 study for CCX354: CCX354 was generally well tolerated. The response was 56% in patients receiving 200 mg CCX354 once daily, compared to 44% in patients receiving 100 mg twice daily and 30% in patients receiving placebo. ACR20 is a standard measure of improvement in tender and swollen joint counts. The difference between 200 mg once daily and placebo was statistically significant. Data also indicated that CCX354 treatment reduced markers of bone turnover, supporting the previously documented role of CCR1 in osteoclast maturation and migration.

This successful Phase 2 proof-of-concept clinical trial triggered GSK's option rights under the firms’ collaboration agreement. GSK exercised its option to further develop and commercialize CCX354 in November of 2011 and has an exclusive right to initiate a Phase 2b clinical trial for the in rheumatoid arthritis. GSK has already exercised its options to Traficet-EN and CCX354 and each of their two respective defined back-up compounds, and will have a similar option right to CCX168 if ChemoCentryx establishes clinical proof-of-concept. All the drug candidates, including those under ChemoCentryx collaboration agreement with GSK, have been internally discovered.

CCX168: A C5aR inhibitor, completed Phase I clinical evaluation and is currently in a Phase 2 proof-of-concept clinical trial for anti-neutrophil cytoplasmic antibody, or ANCA-associated vasculitis (AAV) and is subject to GSK's option.

Preclinical Investigation

ChemoCentryx is advancing several independent drug candidates through preclinical development, the most advanced of which target chemokine receptors involved in metabolic diseases, atopic dermatitis, ulcerative colitis, liver inflammation, psoriasis, and RA. Programs in preclinical development include:

CCX872: ChemoCentrix’ independent next generation CCR2 drug candidate for metabolic diseases.

Recent results demonstrated CCX872 improved multiple parameters of renal function in the in vivo model of diabetic nephropathy. The drug demonstrated a pronounced improvement in albuminuria and histological measures of kidney damage, such as glomerular basement membrane thickening. The data were reported in an oral presentation titled, "CCR2 Inhibition Improves Renal Function in Diabetic BTBR ob/ob Mice," at the 48th Annual Meeting of the European Association for the Study of Diabetes (EASD) taking place in Berlin.

CCX872 is expected to move into clinical trials in 2012. ChemoCentryx affirmed it is on track to meet this milestone.

CCX507: ChemoCentrix’ independent drug candidate for inflammatory bowel disease (IBD) resulted from the firm’s de novo CCR9 program.    

CCX662: ChemoCentryx’ independent drug candidate targeting CXCR7 - a chemokine receptor the firm believes is associated with tumor growth. The drug is expected to enter a Phase I clinical trial for glioblastoma multiforme (GBM) in the first half of 2013.

Additional compounds are under evaluation targeting chemokine receptors for liver disease and skin inflammation.

Prohost Observations

All the above is good news about ChemoCentrix’ capability of unlocking the complexity of chemokines and positioning itself as a pioneer developer of drugs that accurately target chemokine receptors to block inflammatory diseases. Important, no doubt, is that ChemoCentryx’ small molecule chemokine inhibitors spare the immune system the suppression it endures with current treatments of inflammatory and autoimmune diseases. This difference gives a tremendous advantage to treatment that block chemokine receptors over the other approved and investigational drugs.  

The announced results of various trials are positive and encouraging to date. However, as the approach is new and untested in completed trials, further results of larger trials are required in order for us to turn the encouragement into excitement. Specialists will not be encouraged prescribing a drug, which is inferior to what they are currently prescribing just because it helps patients’ compliance, is cost effective and does not suppress the immune system. Better results than those of existing treatments, or at least equal results would represent excellent news. More catalysts are coming in early 2013  

Prohost is interested in the chemokine approach and believes it would present an additional safer and more specific approach for the treatment of inflammatory diseases, including autoimmune diseases that affect joints and internal organs, in addition to metabolic diseases and their complications. We will be following up on ChemoCentrix’ future announcements.

Currently we own no shares in this firm and do not intend to add any to our portfolio in the next 72 hours.  We will, later, consider buying a minimal number of shares to be increased as more positive data from trials are announced.

ChemoCentrix

Symbol CCXI

Stock Price  $11.35.  

Market Cap $410.54

52 WK range $9.19 -$17.73

Total Cash $131.58 million

Total Cash/share $3.64  

Total Dept $1.18 million

Operating Cash Flow (ttm): $ -9.39 million

Levered Free Cash Flow (ttm): $- 2.23 million

FORWARD-LOOKING: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are our 'opinions' and we may be wrong. We may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to our thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.

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