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XBiotech Inc. (NASDAQ:XBIT) has been able to complete recruitment for a few studies already, and it has initiated another one targeting patients with Rheumatoid arthritis [RA]. Natrunix is being developed to treat patients with RA and pancreatic cancer. Hutrukin is being advanced to help patients with stroke.
The premise of this biotech between both of these candidates is to use the body’s natural immune response to inflammation, without any modification of an antibody. Thus, this has a technology platform known as True Human™ antibodies. It believes this approach will result in not only improved efficacy for patients, but a far more tolerable treatment option compared to the rest. Having said that, it remains to be seen whether the studies above prove the concept of True Human antibodies. Still, with the completion of enrollment of a few studies, plus the initiation of another in RA, I believe that it remains a hold.
True Human Antibodies Platform Technology Could Change Scope Of Treatment
In terms of the most recent clinical development from its pipeline, it completed enrollment of its randomized, open-label, placebo-controlled phase 1 dose-escalation study. The purpose of this study is to see if Hutrukin can reduce brain injury after a person has an ischemic stroke. Ischemic stroke occurs when there is a loss of blood flowing into a portion of the brain, which in turn results in cell death.
Then what is the goal of Hutrukin? Where this drug is being deployed is before patients are treated for such a blood clot in the brain. An ischemic stroke needs to be treated quickly, and this is done in one of two ways:
- Clot buster drug.
- A mechanical catheter that opens up the arteries.
Sounds good, right? Well, it is good to get rid of the clot itself for ischemic stroke. However, the rush of blood back in abruptly can cause injury. This phenomenon is known as reperfusion injury. Despite being able to get blood to flow back through the area with the clot, injury still occurs.
There is where Hutrukin could possibly come in to help these patients. The test is to see if patients given Hutrukin before the restoration of blood to the artery can reduce or prevent reperfusion. Best of all, if clinical success is achieved, there will be no competition in place. That’s because there are no drugs or treatments available to reduce or prevent reperfusion injury in patients with ischemic stroke.
What Hutrukin, plus Natrunix, target, is pathological inflammation that occurs with interleukin-1 [IL-1]. While there are some biologics that target IL-1, there are none that specifically target IL-1a that these two drugs from XBiotech are targeting. Not only that, but the approach of this biotech is to find rare antibodies derived from healthy donors to be used against certain disorders. All the while, the antibodies are not being modified in any fashion [natural immune response in healthy people]. By doing this, safety can potentially be top-notch, while at the same time only deploying a natural immune response.
However, one caveat is that it remains to be seen if this True Human antibodies approach is superior to that of other scientific approaches. One would believe that a natural immune response would be superior to overengineered monoclonal antibodies, but this won’t be known until the company releases data from several of its studies.
Two Additional Shots On Goal In Large Market Indications
The thing about this biotech is that it can use its True Human antibodies technology approach to target various disorders. Matter of fact, IL-1a can contribute to the progression of many medical conditions like stroke, cancer, heart attack, arthritis, and many more. Having said that, there are two other target indications is it looking to go after. These would be the use of Natrunix for the treatment of patients with rheumatoid arthritis [RA] and pancreatic cancer. In terms of pancreatic cancer, it announced back on August 30th of 2023 that it had completed enrollment of the phase 2 portion of its phase 1/2 randomized, double-blind, placebo-controlled study. The goal here is not just for patients to receive Natrunix alone, but in combination with chemotherapy.
The first problem is that IL-1a allows for the tumor to grow and develop new blood vessels [neovascularization]. A second issue is the chemotherapy itself also results in IL-1a production. Thus, treatment with Nutranix knocks out “two birds with one stone.” Consider that this drug would:
- Induce antitumor activity and reduce tumor neovascularization, growth, and spread.
- Reduce chemotherapy side effects, which in turn allows patients to receive more cycles of treatment.
If Nutranix can be successful in achieving both of these outcomes, it will do so with a highly sufficient safety profile. Especially, given that an unaltered monoclonal antibody should have less side effects compared to other genetically modified types of treatment. The global pancreatic cancer treatment market is projected to grow to $6.85 billion by 2029.
Another promising program would be the advancement of a phase 2 study, using Nutranix for the treatment of patients with rheumatoid arthritis. The global rheumatoid arthritis market is expected to reach $62.93 billion by 2027. The primary endpoint of this phase 2 study is the American College of Rheumatology [ACR] 20% response or ARC 20 at 12 weeks.
The first patient was dosed in this mid-stage study back in August 2023. IL-1a has been indicated to cause inflammation in this disease. However, there have not been successful attempts. It is believed that if XBiotech applies its technology here, that it could solve the puzzle. Again, because it is taking an entirely different unaltered monoclonal antibody approach.
Financials
According to the 10-Q SEC Filing, XBiotech had cash and cash equivalents of $201 million as of March 31, 2024. A big reason for the cash on hand was that back in 2019 it sold a True Human antibody that blocked IL-1a activity for $750 million in cash and up to the possibility of receiving $600 million in potential milestone payments. It sold this IL-1a drug to Janssen as part of the “Janssen Transaction” that took place. Since then, it has developed new IL-1a product candidates targeting oncology, rheumatology, and another unique anti-IL-1a in a phase 1 study for neurology.
Having said that, I believe that it will need to raise additional cash in the coming months. That’s because it stated that it believes it has enough cash on hand to fund its operations for at least 12 months from the date of the 10-Q SEC Filing, which was filed on May 10th, 2024.
Risks To Business
There are several risks that investors should be aware of before investing in XBiotech. The first risk to consider would be regarding the True Human antibody technology platform. Even though it had success in the past in developing such a technology and selling it to Janssen, it doesn’t mean that the new product candidates will do well in the clinic.
The second risk to consider would be the ongoing clinical trials. It remains to be seen whether Hutrukin and Natrunix turn out to be successful in treating several of the disorders I noted above like pancreatic cancer, reperfusion injury in ischemic stroke and rheumatoid arthritis. That is, there is no guarantee that the primary endpoints for each of the studies noted above will be met with statistical significance.
The third and final risk to consider would be regarding the financial position that this biotech is in. As I stated before, it believes that it only has enough cash on hand to fund its operations for at least the next 12 months. This leads me to believe that it is going to need to find a way to raise additional cash in the coming months.
Conclusion
XBiotech has done well to advance the use of IL-1a to target various disorders. Not only has it developed such new drugs to bring into the clinic, targeting large market indications, but it was able to sell a prior IL-1a to Janssen.
While it remains to be seen if it can achieve success with its unaltered monoclonal antibody approach, it has several shots on goal to do so. This would be the targeting of reperfusion injury for ischemic stroke using Hutrukin, and then pancreatic cancer and rheumatoid arthritis using Natrunix. With several enrollment completions, plus a prior sale of a drug targeting IL-1a, I believe that XBiotech Inc. stock remains a hold.
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