Coverage of the shares of this biotech were recently initiated at HC Wainwright with a ‘Buy’ rating.
Gemphire Therapeutics (GEMP)
From Canaccord Genuity Research
Gemphire Therapeutics’ (GEMP) combined data analysis showed that 600mg gemcabene lowered LDL-C for hypercholesterolemic patients significantly vs. placebo (21% vs 5%, p<0.0001), supporting a clinically meaningful and commercially viable profile, in our view. We believe that a high placebo effect and high background statin dosing in ROYAL-1 affected the magnitude of benefit for gemcabene. Furthermore, subset analysis showed a 25% LDL-C reduction by gemcabene in patients with mixed dyslipidemia (high risk patient population) vs. 5% in the placebo group (p = 0.0002). For the analysis, GEMP pooled past studies (including COBALT-1 and ROYAL-1) and included patients who were hypercholesterolemic and were on stable statin or other lipid lowering therapy (gemcabene’s target patient population).
GEMP will meet with the FDA and the EMA in early 2018 to finalize Phase 3 trial design for hypercholesterolemia indications. GEMP has indicated that 600mg will be the target dose for the Phase 3 trial. We speculate that the trial design would be similar to the Phase 2b trials. ROYAL- 1 data will be presented at the AHA Scientific Sessions in November, and COBALT-1 data will be presented at FH Foundation’s Summit meeting in September. We are expecting to see a clean safety profile and additional details on concominant background therapy for ROYAL-1.
Previously, ROYAL-1 reported that 600mg gemcabene lowered serum C-Reactive Protein (hsCRP) by 40% vs. 6% for placebo (p<0.0001) on top of hsCRP reduction by maximally tolerated statin therapy. Similar hsCRP reduction rate was also observed in the combined analysis for hypercholesterolemic patients. We believe this could be a very strong differentiator for gemcabene since elevated serum hsCRP is a known biomarker for patients at higher cardiovascular risks. Thus, a reduction in hsCRP indicates that gemcabene should confer some cardiovascular benefit. Previously Novartis’ CANTOS study showed that reducing inflammation (measured by hsCRP) by 37% led to a 15% reduction in cardiovascular related MACE. We believe that gemcabene has cardiovascular benefit, and would be interested to see if it can be demonstrated/quantified in the Phase 3 trial.
We maintain our BUY rating and $31 price target based on our expectation that gemcabene will continue to show a very clean safety profile and meaningful LDL-C reduction during the ROYAL-1 and COBALT-1 data presentation. We will continue to maintain communications with the management regarding the Phase 3 trial design, which we are interested to see if cardiovascular benefit would be part of the efficacy assessment (likely to be part of secondary measure).
John Newman, Ph.D., Canaccord Genuity Research, www.canaccordgenuity.com, September 20 2017