ABLYNX: ALX-81 as expected not better than Reopro in ACS

Ablynx announced that the phase II study of ALX-0081 as an anti-thrombotic in high risk patients with acute coronary syndrome (ACS) did not achieve the primary endpoint. Consequently, the development of ALX-0081 in ACS is ceased. We lower our TP to € 6.5/sh (from € 7) but maintain our rating.

Our View:
ALX-0081 was being developed as an antithrombotic, to be used in high risk patients with ACS undergoing an angioplasty to open the arteries of the heart. The product is acting by blocking the von Willebrand factor (vWF), which is a novel mode of action with no products acting on this target on the market (making it extra challenging). In the prevention of blood clotting, there is very thin line in causing unwanted bleeding. Therefore, the primary endpoint of the study (recruiting 380 patients) was a 40% reduction in bleeding events versus the current standard of care Reopro. This endpoint was not met as both ALX-0081 and Reopro showed a comparable, not statistically different bleeding profile: 36 (20%) of ALX-0081 treated patients versus 28 (15%) of Reopro treated patients reported bleeding events. 3 ALX-0081 and 2 Reopro patients reported a major bleeding event.
Not meeting the primary endpoint doesn’t come as a surprise at all and we have warned investors often during the last 18 months for the likelihood of this outcome. Indeed, the bar was set very high given the current efficacy of Reopro, which the company did not deny during recent R&D updates. We understand that at the time of the trial design, it was expected that Reopro would reach a bleeding rate of 41% (based on the phase III data used for the FDA approval in 1994). With the ALX-0081 data obtained now (20% reduction), the product would (with a 50% improvement vs original Reopro rates) have met the primary endpoint. However, Reopro is used as an add-on therapy to a standard anti-thrombotic cocktail (plavix, heparine, aspirine). Over the years, medical practise has improved, both in the fine-tuning of the cocktail and on the procedure to open the heart arteries, such that nowadays the bleeding rate of Reopro is much lower, especially in a controlled environment of a clinical study (15% in this study).
Importantly, ALX-0081 had an acceptable safety profile and performed as well as Reopro, proving that Nanobodies interfere with system biology in a safe way. However, thrombolytics are a competitive environment, and being as good as the current standard is not good enough. Understandably, and in-line with previous guidance, the development of ALX-0081 is ceased, but the safety data is said to be of interest for the development of the product as a treatment for TPP, also in phase II. Moreover, from a commercial view it would be difficult to market the drug for ACS with a price tag of € 500-1000/patient/year, versus several 10thousands as a TTP drug. Finally, recall that interfering with the vWF to prevent blood clotting is a novel mode of action, and the question remainsif modulating vWF is an efficient pathway to resolve the issues in these patients.

Conclusion:
We see confirmation of our previous views and eliminating ALX-0081 for ACS only removes € 0.5/sh from our SoTP valuation. While do not exclude further pressure on the stock for now, investors will start to realize that all negative news (Pfizer/ALX-0081) is now in the market, and the coming clinical milestones (in 2012) have a higher probability of being successful.