Trevena Inc (NASDAQ:TRVN) and Allergan plc Ordinary Shares (NYSE:AGN) Set to Gain on Topline Presentation


We just got word that Pennsylvania based development stage biotech Trevena Inc (NASDAQ:TRVN) is preparing to report topline from one of its late stage heart failure trials next month. On May 21, Heart Failure 2016, the annual congress of the Heart Failure Association of the European Society of Cardiology, will kick off in Florence, Italy. The event will last three days, and Trevena is set to present mid afternoon on the first day.

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The data in question relates to a a drug called TRV027, and Allergan plc Ordinary Shares (NYSE:AGN) has an exclusive option to license the drug if it gets approval. The strength of an Allergan sales team potentially behind the drug means its approval could be a real game changer for Trevena, so the upcoming data could inject some sharp upside into the company’s stock if it points to efficacy. With this in mind, here’s a discussion of the science behind TRV027, alongside a look at what to keep an eye on when the data hits.

There’s plenty of jargon in the following description, but stick with us – its far simpler a concept than the wording would suggest. It’s all rooted in a pathway that’s mediated by a receptor called angiotensin II type 1 receptor (AT1R). Heart failure occurs when the heart can’t pump blood around the body to the extent required. The current treatment for heart failure involves inhibition of the AT1R, through a drug that bocks all of the receptor’s functions. For acute heart failure, however, which is the target indication of TRV027, blocking all of AT1R’s functions isn’t very efficient as a therapy. This is where TRV027 comes in. The drug is a novel intravenous β-arrestin-biased ligand of AT1R. It has the inhibitory effects of the current SOC, through the blocking of what’s called G protein signaling. This blocking reduces vasoconstriction and renal sodium resorption – both of which contribute to this sort of heart failure. At the same time, however, it also promotes cardio contractility (which is just a term for heart muscle strength) and reduces apoptosis in cardiac cells, which means it stops cardiac cells from dying.

So, with that out of the way, what are we looking for in the trial data? The trial is split across three doses, 1 mg/hr, 5 mg/hr, and 25 mg/hr, weighted towards the 5 mg/hr dose (as this was shown to be more effective in an earlier trial iteration). The primary endpoint is a composite Z score, based on five predefined of criteria – (1) time from randomization to death through day 30, (2) time from randomization to heart failure re-hospitalization through day 30, (3) time from randomization to worsening heart failure through day 5, (4) change in dyspnea VAS score (calculated area under the curve) from baseline through day 5, and (5) length of initial hospital stay (in days) from randomization. The assumption here, then, is that Trevena has established a mean Z score for each of these criteria which it will use as a baseline at the end of the trial. It will then measure the Z scores calculated from each of these different factors. The higher the Z score across the population of data, the better.

What’s next? As mentioned, the data is set for presentation on May 21, 2016. We might get an advance look, however, as part of a press release ahead of the presentation. If we do, keep an eye on the bottom line (i.e. the Z score associated with the various doses versus placebo) as an indication of efficacy.

The takeaway? Allergan is funding the trial, so capital shouldn’t be a problem (at least with regards to this element of the company’s pipeline) going forward. It’s got a late stage candidate in an area of healthcare that is – as yet – unmet from an SOC treatment perspective, and a huge potential population (circa 30 million) if the drug reaches commercialization. It’s not without its risks – efficacy and safety is far from guaranteed even in a phase IIb – but if the data comes out positive, there’s plenty of available upside.

At time of writing, Trevena trades at $9.08, for a market capitalization of just over $471 million.

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