Agile Therapeutics, $AGRX, took a beating yesterday (-75% and selling below cash value at one point) due to investors viewing Phase 3 data on their lead product, a combined hormonal contraceptive (CHC) patch (Twirla), as a huge miss.
In my opinion, the concern over the data is overblown as the context of the trial has not been taken into account. Key outcome measure of trial efficacy was the Pearl Index (PI), essentially a measure of the % of women who will get pregnant per year despite using the method as a contraceptive (the lower the better, obviously).
Overall PI came in at 4.80 with 95% CI upper bound at 6.06. This was viewed negatively as most expected PI to be below 3 to be competitive vs. other contraceptive methods. Also, discontinuation rate was 51%, another seemingly negative characteristic.
However, what everyone is missing is that this trial was unique in that it had a much more representative sample of the general female population with 60% overweight or obese, and a race makeup of 24% Black, 67% White, 9% other. There are well-documented publications that highlight a higher PI association with increased BMI and in certain segments of the population (Black, Hispanic).
The only currently approved transdermal CHC patch is Ortho Evra which in its Phase 3 trial had a racial makeup of 91% White, 2% Asian and less than 5% Black. It had a much lower PI of around 1.5, but only about 3% of women in that trial were obese, clearly not representative of US population.
If you look at a recently approved combined oral contraceptive, Quartette, which did account for diverse BMI and race, you see a PI of 3.2 which is higher than the $AGRX PI. Also, the 1 year discontinuation rate was 41%, even though this is just a pill you have to take once a day. In fact, discontinuation for contraceptives are typically very high, with 50% discontinuation for the year being common, according to Shoupe & Mishell (The Handbook of Contraception).
To add to all of this, the safety and tolerability profile of $AGRX's Twirla patch is incredible - owing to its low dose, only about 1% had any serious side effects at all. Note that the higher dose Ortho Evra patch received an FDA black box warning (pretty much the agency's strongest warning) based on an unfavorable amount of adverse events after approval.
To top it all off, $AGRX designed and conducted this study hand in hand with the FDA after receiving a CRL for its first Phase 3 trial, so basically they covered everything the FDA could ever want to see out of the data and resubmission of the New Drug Approval (NDA). In fact, historically, of all resubmitted NDAs with a documented FDA decision, 80 of 81 were approved.
So what we are looking at here are investors taking the Phase 3 trial data out of context to the point of massive negative overreaction. In my opinion, there is probably a greater than 50% chance the FDA will approve Twirla by end of 2017, and if that happens you are looking at price targets from $10 to $20, at minimum a 5x return.
I'd love for anyone to tell me why I'm wrong on this, I've been trying, but I just can't find any reasons.
TL;DR $AGRX phase 3 trial data was actually quite positive when not taken out of context and hence it is fairly likely we will see approval on their lead product within 2017
Submitted January 04, 2017 at 11:02AM by argyfish http://ift.tt/2hQAPNh
