Provention Bio Inc (NASDAQ: PRVB) is a small cap clinical-stage biotech ($740M market cap) focused on the development of treatments for immunological diseases such as type 1 diabetes (T1D),and celiac disease. Since their IPO in July 2018, PRVB stock value has increased by over 640%. Currently trading at the low tens, data on a novel drug treatment for diabetes shows it could be a big winner for the New Jersey company and its investors.
Autoimmune diseases are on the rise in the US: over 15 million people in the US suffer from at least one condition affecting their immune system. One of these diseases is T1D, which results from the pancreas failing to produce the necessary amount of insulin for normal sugar regulation. Previously referred to as “insulin-dependent diabetes mellitus”, T1D is caused by loss of pancreatic beta cells due to an autoimmune response. The American Diabetes Association estimates that 40,000 patients are diagnosed with T1D each year in the US.
In genetically susceptible persons, T1D progresses through asymptomatic stages before the development of overt hyperglycemia. Before the onset of insulin dependence in T1D, disease management aims to delay the onset as well as stimulate insulin production by the patient. Teplizumab is a drug in the PRVB pipeline marketed for delay or prevention of insulin-dependent T1D.
Teplizumab could become a home-run for PRVB, and its investors
In a paper published last year in the New England Journal of Medicine, researchers at PRVB showed quite encouraging results for a Phase 2 randomized trial of Teplizumab. When compared to the control group, a single 14-day outpatient course of Teplizumab was able to delay the onset of insulin-dependence for an average of 2 years. Meaning that a patient recently diagnosed with T1D could double the amount of time left in the course of the disease until they completely stop producing any insulin, thus requiring daily administration of the hormone. Let’s remember that T1D results in lifetime use of insulin and other drugs as the disease progresses.
Interestingly, the trial data for Teplizumab, also shows the presence of “super-responders”. This group of patients, after a single course of the treatment, have seen a delay in insulin-dependence onset of up to 8 years (when the follow-up occurred).
Teplizumab, which should be approved by FDA beginning 2021, is currently in the step of completing BLA filing before Q4 2020 for at-risk patients. Their very promising results for Phase 2 allowed them to get designated as a breakthrough treatment by FDA, thus their decision to pursue approval. In parallel, Phase 3 trials are finishing recruitment as a treatment for newly diagnosed T1D patients. PRVB is also exploring the opportunities of authorization for use of Teplizumab as a topical drug, as well as its efficacy in treating psoriatic arthritis, and other autoimmune diseases.
Expected to launch mid 2021, Teplizumab could be the tipping point for PRVB. Having no approved products means PRVB is not generating any revenue. In fact their Q1 2020 results moved them to raise money by selling shares of its common stock. This “follow-on” brought in $100M in additional cash for Q2 2020 which should prevent any further dilutions soon.
Conclusion
PRVB has developed Teplizumab, a novel treatment for diabetes. Phase 2 trials show outstanding results and the possibility to address an unmet need within a growing market. The drug can be marketed more broadly in autoimmune disease care. If you’ve ever noticed how volatile the biotech market is, then this might be a good opportunity to jump in the action.
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