Immunovant: Switching Lead Candidates Increases Risk

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Immunovant, Inc. switched focus from batoclimab to IMVT-1402, an anti-FcRn monoclonal antibody, to avoid cholesterol-related side effects.IMVT-1402 shows promise in reducing IgG antibodies without ...

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Klaus Vedfelt Immunovant, Inc. (NASDAQ:IMVT) is a pharmaceutical company developing targeted therapies for various autoimmune diseases. Batoclimab used to be their lead product candidate, and it is in late-stage trials. It has been replaced by IMVT-1402, a much earlier stage molecule that, like batoclimab, is an anti-FcRn monoclonal antibody designed to reduce harmful IgG autoantibodies in the body. According to the company, Batoclimab (and then IMVT-1402) is being developed as a potential best-in-class treatment for various autoimmune diseases, including myasthenia gravis (MG), Thyroid eye disease (TED), Graves' disease, and chronic inflammatory demyelinating polyneuropathy (CIDP). In MG and TED, the molecule is in pivotal trials. The switch from Batoclimab to IMVT-1402 Batoclimab is a fully human anti-FcRn monoclonal antibody. It is delivered as a subcutaneous injection to treat IgG-mediated autoimmune diseases. In such diseases, the body’s own IgG antibodies become pathogenic and target the body’s own tissues. An anti-FcRn molecule is designed to block neonatal Fc receptors (FcRn) and reduce the levels of immunoglobulin G (IgG) antibodies in the body. Batoclimab has produced strong midstage data for several indications. For example, here’s what a recent report says: In MG, phase 2 trials conducted in North America and China showed that batoclimab was associated with significant reductions in serum IgG and AChRAb levels. Clinical outcomes, including Myasthenia Gravis Activities of Daily Living (MG-ADL), Quantitative Myasthenia Gravis (QMG) and Myasthenia Gravis Composite scores also favoured batoclimab. Phase 2 safety outcomes showed that batoclimab was generally well tolerated; treatment-emergent adverse events (TEAEs) were mild to moderate in severity and most commonly included injection-site reactions, headache, dizziness, hypercholesterolemia, hypernatraemia, urinary tract infection and peripheral oedema. The one problem identified with batoclimab is a propensity to increase bad cholesterol, or LDL. Thus, we see the hypercholesterolemia adverse event in the list above. However, IMVT-1402 is designed to bind to the Fc receptor in a different orientation to batoclimab. This is postulated to give IMVT-1402 certain beneficial properties as it relates to cholesterol. As the company notes in their 10-K:  Likewise, IMVT-1402, our lead product candidate, has also been observed to reduce IgG antibody levels in a Phase 1 clinical trial conducted in healthy adults, similar to that observed in our original Phase 1 trial of batoclimab. Importantly, although FcRn also plays a role in maintaining serum albumin levels which in turn correlate inversely with low-density lipoprotein (“LDL”) cholesterol levels, no or minimal reduction in albumin and no or minimal increases in LDL cholesterol levels were observed in study participants administered either 300 mg or 600 mg of IMVT-1402 subcutaneously once weekly for four weeks. Across both dose regimens, the changes in albumin and LDL cholesterol were similar to those observed with placebo administration. This is a key attribute for IMVT-1402, which we believe could potentially allow its use as a treatment of chronic conditions requiring maintenance doses that achieve high degrees of IgG suppression.  Batoclimab’s data in CIDP has had some issues, including with several patients who “experienced rapid clinical deterioration during the study’s washout period or within the first two weeks of receiving batoclimab.” As a result, the company has decided to increase the trial’s duration by 2 quarters, to get more data that will be useful to jumpstart IMVT-1402 and inform its trial design. The company hopes to be able to use a lot of batoclimab data to push IMVT-1402 from early stage to registrational. The indications The three key indications are MG, CIDP and TED. For MG, the company says that existing treatment paradigms leave a lot to be desired in terms of safety and time to treatment effect. The current treatment paradigm includes acetylcholinesterase inhibitors such as pyridostigmine for early-stage disease, followed by immunosuppressive agents for later stages. Several invasive procedures are also used at this stage. Recently, argenx’ (ARGX) Efgartigimod or Vyvgart was approved, and, being an anti-FcRn antibody fragment, is a direct competitor to IMVT-1402. For CIDP, effective therapies include immunoglobulin therapy, corticosteroids or PLEX (plasma exchange), however, each has its burden of side effects. IVIg, for example, has side effects like “severe headache, thromboembolism, and hemolysis.” Side effects of corticosteroids include weight gain, hypertension, diabetes, and osteoporosis, while PLEX requires invasive central venous access and may not be widely available. TED, too, is treated in a first line setting with corticosteroids, or with other immunosuppressive drugs. These drugs have numerous side effects. Horizon Therapeutics’ (HZNP) TEPEZZA was approved in 2020, but it may produce hearing loss in some patients. Thus, there is a significant unmet need in TED as well. Financials IMVT has a market cap of $4.45bn and a cash balance of $560mn. Research and development expenses were $75.5 million for the three months ended June 30, 2024, while general and administrative expenses were $18.8 million. At that rate of cash burn, they have a cash runway of some 4–5 quarters. Risks IMVT is expensive for a company at its current stage of development. Its current market cap is over $4bn, and for such a massive valuation, it doesn’t have a lot to show. R&D expenses are also a tad high. Their resultant cash runway is only 4–5 quarters, which means there will be a dilution before they approach regulatory approval. Bottom line The IMVT story is basically this: it was running a molecule through trials, and somewhere in the middle of it, the company decided to switch its focus to another molecule which is mostly similar but doesn’t increase cholesterol like the other molecule. This has given a lot of competitive space to some of its rivals because they are yet to start pivotal trials for the 1402 molecule, while batoclimab was nearing late-stage development. Moreover, while they were making these changes, they were also expending a large sum of money on R&D, leading to a major risk of dilution before major catalysts. Furthermore, the most risky aspect here is that no two molecules are exactly alike, and as such, we know nearly nothing about IMVT-1402, which has only seen healthy volunteer trials. All we know about 1402 is surmised from batoclimab trials, so that is quite risky.  Considering all this, I will firmly avoid IMVT for now.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"analysis","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2475340676"}