Regado Biosciences, Inc. (NASDAQ:RGDO) offers investors the rare opportunity for exposure to a highly differentiated, advanced stage drug in the $1 billion plus acute coronary syndrome (ACS) market for little over cash value.
Acute coronary syndrome happens when the heart is not getting enough blood, leading to unstable angina and heart attack. Regado's product pipeline encompasses three actively controllable antithrombotic systems: REG1, REG2, and REG3.
Regado's lead program, REG1, is a novel anti-coagulant system for patients with ACS with a potent factor IX inhibitor and active "brake system" to inactivate the anti-coagulant rapidly and prevent bleeding.
REG1 is being developed for use in patients with a wide variety of acute coronary syndromes, or ACS, undergoing a percutaneous coronary intervention, or PCI, a hospital-based procedure used to mechanically open or widen obstructed coronary arteries.
Regado has a unique platform of actively controllable antithrombotic drugs for patients with cardiovascular disease that is leveragable across multiple indications. REG2 and REG3 are in the preclinical stages being studied for venous thromboembolism (VTE) prophylaxis and Diabetic Vasculopathy, respectively.
"With tangible de-risking events in 2014 and 2015, we believe that significant upside potential exists as Regado seeks to defeat brand leader ANGIOMAX in a high-profile head-to-head study with favorable phase 3 design features," BMO Capital Markets analyst Jim Birchenough said in a client note.
The ongoing phase 3 REGULATE study of REG1 versus brand leader Angiomax in patients with non-ST elevated myocardial infarction (NSTEMI) and elective angioplasty patients is well designed to demonstrate superior ischemic event reduction against a lesser comparator than heparin.
Meanwhile, a review of phase 2b data historical trials of Angiomax compared to Heparin suggest that the worst case result for REG1 (upper bound of the 95 percent confidence interval) would still ! beat a consistent average result for Angiomax by 28 percent. In 2012, the Medicines Company (NASDAQ:MDCO) reported net Angiomax global sales of $548 million, including $502 million in the US.
"With ~$1B in brand sales potential in both the US and EU, we believe that a superiority claim to ANGIOMAX, lower bleeding risk than heparin and pharmacoeconomic benefit of early catheter removal and patient release should readily support the $600M peak sales estimate," Birchenough said.
The company recently announced the enrollment of the first patient in its REGULATE-PCI clinical trial. The late state study compares the effects of Regado's REG1 to bivalirudin in patients undergoing percutaneous coronary intervention (PCI) electively or for the treatment of unstable angina (UA) or non-ST elevated myocardial infarction (N-STEMI).
REGULATE-PCI, if successful, will become the cornerstone of Regado's international new drug applications, expected to be filed in early 2016.
Because of its actively controllable nature, REG1 may offer several advantages over the current standard of care heparin and Angiomax, including reduced ischemic events, reduced rate of serious bleeding events, predictable dosing, favorable pharmacoeconomics, and improved patient experience.
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Each year in the US, approximately 1.36 million hospitalizations have ACS listed as either the primary or secondary discharge diagnosis. REG1 is expected to cost roughly $1,300 per patient, at a slight discount to bivalrudin.
"We expect that REG1 will enter the market in 2017 and increase its market share to roughly 50% by 2022, in both NSTEMI-ACS and elective PCI patients and remain at that level through 2025, the outer limit of our model," Birchenough said.
"We estimate initial launch of REG1 in the US in 2017 with $63M in estimated sales and $12.6M in REG1 royalties, assuming 20% royalty rate! on futur! e partnership. We estimate US sales increasing to $611M in 2022," the analyst added.
Ultimately, the phase 3 progress with lead product REG1 would attract large pharma interest in the form of partnership or M&A.
Regado, which went public in August 2013, is up 48 percent since its IPO. In its short trading period, RGDO traded as high as $9.39.
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