Despite Positive Phase II Data, Connect Derm Drug Faces Tough Market

On Thursday, November 18, Connect Biopharmaceuticals, based in Taicang, Suzhou, China and San Diego, reported positive topline data from its Phase II trial of CBP-201 for adults with moderate-to-severe atopic dermatitis (AD). Despite the seemingly good news, company shares plummeted 55% to $5.46.

Most likely, investors weren’t as impressed with the data in part because the company’s drug would have to compete in the marketplace with Sanofi and Regeneron’s Dupixent (dupilumab), which generated $1.47 billion or 12.4% sales in the second quarter of this year alone. Connect’s trial of CBP-201 didn’t directly compare to Dupixent, but to compete, investors may have thought the results weren’t good enough.

Connect’s study’s primary efficacy endpoint showed statistically significant improvements in the percentage reduction in the Eczema Area and Severity Index (EASI) score from baseline to week 16. The study had three arms, 300mg Q2W, 150mg Q2W, or 300mg every four weeks (Q4W). All three were statistically superior to placebo at the 16th week.

For EASI secondary endpoints, all three doses demonstrated statistically significant improvements in the percentage of patients with at least a 50% or 75% decrease in EASI score from baseline at Week 16 compared to placebo.

The drug had a favorable safety profile.

“We are very pleased to have successfully completed this trial on schedule despite the challenges of the COVID-19 pandemic,” said Zheng Wei, co-founder and chief executive officer of Connect. “The positive efficacy and safety data provide additional evidence that CBP-201 has the potential to be an important addition to the armamentarium of the treatment of AD, a disease which we know is heterogenous with signs and symptoms varying greatly between patients.”

The company intends to initiate Phase III trials in the middle of next year.

Despite saying the study hit its primary endpoint and a secondary endpoint, Connect didn’t release any specific data. In addition to Dupixent, Pfizer’s Eucrisa is an effective AD drug. Connect’s drug would need to, at the very least, match the effectiveness of these drugs, and even exceed them, to carve out some of the markets. Investors likely wanted detailed data.

CBP-201 is an IL-4Ralpha inhibitor. It controls the signaling of IL-4 and IL-13, two cytokines associated with some allergic diseases. The mechanism of action is similar to Dupxient’s.

Keith Speights, an analyst with The Motley Fool, noted, “There are already effective atopic dermatitis drugs on the market in the U.S., including Regeneron’s and Sanofi’s Dupixent and Pfizer’s Eucrisa. Connect Biopharma would need to differentiate CBP-201 in terms of safety and/or efficacy to capture market share away from these existing products. The company’s lack of more data with its Phase II results seems to have lowered investors’ confidence that’s likely to happen.”

On November 19, Connect announced it had completed enrollment of its Phase II trial of CBP-307 in adults with moderate-to-severe ulcerative colitis (UC). The drug is an oral, next-generation small-molecule modulator of the sphingosinse-1-phosphate 1 receptor (S1P1), a G-protein coupled receptor (GPCR) involved in regulating the movement of T cells out of lymph nodes.

And today, the company announced the appointment of Stephen Chan as chief financial officer, effective today. He is succeeding Eric Hall, who was the interim chief financial officer. Previously, Chan was the chief financial officer of Delphon Industries.

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