KalVista Pharmaceuticals (NASDAQ:KALV) has been able to reach a targeted goal, which would be a specific number of targeted attacks so that it could complete an ongoing phase 3 trial, known as KONFIDENT. The reason why this is a crucial inflection point for it is because it sets up the ability for it to be able to release results from this, which are expected in the early part of 2024. There are many companies that are developing either a prophylaxis or on-demand treatment for Hereditary Angioedema [HAE]. Where I believe that value could be unlocked is that this company has a focus to go after the on-demand treatment side of things, which is an opportunity that is expected to grow in the coming years. As opposed to patients receiving prophylactic treatment for their disease.
Not only that, but there is a second item to consider, which is that it will be an oral on-demand treatment. Most treatments now, prophylactic or on-demand, are given to patients via an injection. The ability to be able to give patients to have an oral option would be huge. It is still looking at developing a prophylaxis drug, but this could be differentiated in the HAE market as an oral option as well. This is going to be an oral Factor XIIa drug to be used as an oral prophylaxis for HAE. Lastly, there is a way where it is reducing investor risk a bit with respect to this particular drug. That is because the goal is to use this oral Factor XIIa drug beyond HAE, in that there is ongoing evaluation to see if it could be used to treat patients with other disorders, such as thrombosis and inflammation.
Sebetralstat For The Treatment Of Patients With Hereditary Angioedema
The main clinical program to go over in KalVista’s pipeline would be the use of its oral drug sebetralstat for the treatment of patients with Hereditary Angioedema [HAE]. The problem with HAE is that it causes patients to have recurrent swelling in several parts of the body. This phenomenon occurs due to a defect of C1 inhibitor activity. Thus, low levels of C1 esterase inhibitor levels leads to uncontrolled levels of plasm kallikrein or bradykinin release. There are prophylaxis treatments and on-demand treatments for HAE at the moment. In terms of the market leader in this space, it would be Takeda Pharmaceuticals (TAK) with TAKHZYRO, which owns a huge chunk of the market. This particular treatment is given as a prophylactic for these patients. The thing is that on-demand treatment options at the moment account for one-third of the HAE market, but there is room to grow over time. Especially, when you consider that there is an unmet medical need for an efficacious oral on-demand drug for HAE. Matter of fact, should KalVista be successful, then it could possibly have the first oral on-demand therapy for HAE. Should this happen, then it will be a transformational approach to treating these patients.
The use of sebetralstat for the treatment of patients with HAE types I and II, is being explored in the ongoing phase 3 KONFIDENT trial. This trial is expected to recruit up to a total of 136 adult and adolescent patients who are to be randomized to one of the following doses:
- 300 mg sebetralstat
- 600 mg sebetralstat
The primary endpoint of this late-stage trial is going to be “time to beginning of symptom relief Patient Global Impression of Change [PGI-C]. There has been a huge development with respect to this program, in that KalVista noted that the targeted number of attacks needed to conclude the study has been achieved. With this milestone being met, this means that it will gear up to be in a position to release results from the phase 3 KONFIDENT trial. A topline data readout from this trial is expected in early 2024. Should the primary endpoint of PGI-C be met, then it will be able to file a New Drug Application [NDA] of sebetralstat for HAE to the FDA in the 1st half of 2024. Whether or not the primary endpoint is actually achieved remains to be seen, but in my eyes it definitely had good interaction with the FDA. How so? That’s because it was able to get the secondary endpoint from the prior phase 2 study of PGI-C to become the phase 3 primary endpoint. The FDA has indicated that this primary endpoint will be sufficient enough on its own to warrant filing for FDA for regulatory approval. Thus, there is no need for Visual Analogue Score [VAS] needed to support approval for the primary endpoint. Why is it important that PGI-C is set as the primary endpoint for the phase 3 KONFIDENT trial? That’s because the biotech achieved this secondary endpoint with statistical significance in a prior phase 2 study. That is, patients that took sebetralstat saw a 1.6 hour time frame reduction of time to onset of symptom relief compared to 9 hours for placebo. Thus, treatment with sebetralstat achieved statistical significance compared to placebo with a p-value of p < 0.0001. If the biotech can achieve a similar outcome in the phase 3 KONFIDNT trial, to what was achieved in the prior phase 2 study with respect to this PGI-C endpoint, then it will be in good shape to move towards an NDA filing. Another competitive advantage it could have is if it ultimately is able to achieve its other intended goal. That would be the ability to develop this treatment as orally disintegrating tablet [ODT]. This would be huge, because it would target younger patients or those who have difficulty swallowing. Additional catalysts that investors should be aware of is the filing of a regulatory application of sebetralstat for HAE in Japan and European territories in 2024. Of course, all of these regulatory filings will only happen upon successful topline data being released from the phase 3 KONFIDENT study.
According to the 10-Q SEC Filing, KalVista Pharmaceuticals had cash, cash equivalents and marketable securities of $103.2 million as of October 31st of 2023. The reason for the cash on hand is because back in December of 2022 it entered into an agreement with institutional investors to sell, in a registered direct offering, an aggregate of 9.4 million of shares of its common stock at an offering price of $6 per share and pre-funded warrants for purchase of up to 182,470 shares of common stock a price of $5.999 per pre-funded warrant. The net proceeds from this offering, after deducting expensed, were approximately $57.7 million. The company is likely going to need to raise cash in the coming months. Why do I believe this to be the case? That’s because it believe that it has enough cash on hand to fund its operations for at least the next 12 months. Where it might raise cash, is if it obtains positive topline results from the phase 3 KONFIDENT study, which is using sebetralstat for the treatment of patients with HAE. It does have an option to raise cash if it chooses to use it. Back in May of 2021, it entered into a Sales Agreement with Cantor Fitzgerald & Co., by which from time to time it could offer and sell shares. During the six-months ending October 31st of 2023, it did not offer or sell any shares under this Sales Agreement.
Risks To Business
There are several risks that investors should be aware of before investing in KalVista Pharmaceuticals. The first risk to consider would be with respect to the ongoing phase 3 KONFIDENT trial, which is using sebetralstat for the on-demand treatment of patients with HAE. Even though the prior phase 2 study had the PGI-C endpoint met with statistical significance, there is no guarantee that the same thing will happen in the KONFIDENT trial. A second risk to then consider would be with respect to the possible NDA filing to the FDA of sebetrelstat for this patient population. Even upon filing an NDA, there is no assurance that the agency will accept the regulatory filing for consideration, nor that it will ultimately approve the drug for marketing. A third risk to consider would be the financial position that KalVista is in.
It believes that it only has enough cash to fund its operations for at least the next 12 months. This means there is a high likelihood that it is going to raise cash in the coming months, which could have an impact of diluting shareholders. The fourth and final risk to consider would be with respect to competitors in the HAE treatment market space. That’s because there are many prophylactic competitors in place, along with many who give the drug via infusion/injection. I believe that this biotech can counter such competition with a first oral on-demand treatment option for starters. It could further change how such patients are treated if it can successfully advance development of this drug as an oral disintegrating tablet [ODT], to further differentiate itself.
KalVista has reached the point in whereby it is gearing up to release results from its phase 3 KONFIDENT study. The value here for investors is that should it be successful in this late-stage study, then it could possibly receive regulatory approval for the first oral type on-demand therapy for HAE. Again, it could further advance itself with additional expansion opportunities, like developing an ODT for these patients. This would help to go after younger patients or those who have difficulty in being able to swallow. Not only that, but this biotech is already in the process of advancing another candidate in its pipeline, which is a Factor XIIa inhibitor. It is the only oral Factor XIIa inhibitor being advanced in the clinic. This means it could end up being a good prophylaxis treatment option for patients with HAE. Besides that, I believe that such a candidate might even reduce investor risk, should it be moved towards an IND filing. How so? That’s because not only can such a candidate be advanced for HAE, but it has variability in that it could also be advanced for the treatment of patients with thrombosis and inflammation as well.
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