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Tuesday, August 16, 2016

RedHill Provides R&D Update, Highlights Three Phase 3 Programs and Catalyst-Rich Second Half

Last week, RedHill Biopharma Ltd. (NASDAQ: RDHL) provided an update on select R&D programs and potential milestones over the next year. The update highlights what I believe is one of the deepest and most interesting pipelines in specialty pharma. RedHill is focused on the development and commercialization of late clinical-stage, proprietary, orally-administered, small molecule drugs for the treatment of gastrointestinal and inflammatory diseases, including cancer.

The company is pursuing a multiple-shots-on-goal strategy and has three potential blockbuster drugs in Phase 3 clinical trials. The pipeline chart (shown below) shows the depth of the company's development plans. Almost all of the key assets are unpartnered, which provides the potential for investors to see substantial returns on out-licensing, M&A, or commercialization. And importantly, the company is well-capitalized, with an estimated $47.7 million in cash on hand as of June 30, 2016. Below is a quick review of the key R&D programs and why I believe that investors should take a hard look at this unique opportunity.

The Pipeline

RedHill's pipeline rivals that of larger biotech and specialty pharmaceutical companies. The company boasts twelve programs and eight drugs at various stages of clinical development, several of which are in Phase 3. The core focus is on gastrointestinal and inflammatory diseases, but management is making a strong push into cancer with some novel drugs in mid-stage trials.

- RHB-104

RHB-104 is a proprietary and potentially groundbreaking oral antibiotic combination therapy with potent intracellular, anti-mycobacterial, and anti-inflammatory properties, currently undergoing a first Phase 3 study for Crohn’s disease and a Phase 2a study for multiple sclerosis. The development of RHB-104 is based on increasing evidence supporting the hypothesis that Crohn’s disease is caused by Mycobacterium avium paratuberculosis (MAP) infection in susceptible patients.

The Phase 3 MAP U.S. Study continues to enroll patients. According to management, approximately 200 subjects out of the planned total of 270 have been enrolled to date in the randomized, double-blind, placebo-controlled design. An interim data and safety monitoring board (DSMB) analysis is on track to take place in the fourth quarter of 2016. RedHill remains blinded to the interim and ongoing results. Management expects to provide an update on this in the coming weeks.

The primary endpoint of the MAP U.S. Study is remission at week 26 compared to placebo. RedHill is currently reviewing a possible amendment to the study protocol intended to enhance further the overall robustness of the study, provide a more precise assessment of RHB-104’s treatment effect, collect additional endoscopic mucosal healing data, further evaluate the Crohn’s disease population enrolled, and address retention and early terminations. Completion of recruitment is expected in 2017. 

I think RHB-104 has the potential to be a game-changer for the treatment of Crohn's disease. The drug has a novel mechanism of action with clear proof-of-concept and excellent safety and tolerability demonstrated in earlier clinical studies. 

See my detailed review of the science and market potential for RHB-104  >> RHB-104 CD Article

Beyond Crohn's, RedHill is also studying RHB-104 in relapsing and remitting multiple sclerosis. The company reported positive interim data from a Phase 2a study in March 2016. The last patient visit was recently announced, and top-line data are expected in the fourth quarter 2016. Similar to drugs like Remicade®, Humira®, Tysabri®, and Entyvio®, RedHill is hoping that RHB-104 can be a "pipeline in a product" with utility in multiple inflammatory indications.

See my article highlighting the positive interim data with RHB-104 in RRMS >> RHB-104 MS Article

- RHB-105

RHB-105 is a proprietary oral triple-antibiotic for the treatment of H. pylori infection. In June 2015, RedHill successfully completed a Phase 3 clinical trial with RHB-105 called ERADICATE-Hp. ERADICATE-Hp was a randomized, double-blind, placebo-controlled study in 118 patients that took place at 13 centers in the U.S. Top-line results demonstrated RHB-105 was 89.4% effective in eradicating H. pylori infection. This was highly statistically superior over the placebo and the 70% benchmark use for statistical modeling (p <0.001). More importantly, following the 14 day treatment period, patients on placebo were allowed to receive a current standard of care. Follow-up analysis from this portion of the study showed these patients achieved only 63% eradication.

Following the success first Phase 3 trial, RedHill met with the U.S. FDA in April 2016 to discuss the protocol and endpoints for a confirmatory Phase 3 trial to start in the next few months. The trial will be a two-arm, randomized, double-blind, active comparator confirmatory Phase 3 study with a target enrollment of 440 patients in up to 50 clinical sites in the U.S. Positive data from this study will support the filing of a New Drug Application, and I believe once approved RHB-105 will become the new standard-of-care.

See my article looking at RHB-105 from the medical market perspective >> RHB-105 HP(1) Article


In early 2017, RedHill expects to report data from an ongoing Phase 3 clinical trial examining Bekinda, an improved formulation of ondansetron, for the treatment of acute gastroenteritis and gastritis - known as the GUARD Study. GUARD is randomized, placebo-controlled, registration study designed to compare Bekinda to placebo in 320 patients age 12 to 85 years old with acute gastroenteritis or gastritis that have presented to an emergency center and have vomited at least twice in the four hours preceding consent into the study. The primary endpoint is the proportion of patients without vomiting and rescue medication from 30 minutes post dose over the subsequent 24 hours. If all goes well with GUARD, management may be in a position to file the NDA in 2017.

Beyond the Phase 3 study in gastroenteritis and gastritis, RedHill is also studying Bekinda in a Phase 2 trial for the treatment of diarrhea-predominant irritable bowel syndrome (IBS-D). The first patient in this trial was dosed in June 2016. The Phase 2 study is seeking to enroll 120 patients with IBS-D at 12 clinical sites in the U.S. Top-line results are expected around the middle of 2017.

See my article talking about Bekinda and the market opportunity >> Bekinda-GE Article


One of the most interesting candidates in RedHill's pipeline is Yeliva, a first-in-class SK2 selective inhibitor for the treatment of various cancers. The ongoing clinical work supported by research grants for Yeliva is impressive. For example, a planned Phase 1/2 study for the treatment of refractory or relapsed multiple myeloma at Duke University is supported in part by a $2 million grant from the National Cancer Institute (NCI). A separate grant from the NCI also supports another Phase 1/2 clinical study evaluating the drug in patients with refractory/relapsed diffuse large B-cell lymphoma (DLBCL) at the Louisiana State University. That study is currently on administrative hold, pending a protocol amendment aimed at improving overall recruitment prospects. 

A Phase 2 study with Yeliva for the treatment of advanced hepatocellular carcinoma (HCC) is planned for later this year. The study will be conducted at the Medical University of South Carolina (MUSC) Hollings Cancer Center and additional clinical centers in the U.S. It is supported in part by a $1.8 million grant from the NCI awarded to MUSC, along with additional support from RedHill to fund a broad range of studies on the feasibility of targeting sphingolipid metabolism for the treatment of a variety of solid tumor cancers. In June 2016, RedHill reported positive Phase 1 data with Yeliva in cancer patients with advanced solid tumors.

See my article highlighting the potential partnering options for RedHill with Yeliva >> Yeliva-Overview Article.

- Mesupron

Mesupron is another mid-stage drug with the potential to expand the company's focus into oncology. RedHill’s current development program for Mesupron includes non-clinical studies as well as re-analysis of certain prior clinical data. Mesupron is a first-in-class, orally-administered uPA inhibitor targeting gastrointestinal and other solid tumors. To date, a total of eight Phase 1 and two Phase 2 clinical studies have been completed with the drug. The ongoing nonclinical work is intended to define better the molecular markers and patient population for future clinical studies. RedHill plans to initiate a Phase 2 development program with Mesupron in 2017, subject to a successful outcome in the ongoing non-clinical studies.

See my article providing an overview of Mesupron >> Mesupron-Overview Article

- Other Key Programs

RedHill seems particularly excited about the signing of a recent research collaboration with the U.S. National Institute of Allergy and Infectious Disease (NIAID) in July 2016. The collaboration is intended to evaluate RedHill’s proprietary experimental therapy for the treatment of Ebola virus disease. Initiation of research programs is expected to commence in the fourth quarter of 2016. The company has shared encouraging results from preliminary non-clinical studies conducted in conjunction with NIAID. Top-line results from the first studies are expected in 2017.

Management is also planning a resubmission of the RIZAPORT® NDA to the U.S. FDA in the first half of 2017. RIZAPORT was approved for marketing in Germany under the European Decentralized Procedure (DCP) in October 2015, and a first commercialization agreement was recently signed with Grupo JUSTE S.A.Q.F for Spain and additional potential territories. The company is in discussion with additional potential commercialization partners for RIZAPORT in the U.S., Europe, and other territories. The drug is a proprietary oral fast dissolving thin film formulation of rizatriptan for the treatment of a migraine.

The Financial Position

On July 26, 2016, RedHill reported financial results for the second quarter ending June 30, 2016. Importantly, the company remains debt free and the cash balance is a healthy $47.7 million. Cash consumption during the first six months of 2016 totaled $10.6 million. As such, I see the current cash position as sufficient to fund operations for the next 2+ years. Importantly, institutional and insider ownership of RedHill remains solid. According to Yahoo-Finance, institutional owners such as Broadfin, Orbimed, Menora, Sabby, Candriam, RBC, and Alger continue to be shareholders.


RedHill's Semi-annual R&D update is a good read for those following the company or just getting to know the name. I encourage investors wishing to delve deeper into the story to click the links to my longer pieces of work on each specific product. Another good read is my interview with the CEO, Dror Ben-Asher, back in May 2016. Finally, the company has one of the most comprehensive investor presentations in specialty pharma. You can tell that management has spent a lot of time detailing each asset and putting together a presentation that aims to communicate and educate investors on the company.

RedHill remains a very interesting company with several upcoming potential milestones over the next few quarters (see below). This presents the opportunity for upside in the stock as RedHill seems to have all of the key attributes I look for in a good long-term investment.


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  1. In the Table " Selected Upcoming Potential Milestones" you left out the expected topline data for the Phase 2a trial of RHB-104 in multiple sclerosis.


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