Our March highlight just gained 50%: Alder Biopharmaceuticals Inc (NASDAQ:ALDR)


On Monday morning, Alder Biopharmaceuticals Inc (NASDAQ:ALDR) announced topline data from its two concurrent trials of its lead pipeline candidate, ALD403. The drug is a migraine indication, and on the data’s release, the company gained just short of 50% to close out the session at $25, and a further 5% post-close to bring it to Tuesday’s open of $26.85 – a $1.12 billion market capitalization.

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At the beginning of this month, we highlighted Alder as one to watch throughout March, noting that this data release had the potential to inject some real upside momentum into the company’s share price – and it’s done exactly that. As a follow up to our initial analysis, here’s a look at the data, what it shows, and what it means for Alder (and its shareholders) going forward.

First, let’s quickly recap the drug. As mentioned, it’s a migraine target, and part of a family of inhibitors called calcitonin gene-related peptide (CGRP) inhibitors. There are two types of CGRP (both are proteins) in our bodies, each of which are produced in differing parts of the gray matter in our spine. One is produced in a section called the ventral horn, and it’s responsible for nerve tissue regeneration. The other, and the one Alder is interested in, is produced in the dorsal horn, and it’s responsible for (or at least plays a major role in) pain transmission. As well as being related to pain transmission, it’s also a vasodilator. The major difference between a migraine and a standard headache is the opposing causes – a migraine is caused by vasodilation, and the pressure this puts on cranial nerves. A headache is caused by vasoconstriction. This is why certain types of traditional headache medication can act to make migraine symptoms worse – ibuprofen, and beta blockers, for example, are vasodilators.

Through the inhibition of the CGRP protein, with its drug ALD403, Alder hopes to negate the vasodilative effect that causes migraines. So, that out of the way, what did the data tell us?

As is probably clear from the impact that the data had on the company’s stock price, it suggested that the drug works, and works well. The trial was a double blind, single intravenous infusion, focusing on four dosage levels – 10mg, 30mg, 100mg and 300mg. At the beginning of the trial, patients got one of the four doses (or a placebo), and recorded the percentage reduction in migraine days per month across a twelve-week period.

The primary endpoint of the trial focused on the two higher doses – the 100mg and the 300mg – targeting a statistically significant improvement in reduction of migraine days over the placebo arm. In the 100mg arm, 54% of patients reported a 50% reduction, while 31% reported a 75% reduction. In the 300mg arm, 57% of patients reported a 50% reduction, while 33% reported a 75% reduction. These compared to placebo reductions of 50% in 41% of patients, and 75% in 21% of patients. In other words, in beating the placebo data considerably, the trial met its endpoint. Further, and perhaps just as importantly, the data showed an increase in efficacy in line with the increase in dosage. This sort of correlation can be especially important when it comes to FDA decision day.

So, what are we looking at going forward? Well, the latest data has paved the way for a number of key near-term milestones, and each of these has the potential to further add to the upside already seen in Alder. The first is the H2 2016 initiation of a pivotal trial in this indication called PROMISE 2, which the company hopes to use to build on the efficacy data already collected. This, and the data we’ve already discussed, will form the basis of an NDA that we should see submitted before the end of 2017, assuming all runs smoothly. We should also see follow on data from the phase IIb we’ve discussed, measuring response at 24 and 48 weeks – data that should come out during the third and fourth quarters of the year.

One final note. Alder is not the only company developing this sort of treatment (i.e. CGRP) in a migraine indication. Big name pharmas such as Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA), Amgen, Inc. (NASDAQ:AMGN) and Eli Lilly and Co (NYSE:LLY) have CGRP candidates in their pipelines – candidates that could pose a threat to Alder’s ALD-403 going forward. However, with the latest data release, ALD-403 has become not only the largest CGRP study in migraines, but also the first drug to demonstrate efficacy with established FDA approvable endpoints. In other words, as things stand, it’s a frontrunner.

We said it at the beginning of the month, and we’ll reiterate it today – very much one to watch throughout 2016.

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