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Prolor Biotech (PBTH): A Lasting Opportunity In Therapeutic Proteins

 September 24, 2012 06:12 PM


(By Mani) Prolor Biotech, Inc. (NYSE:PBTH) remains still largely overlooked despite multiple 12-18 month catalysts.

Prolor is a development-stage biopharmaceutical company with a therapeutic focus on endocrinology, hemophilia, and obesity. Its technology, Carboxyl Terminal Peptide (CTP), could be attached to an array of existing therapeutic proteins, stabilizing the therapeutic protein in the bloodstream and extending its life span without additional toxicity or loss of desired biological activity.

The company's most advanced drug candidate is a long-acting version of human growth hormone (hGH) called hGH-CTP. The company expects to commence a Phase III study of hGH-CTP by YE12 for adult growth hormone deficiency (GHD). Prolor is also evaluating hGH-CTP in an ongoing Phase II study for GHD in children.

[Related -Prolor Biotech, Inc: An Overlooked Story With Strong Pipeline]

"If successful, hGH-CTP could enter the $2.5- 3.0B hGH replacement market and replace once-daily hGH injection products with once-weekly injections of hGH-CTP. Reducing the number of painful injections would likely improve patient compliance, clinical outcomes, and lower costs to payers," Oppenheimer analyst Boris Peaker said in a client note.

The technology platforms of Prolor, whose hGH-CTP has the potential to take a significant share of the hGH market, allows it to develop drugs designed to increase the lifespan of proteins and peptides in the body.

The company has certain exclusive worldwide rights to CTP, a short, naturally occurring peptide that can be used to slow the removal of a therapeutic protein from the body. The company's hGH-CTP and hemophilia candidates incorporate CTP while its obesity candidate uses a reversible PEGylation technology.

[Related -PROLOR Biotech (PBTH): Positive Toxicology Results Support Potential of RPeg Technology]

"Merck developed and now sells a fertility drug using CTP modification, which we believe validates this technology," the analyst said.

The results of a 39-patient Phase II study of hGH-CTP had no unexpected adverse events, and data showed excellent safety and tolerability. The study confirmed the potential of hGH-CTP to maintain efficacy while reducing injection frequency to once-weekly or twice-monthly. Prolor expects to initiate a 120-150 patient Phase III study to evaluate 6 months efficacy and 12 months safety by the end of the year.

hGH-CTP received orphan designation in adult and pediatric GH deficiency, and only a single Phase III study is required to gain approval for each indication. Results are expected by year-end 2013 in both the Phase II pediatric study and Phase III study in adults.

Meanwhile, the company is developing factor VIIa-CTP, a long-acting version of Factor VIIa used for the treatment of hemophilia. Preclinical results suggest that the candidate can potentially reduce the severity and duration of bleeding events as well as dosing frequency.

"We expect this candidate to advance into Phase II testing in 1H13," Peaker noted.

In addition to its Factor VIIa program, Prolor is using its CTP technology to develop a longer acting Factor IX called Factor IX-CTP.

The company is also developing a long-acting version of oxyntomodulin using reversible PEGylation technology for which the company could commence a Phase I trial in the first half of 2013.

"We believe PROLOR could seek to partner this candidate given the large requisite trials," Peaker said.

Market experts expect hGH-CTP to capture a 40 percent share of the existing hGH market at peak and be priced in parity to current hGH products.

"We estimate the hGH market to grow at a 2% CAGR from the $2.75B current market size and for PROLOR to maintain exclusivity for hGH-CTP through patent expiry in 2032," the analyst wrote.

From the competitive perspective, hGH biosimilars would continue to enter the market, but these new entrants would not impact Prolor's hGH-CTP due to its dosing convenience advantage.

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