Hold Cadila Healthcare Ltd For Target Rs.640 - Emkay Global
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Saroglitazar’s PBC Phase 2 data: Good efficacy, average safety
* Saroglitazar’s Phase-2 trial data for Primary Biliary Cholangitis (PBC) suggest mixed results with slightly better efficacy than competition but modestly inferior safety profile. We lower our risk-adjusted NPV for PBC indication to Rs35/share from Rs50/share, primarily to reflect launch in FY27 vs. FY24 (as expected earlier). Consequently, we cut our TP for Cadila to Rs640 from Rs655. Maintain Hold.
* Saroglitazar has shown the best results with respect to primary endpoint of ALP (Alkaline phosphatase) reduction. Saroglitazar 2mg led to mean ALP reduction of 51% from baseline in week 16 while 4mg arm showed 49% reduction. On the composite endpoint, Saroglitazar’s responder rate in week 12 came second only to Seladelpar. 71% of patients in Saroglitazar 2mg arm and 69% in Saroglitazar 4mg arm responded in week 12.
* Safety profile of Saroglitazar was modestly inferior, with 14% of patients in 2mg arm experiencing serious adverse event. Moreover, one patient in Saroglitazar arm was highly likely to have developed drug induced liver injury and three were cited as probable. The side-effect profile also had bearings on Phase-3 dosage selection, which has been changed to 1mg and 2mg instead of 2mg and 4mg in Phase 2.
* Phase 2 PBC trial data equivocal:
Our analysis of Cadila’s Phase 2 PBC trial data extracted from the abstract presented at AASLD Liver Meeting 2020 suggests mixed results. On the efficacy front, Saroglitazar passes with flying colors but the side-effect profile remains more adverse than competition. Abstract presentation provided limited details on secondary endpoints such as ALT, AST, pruritus change and change in bilirubin which could have provided more insights. The company enrolled a total of 37 patients, with 13 patients on 4mg dose, 14 on 2mg dose and 10 on placebo.
* Efficacy is modestly superior:
On primary endpoint of ALP reduction, Saroglitazar shined with mean ALP reduction of 51% for 2mg dose and 49% reduction for 4mg dose at week 16. Saroglitazar treatment led to rapid reduction of ALP within the first four weeks with sustained improvement till week 16. ALP reduction was statistically significant as compared to placebo for both doses. This compares to reduction of 36% for Ocaliva 10mg, 48% for Elafibranor 80mg and 44% for Seladelpar 10 mg at week 12. While Saroglitazar data is taken at week 16, ALP reduction at week 12 would also have been similar based on the chart published by the company. Saroglitazar also showed superior response rate for composite endpoint (ALP≤1.67 ULN (upper limit of normal), ≥15% reduction in ALP and total bilirubin ≤ULN) with 71% of patients on 2mg dose and 69% of patients on 4mg dose. This compares to 78% responder rate for Seladelpar 10mg, 67% for Elafibranor 80mg and 40% for Ocaliva 10mg.
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