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Business Update
Dosing Underway for Combination Trial of EPI-7386 and Enzalutamide
On January 19, 2022, ESSA Pharma, Inc. (NASDAQ:EPIX) announced that the first patient has been dosed in the Phase 1/2 clinical trial of EPI-7386 and enzalutamide in patients with metastatic castration-resistant prostate cancer (mCRPC) who have not been treated with second-generation antiandrogens. ESSA is sponsoring the trial, which will begin with a Phase 1 dose-escalation portion followed by the Phase 2 portion that will compare enzalutamide as a monotherapy to the combination of enzalutamide and EPI-7386. Dosing for the Phase 1 portion of the trial is beginning at 600 mg once-daily EPI-7386 and 120 mg once-daily enzalutamide. We anticipate approximately 30 patients being enrolled into the Phase 1 portion of the study. After determining the recommended Phase 2 dose (which we expect to occur in the second half of 2022 or first half of 2023), we anticipate approximately 120 patients being enrolled into the Phase 2 portion of the study.
In addition to the combination therapy trial with enzalutamide, EPI-7386 will also be evaluated in a combination trial with daralutamide (in collaboration with Bayer) and in two trials with Janssen in combination with a) apalutamide and b) abiraterone acetate + prednisone. Those trials are being conducted by Bayer and Janssen and should initiate in the first half of 2022.
The rationale for combining EPI-7386 with second-generation anti-androgens is supported by multiple preclinical studies showing a deeper and broader suppression of androgen receptor (AR) signaling when EPI-7386, which targets the N-terminal domain of the AR, is combined with an antiandrogen, which targets the ligand binding domain (LBD) of the AR. The following graph on the left shows AR binding to genomic DNA when in the presence of only R1881, a synthetic androgen, or R1881 in combination with EPI-7386, enzalutamide, or both. AR binding to genomic DNA is almost completely abrogated when cells are treated with EPI-7386 in combination with enzalutamide. The following figure on the right shows tumor cell shrinkage when mice are treated with the combination of EPI-7386 and enzalutamide in the VCaP prostate cancer model.
Update on Phase 1 Trial of EPI-7386
ESSA Pharma is currently conducting a Phase 1 clinical trial of EPI-7386 in patients with mCRPC who had progressed on two or more systemic therapies, including at least one second generation anti-androgen therapy (NCT04421222). It is a multi-center, open label, ascending multiple dose trial with the primary objective being to evaluate the safety and tolerability of EPI-7386. Secondary objectives include determining the maximum tolerated dose of EPI-7386, defining the recommended Phase 2 dose of EPI-7386, evaluating the pharmacokinetics (PK) of EPI-7386, and assessing any potential drug-drug interactions. The company is currently dosing patients in the 800 mg cohorts using a 400 mg twice daily (BID) dosing schedule to enhance drug exposures and has also filed an amendment to the clinical trial protocol to focus monotherapy on earlier stage patients that are less heavily pre-treated (no more than three prior systemic therapies for mCRPC). We anticipate a clinical readout during the first half of 2022.
The company recently provided an update on Patient 01-002, who was initially enrolled into the 200 mg dosing cohort of the Phase 1 trial. He achieved a PSA50 response along with stable disease at 12 weeks by radiologic assessment. This patient then achieved a deeper response (PSA80) and has been dose escalated several times. The patient remains on therapy as of December 31, 2021. The following chart shows the history of their PSA response during their various treatments and the continued decrease in PSA during treatment with EPI-7386.
In October 2021, ESSA announced a collaboration with Caris Life Sciences in which patient blood samples will be evaluated using Caris' Whole Transcriptome Sequencing (WTS) and Whole Exome Sequencing (WES) platform in order to better characterize the tumor biological profiles of patients in the ongoing monotherapy trial. This information may help to identify relevant subpopulations in the study and possibly expedite development of EPI-7386.
Financial Update
On February 3, 2022, ESSA announced financial results for the first quarter of fiscal year 2022 that ended December 31, 2021. For the first quarter of fiscal year 2022, the company reported a net loss of $9.1 million, or $0.21 per share, compared to a net loss of $6.5 million, or $0.20 per share, for the first quarter of fiscal year 2021. R&D expenses for the first quarter of fiscal year 2022 were $6.0 million compared to $4.5 million for the first quarter of fiscal year 2021. The increase was primarily due to clinical data analysis associated with the Phase 1a clinical trial, increased expenses related to intellectual property and salaries, and non-cash share-based payments. G&A expenses for the first quarter of fiscal year 2022 were $3.1 million compared to $2.2 million for the first quarter of fiscal year 2021. The increase was primarily due to increased professional fees, higher salaries and benefits, and non-cash share-based payments.
As of December 31, 2021, ESSA had approximately $189.2 million in cash, cash equivalents, and short-term investments. As of February 3, 2022, the company had approximately 44.0 million shares outstanding and, when factoring in stock options and warrants, a fully diluted share count of approximately 54.0 million.
Conclusion
We continue to think there is significant upside possible for investors at the company's current share price, which has yet to recover from the sell-off following the clinical timing update in August 2021. We eagerly await the next clinical update for the Phase 1 monotherapy trial in the first half of 2022 as well as expected updates from the recently initiated combination trial between EPI-7386 and enzalutamide in the second half of 2022. We have advanced our DCF model ahead by one year, which has caused a slight increase in our valuation to $42 per share.
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