By Gary Stern
According to the Cleveland Clinic, protease inhibitors are medications that treat viral infections and prevent them from duplicating. They’re used to fight HIV/AIDS, Covid 19 and hepatitis C. For example, Paxlovid is a protease inhibitor that became very popular to prevent Covid-19 from copying itself. But protease inhibitors can have side effects such as causing fatigue, coughing and kidney stones.
KalVista Pharmaceuticals (NASDQA-KALV), based in Cambridge, MA, and Salisbury, England, is a clinical stage pharmaceutical company specializing in creating oral, small molecule protease inhibitors.
The company is working on several projects at once including its KONFIDENT trial, which is involved in phase 3 of a trial for a medication that treats HAE or hereditary angiderma. It said it remains on track for a new drug application from U.S. Food and Drug Administration (FDA) in the first half of 2024. It describes HAE as causing, “debilitating and life-threaten illness that can cause painful, unpredictable attacks of swelling.”
That second trial involved 136 global participants across 20 countries, which it said made it the “largest clinical trial ever conducted in HAE based on the number of subjects.”
Financially, as a start-up it generated no revenue in the third quarter ending Oct. 31 and had $19.1 million in expenses for research and development. Nonetheless, it had $103 million in reserve, down from $149 million in April 2023.
Looking into the immediate future, Maury Raycroft, an equity research analyst specializing in biotechnology for Jefferies, who recently transplanted from New York City to San Fransisco, says that it estimates that its drug trial on Konfident (whose name will be changed if it goes to market) will likely be approved in 2024.
“It’s an important drug for KalVista,” he says, “because it will be their first product approved.
He estimates that, if the trial goes according to its plan, approval could come this year or be delayed until 2025.
If approved, it changes the market’s view of KalVista Pharmaceutical. “It would position them as a company that has a product that could be valuable and tell investors that its market cap is undervalued,” Raycroft explains. In fact, its current market cap is $450 million.
HAE affects about 6,000 to 8,000 people in the U.S. But worldwide he says that number could reach a quarter of a million patients, and could result in global sales that could reach $900 million.
Given that positive outlook, Raycroft acknowledges that something could go wrong in the third trial, or that the results could be mixed and that would “create regulatory uncertainty.”
There are other biopharmaceuticals that already have HAE medications on the market. One is used in a prophylactic way, and patients take it, for the rest of their life, to prevent HEA from happening, and the other is an on-demand or acute use drug taken after a breakthrough attack.
Raycroft says one of the most popular drugs on the market to treat HAE has been icatibant, which involves an “injection known to have injection site pain, and it is not easy to carry around and patients miss or do not get treatment for this reason.”
KalVista’s drug would serve as the only oral drug on the market that patients take for breakthrough attacks and would also appeal to patients with less severe HAE and would help them manage the disease flexibly, involving take the drug on demand when they feel an attack starting, he suggests.
Hence, with KALV’s drug, patients can attack the ailment more easily earlier and more frequently.
In fact, Raycroft cited that most experts cited that 30% to 60% of attacks go untreated, or are attended to too late, because of the existing drug’s difficulty. Physicians say “more attacks can be managed with an oral treatment and this would help improve patient quality of life,” he notes.
But even KalVista’s drug has its limitations. “They are not able to completely prevent HAE attacks.
Patients continue to have attacks despite prophylactic treatment; hence the breakthrough attacks occur,” he notes. One current drug BCRX’s oral drug Orladeyo is effective with about 30% to 40% of patients currently.
KalVista has another drug in its pipeline in a trial called XIIA, that could be used for HAE, that is also an oral drug. It is currently in preclinical or early development stage. It’s aiming to address
“HAE prophylactic management as well as some other inflammatory or fibrotic diseases,” Raycroft says. It too, if all works out, would serve as an oral medication more convenient than the current remedies on the market.
The next stage for XIIA is to “get into enabling studies to move it into clinical development. The global market for prophylactic HAE is likely approaching or exceeding $2 billion, and the market for additional indications could be significant as well,” Raycroft points out.
If the approval comes through later this year for its KONFIDENT trial, Raycroft opines that KalVista could be acquired by a larger, established firm, depending on the price. If the stock is approved, Raycroft expect that the stock could double. If the trial falters, the stock could nose dive into 70% of its current value.
Even after approval, some firms might want to make an offer after they see how the initial launch turns out. But Raycroft, who has studied the clinical trials closely, expects that for the most part, the third trial will go smoothly and they will gain approval. The question about KalVal that looms is what is the market opportunity if it gains approval and how much revenue will be generated worldwide.
