AERIE PHARMACEUTICALS (AERI)
A YOUNG BUT STRONG COMPETITOR IN THE GLAUCOMA HUGE MARKET
– Aerie Pharmaceuticals has eye drops that could become a game changer in the management of glaucoma.
– The firm’s lead drug, Rhopressa™, is a one drop once-daily having triple action that might bring life to over two decades of paralysis in Glaucoma treatments.
– Rhopressa™ inhibits Rho Kinase (ROCK) and the norepinephrine transporter (NET). Both are novel biochemical targets for drugs that aim at lowering intraocular pressure (IOP).
– Aerie’s second product is Roclatan is a combination of Rhopressa™ and the prescribed drug latanoprost, which makes it have a quadruple mechanisms of actions.
– Both products have shown excellent results in clinical trials to date.
– The market for glaucoma drugs is huge and is growing larger to around $8 Billion.
Aerie Pharmaceuticals (AERI) is a development-stage pharmaceutical Company focused on eye diseases, mainly glaucoma. The firm’s lead product candidate, Rhopressa™, is a once-daily triple-action eye drops that demonstrated ability to lower intraocular pressure (IOP) in patients with open-angle glaucoma. Aerie second glaucoma product, Roclatan, is a single quadruple-action eye drops. It is a combination of Rhopressa plus the marketed eye drops latanoprost. Roclatan is to be administered once-daily.
A current two Phase 3 registration trials are being conducted in the U.S. to demonstrate non-inferiority of lowering IOP with Rhopressa compared to the conventional drug timolol.
Why the Enthusiasm?
The enthusiasm towards Aerie’s drugs emanates from several facts starting with a successful Phase 2b trials confirming Rhopressa’s obvious advantages over the conventional non-surgical treatments for glaucoma. These advantages comprise the following:
1. Patients’ compliance: The fact that the product is a once a day eye drops helps the patients comply, which is a strict necessity for a successful control of intraocular pressure (IOP).
2. Reduction of IOP via multiple mechanisms of actions: Inhibiting Rho Kinase (ROCK) and norepiephrine transporter (NET), Rhopressa reduces IOP through several separate mechanisms of actions. ROCK inhibition increases fluid outflow through the trabecular meshwork (TM), which accounts for 80% of fluid drainage from the eye. It also reduces episcleral venous pressure (EVP), which represents the pressure of the blood in the episcleral veins of the eye where eye fluid drains into the bloodstream. NET inhibition, on the other hand reduces the production of eye fluid. The multiple mechanisms of Rhopressa’s action lead to a strong intraocular pressure (IOP)-lowering effect.
3. Phase 2 trial results: Results from Phase 2b clinical trial, with Rhopressa demonstrated mean IOP reductions of 5.7 and 6.2 mmHg (millimeters of mercury) on days 28 and 14, respectively. Important to note that studies have shown that a sustained 5 mmHg reduction in IOP reduces by around 50% the risk of disease progression.
3. Favorable Tolerability Profile: Currently marketed glaucoma drugs have several adverse effects, including ocular allergic reaction, itching of the eye, iris color change, orbital tissue discoloration, unusual taste and hyperemia. Currently marketed non-PGA drugs have also systemic side effects, including among others, lethargy, reduced heart rate, Stevens Johnson syndrome and blood dyscrasias. The most widely prescribed non-PGA drug, timolol, has warnings that include bronchospasm, arrhythmia and heart failure.
In Phase 2a and 2b clinical trials where 209 patients were exposed to Rhopressa™. The main adverse effect for Aerie drugs was mild hyperemia, which is a cosmetic asymptomatic redness of the eye. Hyperemia is a common tolerability finding also associated with PGAs.
4. Rhopressa™ targets the trabecular meshwork, the diseased tissue responsible for elevated intra-ocular pressure in glaucoma and the eye’s primary drain, whereas commonly prescribed PGAs and non-PGAs target the secondary drain and the fluid production in the eye, respectively.
Based on the above, we believe the odds of successful outcome of phase 3 trials exceed those of possible failure, especially that Aerie’s drugs have demonstrated clear safety as compared to the conventional treatments. Regarding efficacy, the level of IOP reduction expected to be achieved by Rhopressa would be equal to or exceed that of all currently marketed non-PGA products, both results are sufficient tor the drug to be approved knowing in fact that the primary endpoint of the trials is non-inferiority. Safety of Aerie’s drugs offers a great advantage against the conventional treatments
For the 80% of glaucoma patients with low to moderately elevated IOPs, we expect the phase 3 results to superiority over the currently marketed PGA products in lowering the IOP.
Published studies have indicated that the currently marketed PGA and non-PGA products for Glaucoma do not lower IOP as effectively in patients with low to moderately elevated baseline IOPs relative to patients with higher baseline IOPs.
Phase 2b clinical trial with Rhopressa demonstrate a reduction in IOP across all baseline IOPs tested in the trial. The results of a preclinical in vivo study reported one year ago, suggest that this differentiated effect may be attributable to the ability of Rhopressa™ to lower EVP.
Quadruple-action Roclatan™, a single-drop fixed-dose combination of Rhopressa™ and latanoprost, lowers IOP through the same three MOAs as Rhopressa™ and, as a fourth MOA, through the ability of latanoprost to increase fluid outflow through the uveoscleral pathway, the eye’s secondary drain.
If approved, Roclatan™ would be the only glaucoma product that covers all currently known intraocular pressure-lowering mechanisms of actions. This also means that Roclatan has the potential to provide a greater IOP-lowering effect than any currently marketed glaucoma product.
Therefore, we believe Roclatan™ could compete in both the PGA and non-PGA markets, becoming the product of choice for patients requiring maximal IOP lowering.
1. Efficacy Superior to Latanoprost – Phase 2b clinical trial results with Roclatan™ demonstrate the drug has achieved its primary efficacy endpoint of statistically significant superiority over each of its components on day 29. The trial included 297 patients with non-medicated entry IOPs that ranged from 22 to 36 mmHg. Roclatan™ lowered mean diurnal IOP from 25.1 mmHg at baseline to 16.5 mmHg on day 29, a 34 percent decrease in IOP.
2. Roclatan’s mean diurnal IOP reduction was approximately 2 mmHg greater than with latanoprost.
In addition to Rhopressa™ and Roclatan™, the firm is working on a drug referred to as AR-13533, which is currently in preclinical trials as second-generation ROCK/NET inhibitor.
AR-13533 does not require enzymatic conversion in the eye to deliver maximal ROCK inhibitor activity, and therefore AR-13533 may provide additional IOP-lowering effect in patients beyond that obtained with Rhopress. No investigational new drug application (IND) has yet been submitted to the FDA for AR-13533.
We are optimistic about Aerie’s drugs for glaucoma and we believe that the firm has done a great job developing the two products Rhopressa™ and Roclatan, which if approved (we believe they will be approved) the firm’s equally important task, i.e., to market these drugs by itself in the U.S. will begin. Indeed that’s what the firm intends to do in the United States, while bringing other marketers for other countries, including Japan and the European Union.
Aerie is trading on the NASDAQ under the symbol AERI. The stock is trading around $28 with a positive momentum that boosted it starting October-November 2013, taking it up slowly, but surely, from around $11 around year-end 2013 to its current price.
Market Cap 666.76 million.
Total Cash $!70 million.
52-week range $13.66 – $32.50
We are expecting efficacy results for Rocket 2 clinical results in mid 2015 and of Rocket 1 in the middle of second-quarter 2015. Filing for approval is expected in 2016. This is a good scientific study, regarding a successful development of far-reaching treatments for glaucoma.
We are optimistic, yet, we will be more comfortable learning more about the firm’s plans for the drugs’ marketing in the U.S. by itself. We decided to buy the minimum amount of stock at the current price prior to the clinical trial results. We will accumulate on weaknesses going forward towards the results, then the filing for approval and then the approval.
Aerie, we believe, is a candidate for acquisition by one of the big firms specialized in eye diseases, especially glaucoma.
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