Mereo BioPharma And Leflutrozole In Hypogonadotropic Hypogonadism – Seeking Alpha

Introduction

Mereo BioPharma (MREO) is a British small-cap ($62M) biopharma developing therapeutics for rare disorders as well as endocrine and oncological diseases. MREO has a diverse pipeline including MPH-966 (alvelestat), BCT-197 (acumapimod), and OMP-305B83 (navicixizumab) for alpha-1 antitrypsin deficiency, chronic obstructive pulmonary disease, and ovarian cancer, respectively. The focus of this article is BGS-649 (leflutrozole), a drug asset licensed from Novartis (NVS) that is in clinical development for treating hypogonadotropic hypogonadism (Hypo-H).

Hypogonadism is a medical condition characterized by a deficiency in testosterone, the primary male circulating sex hormone synthesized in the gonads. Hypogonadism can present itself during fetal development, before puberty or during adulthood. Testosterone is important in the development and maturation of reproductive tissues. Symptomatic events of this disorder are decreased libido, impaired erectile function, muscle weakness, increased adiposity, depressed mood, and decreased vitality.

Hypogonadism can be triggered by a primary testicular disorder (hypergonadotropic; Hyper-H) whereas hypogonadotropic hypogonadism (Hypo-H) is a consequence of congenital or acquired diseases that affect the hypothalamus and/or the pituitary gland.

The hypothalamus (i.e. brain), pituitary (i.e. endocrine), and gonadal (i.e. reproductive) glands are all often known as hypothalamic-pituitary-gonadal axis because they all act in concert in the development and regulation of the reproductive and immune systems. Any alteration in this axis induces changes in the hormones produced by each gland that can affect their various local and systemic effects on the body. Hypo-H is frequently reported in metabolic disorders such as obesity, type 2 diabetes, and metabolic syndrome.

Men who present with Hyper-H do not respond to hormone replacement medication because the disorder is caused by primary testicular failure. Testosterone hormone replacement is the mainstay treatment for Hypo-H to normalize testosterone levels and restore fertility. Alternative options include gonadotropin therapy regimen to induce endogenous testosterone, aromatase inhibitors, and selective estrogen receptor modulators.

BGS-649 (leflutrozole) is a novel once-weekly oral aromatase inhibitor in clinical development as first-line therapy for the treatment of Hypo-H in obese men. The thesis is that BGS-649 normalizes testosterone levels by inhibiting aromatase and is, therefore, expected to improve the related conditions. The premise is that lower levels of testosterone in obese men with Hypo-H is driven by high levels of the aromatase enzyme in fat tissue which irreversibly converts testosterone into estradiol. Aromatase inhibitors are widely used therapeutically in breast cancer.

Clinical Data: A Phase 2b clinical trial of BGS-649 in 271 patients with Hypo-H achieved its primary clinical endpoint of total testosterone normalization:

in over 75% of subjects after 24 weeks of treatment, and in at least 90% of patients after 24 weeks at the two highest doses. All three doses met all secondary endpoints, including the improvement of testosterone luteinizing hormone (LH.) and follicle stimulating hormone (FSH.) levels. The exploratory endpoint of improvement in total motile sperm count was also met.

A safety extension study completed in 143 patients successfully demonstrated that none of the doses of BGS-649 met the lower bound (95% confidence interval) of the pre-specified safety criterion of a greater than 3% reduction in lumbar spine bone mineral density (BMD) after 48 weeks of treatment. The extension study also demonstrated normalization of testosterone in more than 90% of the patients at all three doses and maintenance of the effects on LH and FSH.

Individuals with Hypo-H lack or have low levels of gonadotropin-releasing hormone (GnRH.). GnRH is a peptide hormone secreted from the hypothalamus and stimulates gonadotropic cells in the anterior pituitary gland to release LH and FSH for normal gonad function including testosterone production by the testes. The observation that BGS-649 therapy was associated with normal FSH and LH levels in the Phase 2b study could suggest these patients also had GnRH levels normalized or elevated.

The prevalence of Hypo-H was estimated to be 1:10,000 to 1:86,000 individuals 20 years ago - meaning the prevalence could be higher due to increasing rates of obesity.

Upcoming catalytic events are:

Setrusumab for Osteogenesis Imperfecta (OI.)

12-month data from Phase 2b ASTEROID study in adult OI patients expected in Q4 2019. In May 2019, Mereo reported positive 6-month interim data from the fully-enrolled ASTEROID study. These data were accepted for a late-breaking oral presentation at the upcoming American Society for Bone and Mineral Research (ASBMR) 2019 Annual Meeting to be held from September 20-23 in Orlando, FL, USA. The Company expects to report 12-month topline data from the blinded portion of the study in Q4 2019. There are currently no FDA or EMA-approved treatments for OI.

Pivotal pediatric study ready in the EU and Canada. In addition to evaluating setrusumab in adult OI patients, Mereo's Paediatric Investigation Plan (PIP) has been approved by the EMA and a study design has been agreed for a pivotal registration trial in children. Mereo is also exploring an extension of the planned pivotal study into the U.S.

Alvelestat for Severe Alpha-1 Antitrypsin Deficiency (AATD.)

Enrollment continuing for the Phase 2 proof-of-concept study in severe AATD patients with topline data expected in mid-2020. If the results are positive, Mereo intends to commence a pivotal trial in the EU and the U.S. in AATD as soon as possible thereafter.

Investigator-sponsored clinical studies underway in AATD and also in bronchiolitis obliterans syndrome (BOS) as a result of graft-versus-host disease (GvHD) in patients undergoing hematopoietic stem cell transplantation (HSCT). BOS is an orphan disease characterized by inflammatory obstruction of the lung's tiniest airways and is the primary cause of death in patients who receive lung transplants. Based on the preliminary clinical data to-date, Mereo intends to investigate the use of alvelestat to treat patients with BOS following a lung transplant.

Partnering Discussions Continue for Broad Portfolio of Clinical-Stage Programs

Leflutrozole for Hypogonadotropic Hypogonadism .. Following the positive Phase 2b and six-month extension data reported in 2018, earlier this year Mereo held an advisory board to consider the future development strategy for leflutrozole, with a focus on the positive effects on semen parameters. Mereo has decided that future product development will focus on male fertility.

Acumapimod for Acute Exacerbations of Chronic Obstructive Pulmonary Disease (AECOPD) is Phase 3-ready following a successful Type B End of Phase 2 meeting with the FDA and agreed outline for a pivotal Phase 3 clinical trial program. Recently, a positive Scientific Advice Working Party (SAWP.) also took place with the EMA.

Navicixizumab for Advanced Platinum-Resistant Ovarian Cancer. In July 2019, Mereo held a successful Type B End of Phase 1 meeting with the FDA regarding a potential pathway for accelerated approval for navicixizumab for the treatment of patients with advanced ovarian cancer. Mereo and the FDA discussed, and agreed in principle, an outline for the design of a Phase 2 clinical trial that could potentially support the accelerated approval of navicixizumab in patients with ovarian cancer (including peritoneal or fallopian tube cancer) who have become resistant to prior therapies.

Etigilimab for Advanced Solid Tumors. Etigilimab has completed a Phase 1a/b trial of etigilimab, administered as either a single-agent or in combination with nivolumab, in patients with advanced or metastatic solid tumors.

The biggest risk is the low cash reserve. As highlighted above, MREO is seeking partnership agreements for some of its clinical programs. Partnership agreements would provide the financial stability needed to advance its clinical pipeline.

At the end of Q2/2019, it reported cash, cash equivalents, and short-term investments of $45.06M (after conversion from pounds sterling). Institutional ownership currently stands at 1.88%, with 43 institutional holders accounting for 1,805,180 total shares. Analysts recommend a buy with an average price target of $7.20.

CEO Dr. Denise Scots-Knight on the future:

Our team remains focused on advancing discussions with potential partners to help us further realize the value of these assets and we look forward to updating you regarding these discussions in the future. In addition to the progress have highlighted regarding our development programs, we also continue the build out of our senior Management Team and board of directors to ensure that we have the necessary expertise and are well positioned as our programs continue to advance.

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Mereo BioPharma And Leflutrozole In Hypogonadotropic Hypogonadism - Seeking Alpha