Abliva — KL1333 ready for pivotal Phase II/III trial

Abliva’s new CEO Ellen Donnelly joined the company in early February and has already contributed by successfully supervising the private placement in March 2021. Dr Donnelly, a US national, has a PhD in pharmacology from Yale University. Her commercial knowledge comes from working in management consulting and drug development experience from almost a decade at Pfizer. More recently, Dr Donnelly gained C level experience as CEO of Modus Therapeutics (Stockholm, 2017–20) and CEO of the Division of Epigenetics at Juvenescence (US). We note that drug development experience at large pharma makes Dr Donnelly especially well-positioned to understand exactly what a potential partner would find interesting in Abliva’s portfolio.

With the new CEO in place, Abliva now has a sharp focus on the two lead assets KL1333 and NV354. We note that Abliva also has several other compounds, but has made a decision to only invest in the two lead drug candidates. The company is working to secure licensing deals for its non-core assets. NeuroSTAT in particular is interesting, in our view, as it is ready for a Phase II trial and Abliva is in discussions with the US government-backed brain trauma physician network, which could lead the next trial as soon as the US Department of Defense approves the funding (details below).

The Phase Ia/b was a randomised, double-blind, parallel-group, placebo-controlled study. The main endpoints were safety, tolerability (primary), pharmacokinetics and pharmacodynamics (PK/PD, secondary). The exploratory endpoints included the analysis of blood biomarkers in healthy volunteers and PMD patients as well as outcome assessments in patients. The study was conducted in four parts:

Parts A and B showed that KL1333 was generally safe and well tolerated. GI symptoms were observed in some cases, which improved when the daily dose was split (investigated in Part D).

The most interesting dataset came from Part C, which recruited eight PMD patients with mutations in the mitochondrial DNA. It was the first-time that patients received KL1333. Six patients received KL1333 and two received placebo. No new safety or tolerability issues were reported. The endpoints to assess the initial clinical efficacy included two different patient-reported fatigue questionnaires and a functional endpoint, 30-second sit-to-stand. The duration of dosing was 10 days. With the caveat that it was not designed to fully evaluate the efficacy and the dosing length was just 10 days, however, numerically the PMD patients showed greater improvement for all three endpoints compared to placebo patients (Exhibit 2, charts A, B and C). In addition, patients with the highest exposure of KL1333 had the best effects (chart D).

One of the key questions for Abliva is which is the correct endpoint to evaluate KL1333’s efficacy in the upcoming Phase II/III trial. Fatigue is a hallmark symptom of all PMD where muscles are affected and it will be the primary endpoint in the Phase II/III study. For this reason, the company is running complementary studies (as detailed below). We believe the new insights from the patients will be very valuable in this regard.

At the core of the late-stage KL1333 development is the strategic choice to target two specific mitochondrial conditions: MIDD-MELAS (encephalomyopathy, lactic acidosis and stroke-like episodes) and KSS-CPEO (progressive paralysis of certain eye muscles, pigmentary retinopathy and cardiomyopathy and/or arrhythmia) spectrum disorders. This will allow the investigators to evaluate the primary endpoint in a more homogenous patient population, which should improve the statistical analysis. However, we note that KL1333 theoretically could be beneficial in other PMD conditions as well; PMD is a group of diverse conditions and all are rare or ultrarare. So, if the efficacy is proven in MIDD-MELAS and KSS-CPEO, label expansion with bridging trials in other conditions is possible.

Enrolment criteria include:

In total, 120–180 patients are expected to be enrolled, who will receive peroral treatment with KL1333 for a period of 12 months. The study timeline plan envisages:

To evaluate the efficacy of KL1333, Abliva plans to use improvement in fatigue as the key primary efficacy endpoint. Since PMDs by definition are very rare conditions with no effective treatment, that means that there are no standard measures to evaluate the efficacy of any potential new drugs. Of the many different symptoms PMD patients experience, Abliva identified fatigue as the most common and one that could be reliably quantifiable. The FDA also agreed that this symptom can be used for the primary endpoint. Currently Abliva is conducting a qualitative study focused on validating a patient reported outcome for fatigue that is sensitive to the PMD patient condition. We note that Abliva has a long history of working with PMD patient associations (eg Mitochondria Day 2020 event), which, in our view, is key to understanding the day-to-day challenges PMD patients face. This, we believe, will ensure the informed selection of an appropriate endpoint for the Phase II/III trial.

The next step is the submission and approval of an IND that will enable Abliva to recruit patients in the US. Abliva has already received feedback from the European Medicines Agency (EMA) and from the UK’s Medicines and Healthcare products Regulatory Agency (MHRA), which will be used to inform the design of the trial.

The Phase II/III development plan for KL1333 that was agreed with the FDA also includes several additional studies that are collecting complementary data that will provide inputs into the design. According to the latest update, these studies are either ongoing or being finalised. These include:

Mitochondria are cellular organelles found in large numbers in most cells and is responsible for the majority of energy production needed for cell survival. Strikingly, mitochondria have their own DNA, which codes genes essential for their function. One of the leading evolutionary theories is that mitochondria originated from bacteria, which were engulfed and assimilated by early eukaryotic organisms, which gave birth to advanced life. Normal cell metabolism is powered by the consumption of adenosine triphosphate (ATP), which is the main energy source. Once consumed, ATP is resynthesized from adenosine diphosphate (ADP), which is also called cellular respiration.

Impaired mitochondrial function results in impaired cellular respiration. Cellular respiration consists of complex metabolic pathways that can be classified into three main groups:

Mitochondrial diseases are a group of conditions with the hallmark symptom of impaired energy production. Varying, often non-specific symptoms and the fact that the syndromes are rare make the diagnosis challenging. Mitochondrial disease is a relatively recent concept first introduced in 1962, when a group of Swedish researchers described a patient case with severe hyper-metabolism and a defect in mitochondrial function.1 Overall, approximately 12.5 in 100,000 people suffer from mitochondrial diseases, which makes this a group of rare conditions.

The diseases may appear at any age and consist of a number of syndromes with clinical presentation varying widely. For example, Chi (2017) lists 78 separate mitochondrial disease entities (Exhibit 4, left-hand column).1 Children have more acute onset, while adults have more slowly progressing presentations. Cells with high energy requirements, such as neurons, skeletal and cardiac muscles, are most susceptible to impaired energy metabolism; therefore, encephalopathy and myopathy are the most common features of the clinical picture, although other organs may also be affected (Exhibit 4, right-hand column). When it comes to treatment options, mainly supportive strategies are available and only to alleviate the symptoms.2

KL1333 was originally developed by KT&G Life Sciences, which was acquired by Yungjin in January 2017. Abliva in-licensed KL1333, from Yungjin Pharm (a diversified South Korean pharmaceutical company) as a Phase I-ready drug candidate In May 2017. The deal term included a total of $12m in development milestone payments, $42m for marketing authorisation and reimbursement approval plus sales-related milestone payments later and tiered single to low double-digit royalties on net sales. Yungjin retained rights to South Korea and Japan.

KL1333 is a novel, orally available, small organic molecule that interacts with NAD(P)H:quinone oxidoreductase 1 (NQO1). NQO1 is a cytosolic enzyme that oxidises NADH into NAD+, which is a coenzyme necessary for many cellular metabolism processes including mitochondrial function and production of ATP in the electron transport chain. KL1333 acts as a substrate to NQO1 and increases the NAD+/NADH ratio, which could improve mitochondrial function in various mitochondrial diseases.

Data accumulated from various preclinical and clinical studies (Abliva, Yungjin and other third parties) show that KL1333 has a positive effect on energy metabolism. The highlights include:

Mitochondrial complex I deficiency is the most prevalent defect in the respiratory chain in paediatric mitochondrial diseases (around 50%) and clinically presents as a group of syndromes that can be caused by changes in either nuclear or mitochondrial genome.3 It is often a serious or even fatal syndrome. Abliva is focusing on Leigh syndrome, which is a fatal primary mitochondrial disease and children with this condition usually die before age five. Symptoms usually debut at one to two years of age. Symptoms include developmental delay, psychomotor regression and hypotonia. There are currently no approved medicines. With bridging studies NV354’s label could later be potentially expanded to include MELAS in children and adolescents with neurological symptoms, and for the treatment of LHON, a disease affecting the optic nerve that can lead to blindness in both eyes.

Complex I is the entry point to the electron transport chain for energy carriers (NADH, Exhibit 3). In case of a complex I defect, the whole cellular respiratory process becomes disrupted. However, complex II also derives electrons from a substrate succinate (Exhibit 3). Abliva hypothesises that supplementation of succinate could replenish the electron transport chain with electrons, bypassing the complex I defect.

Succinate cannot easily pass through the cell’s membrane and therefore biological availability is limited if supplemented externally. Abliva’s NV354 is a programme that explores succinate prodrug that can pass through a cell’s membrane and subsequently is metabolised to succinate, which in turn can be used by complex II.

In the discovery programme, Abliva designed a series of succinate prodrugs (a prodrug turns into a drug once metabolised) and evaluated their ability to pass through the cell membrane and aid mitochondrial respiration with defective complex I. The accumulated data was published in Nature Communications, one of the top science journals worldwide, in August 2016 (JK Ehinger et al). In preclinical in vitro proof-of-concept studies, the researchers evaluated the compounds using healthy human fibroblasts (the most common connective tissue cell) and in fibroblasts from patients with Leigh syndrome. Exhibit 7 shows the oxygen consumption rate (OCR) in healthy fibroblasts and Leigh syndrome fibroblasts and the dynamics under various conditions. Highlights included:

Currently NV354 is in late preclinical studies and Abliva has in parallel started preparations for the clinical program. The remaining preclinical work (pharmacology and safety studies and regulatory documentation) is expected to be completed this year.

NeuroSTAT, an innovative formulation of ciclosporin, is the most advanced asset in the portfolio for out-licensing and partnering, and is positioned for the treatment of traumatic brain injury, where there is no neuroprotective treatment available yet. NeuroSTAT has accumulated some initial human efficacy data and has received IND approval from the FDA as well as Fast track designation. Abliva indicated that, while the drug candidate is promising, traumatic brain injury is not a focus area for Abliva anymore. The goal now is to look for partners to carry out a Phase II study.

One possibility is a collaboration with the Transforming Research and Clinical Knowledge in Traumatic Brain Injury (TRACK-TBI) network for a Phase II with NeuroSTAT under the Precision Medicine project, which would be funded by the US Department of Defense (DOD). TRACK-TBI Precision Medicine is a DOD-funded project run by the leading traumatic brain injury clinical trial network, TRACK-TBI, in the US. Abliva has had preliminary discussions with TRACK-TBI. If the Phase II trial is approved by the US DOD, it could start in 2022.

NeuroSTAT is meant to be administered during the acute phase of the brain injury (the first several weeks), when brain oedema and secondary injury are still developing and can further worsen the outcomes. Brain oedema is a particularly challenging condition, as the brain is encased in a close compartment (skull). Any more significant swelling of brain tissue can completely cut off the blood supply and lead to death. The only reliable intervention is urgent surgery (decompression, a procedure where a bone flap is removed to make space for brain tissue expansion). An effective non-invasive treatment to manage secondary injury during this acute phase is one of the highest unmet needs in neurotrauma and the likely cause of interest in this drug from the US DOD.

Following the recent R&D progress and corporate updates, we have taken a fresh look at the investment case. Our valuation is SEK1.21bn or SEK3.01 per share underpinned by the two lead assets KL1333 and NV354. We do not value NeuroSTAT (a Phase IIb-ready asset), although there is a likelihood that Abliva will decide to carry on the project if the ongoing discussions regarding the Phase II trial are successful and the data are positive. We will review this asset when Abliva releases more information.

With regards to partnering strategy for KL1333 and NV354, Abliva’s management has indicated that both options are on the table. The company could bring the assets all the way to the market itself or sign a deal if the right partner comes on board. In our model we assume that Abliva will commercialise both products itself. The assumptions for our rNPV model are summarised in Exhibit 10. Key inputs include:

In FY20 Abliva’s operating loss of SEK60.1m was lower year-on-year (SEK77.1m in 2019) due lower R&D spending (‘other external expenses’ of SEK46.4m in 2020 vs SEK63.5m in 2019) partly due to disruptions caused by the COVID-19 pandemic, and partly because of refocusing R&D activities on the two leading assets. Personnel costs decreased somewhat as well (to SEK13.3m from SEK14.9m). Abliva’s Q121 operating loss was SEK21.5m and we forecast an FY21 operating loss of SEK75.3m.

At end-Q121, cash was SEK48.0m, although in Q121 Abliva has raised SEK80m gross (to be booked in Q221), which should now be sufficient well into 2022, according to our model. The funding gap next year is SEK33m, according to our model. Abliva carried out the directed issue in March 2021 with 106,666,666 shares sold to several Swedish and international qualified investors, including Hadean Ventures, virtually at the market price of SEK0.75 per share (vs the previous close of SEK0.76 per share) raising in total SEK80m (69% of this issue was contingent and successfully authorised at an EGM on 29 April 2021).