Two Companies to Watch: Heron Therapeutics Inc (NASDAQ:HRTX) and RedHill Biopharma Ltd – ADR (NASDAQ:RDHL)

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Here are two companies that have just given us an update, and in doing so have become ones to keep an as the second quarter, 2016, matures – Heron Therapeutics Inc (NASDAQ:HRTX) and RedHill Biopharma Ltd – ADR (NASDAQ:RDHL).

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First then, Heron.

This one has been back and forth across the late stage development process for a while now, and those familiar with the clinical stage biotech space will no doubt already be familiar with the company. It’s lead development candidate is a drug called Sustol, which is a reformulation of an already approved active ingredient called granisetron. Granisetron is currently produced by Roche Holding Ltd. (ADR) (OTCMKTS:RHHBY) and commercialized under the trade name Kytril (though it’s also available as a generic), and it’s part of a family of drugs called 5-hydroxytryptamine type 3 (5-HT3) receptor antagonist’s. They’re used to combat chemotherapy-induced nausea and vomiting (CINV), which as its name suggests, is the nausea commonly associated with the chemotherapy a patient undergoes as part of their cancer treatment.

Heron’s Sustol is an extended release version of the currently available SOC, which offers the benefit of being able to treat late onset, and drawn out, nausea, as opposed to only the real time nausea that SOC targets.

The company has submitted the NDA to the FDA three times, and each time the agency has knocked the drug back, citing deficiencies in things like supply, manufacturing, etc. This time around, however, it looks as though Heron might finally get the green light for the drug.

The company just announced that the FDA has reported no deficiencies with the current NDA, and that the two bodies are in labelling discussions. Markets expect the FDA to report its final decision on the drug before April closes out, meaning we should see a yes or a no sometime over the next couple of weeks.

Heron is up 3% across yesterday’s session, and pre market on Tuesday, is up a further 7%.

Next up, RedHill.

This one’s a real small cap, valued at circa $165 million at last count. It’s up 5% on its weekly open, with the gains rooted in an update relating to its lead H.pylori infection drug, RHB-105. The meeting discussed, and finalized, the structure of a phase III pivotal – one on which RedHill hopes to base an NDA for the drug on completion. The trial is a confirmatory study, which follows a phase III just completed.

The drug is part of a new wave of compounds called protein pump inhibitors (PPIs). It’s composed of two types of antibiotics, and a PPI, and targets, as mentioned, the infection H.pylori. H.pylori is a GI tract condition, which causes a host of symptoms ranging from stomach ulcers to gastritis, and can increase the likelihood of peptic ulcers (by up to 20%) and stomach cancer (by 2%).

RHB-105s MOA is two fold. The two antibiotics target the infection itself, while the PPI reduces the amount of stomach acid produced by glands in the GI tract and the stomach lining. The

First of the two phase III trials showed some great results, with an overall success rate of 89.4% in eradicating H. pylori. It also met its primary endpoint of showing a stat sig improvement versus current SOC, defined as improved efficacy versus that of SOC of 70%.

So what’s next?

Well, the company expects that, on the back of the recent and finalized discussions with the agency, it will kick off the confirmatory phase III some pint during the second half of 2016. The last trial (the first of the two phase IIIs) was an eighteen-month completion, so chances are the confirmatory will be similar, or perhaps reduced to twelve months and conducted using the same patient population as the first. With this in mind, we’re looking at a late 2017, early 2018 completion and topline, and an NDA shortly thereafter.

Keep an eye out for interim analysis, and an update with a little more detail into the exact design of the trial, to gain insight into whether the confirmatory will build upon the positive data already seen, and when the confirmatory will complete. Here at Market Exclusive we’ll stay on top of the company and update as appropriate.

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