Cell signalling inhibition is one of the most important areas of research and development in the biotech space of the last thirty years. Proteins are at the root of cell behavior, and our ability to selectively stop them from carrying out, or facilitating, their intended mechanism has opened up a whole world of potential therapies, in a range of indication categories. Here’s a look at two of the most advanced inhibitors from a clinical perspective, with a note on which companies to keep an eye on with respect to each type.
PD-1 Inhibitors
This is the inhibitor that has probably gotten the most press over the last couple of years. PD-1 inhibitors inhibit a process called programmed cell death 1 (PD-1) that, as its name suggests, is a protein that codes for cell death. There is a wide range of ways that a cell can die, and this protein is associated with one in particular called apoptosis. When cells reach maturity, or when our immune system recognizes them as harmful, a ligand (think of this as the complex that activates the protein receptor – in this case the PD-1) attaches to the receptor and induces apoptosis, which is essentially the cell rupturing its own outer membrane, spilling out its insides and signaling the immune system to clean it up. In many types of cancer, this process is inhibited through the expression of a ligand called PD-L1, which suppresses PD-1 and – in turn – reduces the rate of apoptosis. This is why cancer cells are so prolific. PD-1 inhibitors inhibit the immunosuppressive action that PD-L1 has on PD-1, theoretically translating to an increased immune (and in turn apoptosic) response to cancer cells. Simple, right? From an investment exposure perspective, the company that is leading the way in this space is probably Bristol-Myers Squibb Company (NYSE:BMY), with its PD-1 inhibitor Opdivo, a lung cancer treatment. Opdivo chalked up $305 million revenues for BMS in the latest reported quarter (Q3 2015), and the company is already at the NDA stage for further indications. Others to watch are Merck & Co. Inc. (NYSE:MRK), with Keytruda and Pfizer Inc. (NYSE:PFE) with its clinical stage avelumab.
Janus Kinase Inhibitors
All nucleated cells have a pathway through which external stimuli elicit a response. These responses range from proliferation, i.e. replication, to cell death (as described in the PD-1 section). The process through which these stimuli reach the nucleus of the cell is called signal transduction, and it involves a cytokine receptor on the outside of the cell membrane, a cytokine to activate the receptor and an enzyme to phosphorylate the receptor. In this instance, Janus Kinase (JAK) is the enzyme. It binds to the receptor, and waits for a cytokine to come along. When one does, and attaches to the receptor, the JAK adds a phosphate to the receptor, and kicks of the signaling process. JAK is associated with a range of things that translate to cell reproduction in various diseases, but it is best well known for initiating what’s called transcription – the first stage of DNA replication (with the remaining phases resulting in a nucleus splitting and forming the root of a new, identical cell. JAK inhibitors stop this process, and in doing so, stop DAN replication in a disease cells nucleus.
So what sort of indications are we looking at with JAKs? Well, again, there are a number of oncology indications that are targets at present. Incyte Corporation (NASDAQ:INCY) has a host of late stage blood cancer trials ongoing with its lead JAK candidate Jakafi, but the real money for JAK (and the primary current focus as a result) is inflammatory diseases. Gilead Sciences Inc. (NASDAQ:GILD) just teamed up with Galapagos NV (NASDAQ:GLPG) with the latter’s lead JAK candidate filgotinib, a drug which in September 2015 AbbVie Inc. (NASDAQ:ABBV) refused to exercise its in-licensing rights for. A number of analysts are slating this as a dropping of the ball by AbbVie, and Galapogos has gained throughout the new year on the deal. The two companies expect to kick off concurrent phase IIIs, one in a rheumatoid arthritis indication and one in a Chron’s disease indication, before the second half of this year. Both of these indications have blockbuster potential, both in Europe and the US, so both companies stand to gain on the reaching of commercialization of filgotinib in either indication.
And there we go. Two hot sub sectors in biotech, and a host of potential exposure options – from clinical trials to commercialized, established blockbusters. That’s not all, of course. There are plenty more of these cutting edge therapies in the R&D phase, so as we move forward into 2016, keep an eye out for more of our subsector focus exposures here at Market Exclusive.