By Gary Stern
Heart diseases, more so than cancer, are the number one ailment that causes death in the United States. In fact, the American Heart Association reported that in 2020, nearly half of all Americans suffered from some type of heart disease. As people age, those numbers rise since 77% of men and 74% of women, age 60 to 79, suffer from some form of cardiovascular disease.
Some heart diseases are rarer than others. That’s where Aerovate Therapeutics, (NASDAQ-AVTE) enters the picture. Aerovate is a Waltham, MA-based, clinical stage biopharmaceutical company that addresses rare heart diseases. Its market capitalization is about $530 million. The company states that its mission is to “give people living with cardiopulmonary disease greater control over their health.” It’s developing drugs that help alleviate those coronary ailments.
Aerovate has been developing a medication that can lessen the effects of pulmonary arterial hypertension (PAH), which affects about 70,000 Americans – 43% of whom face a 5-year mortality rate. Of the people affected, 77% are women.
Aerovate describes PAH as facing an “unmet medical need” that strains the heart and limits physical activity and can lead to heart failure and death.
It is working on AV-101, its proprietary dry powder inhaled medication that is a formulation of the drug imatinib. In November 2023 it announced that it was in the second phase of its clinical study of AV-101. In the initial trial, Aerovate said the powder inhalation was well-received by most patients “with no serious adverse events reported.” If the drug is successful, it will be given a new name for commercial purposes.
In the second trial, 202 patients were involved, and typical PAH patients vary in age between 30 to 60 years, with an average age of 53 years at diagnosis.
Even though PAH affects from 30,000 to 40,000 patients a year in the United States. Joseph Thome, managing director and senior biotechnology research analyst at TD Cowen, explains that if the trials are successful, the brand drug price would cost between $200,000 and $250,000 a year, creating a market of several billion dollars annually.
With some of these rare pulmonary diseases, Thomas points out, “There are no cures. If you don’t get the right medication, you die rapidly.”
Thome adds that “There’s a large need for cures for pulmonary and rare diseases, and lots of interest from investors and also corporate development.”
Aerovate faces stiff competition from companies already addressing rare pulmonary diseases such as Merck and United Therapeutics, among several biopharma companies.
Aerovate’s trial revolves around an inhaled version of an oral drug called imatinib. Previous trials by another drug company faltered because of the gastroenterological side effects, and some patients also suffered from bleeding on the brain.
What Aerovate is hoping for is that “with the inhaled version you don’t get the whole body exposed” and the side effects aren’t there, Thome says.
Aerovate already has a patent for the medication, and is collecting data for the second phase. It expects to enter the third clinical trial stage in November, which will likely culminate in 2025.
If all is successful, they would file their application in 2025 and gain approval in 2026. That first year TD Cowen has a financial forecast of $23 million for Aerovate’s revenue, but if the trial is successful, it could grow to $750 million.
Thome also notes that the drug would take effect with other pulmonary medications, but as “long as insurance companies provides reimbursement you can stack the drugs together.”
Moreover, if this drug passes all the hurdles, there’s one other possibility. Thome notes that there has been a glut of larger pharmaceutical companies scooping up successful start-up clinical trial companies. “Even if this is a one-drug company, that possibility exists,” he says.
He cited several possible acquirers who have pulmonary practices such as Astra Zeneca, Sanofi, and GSK, and other possibilities include Merck, JNJ, and United Therapeutics. Since these last few companies already have a presence in PAH, it could trigger FTC concerns, he adds.
