Crinetics: Late-Stage Acromegaly Disease Studies Will Be Inflection Point (NASDAQ:CRNX) – Seeking Alpha

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Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX) is a great speculative biotech play to look into. That's because it is expected that it will release results from two phase 3 studies under the PATHFNDR program in 2023. Both studies, known as PATHFNDR-1 and PATHFNDR-2, are using paltusotine for the treatment of patients with Acromegaly. One study is switching patients from injectable standard of care (SOC) treatments and the other is targeting untreated patients. Both of these randomized trials will be important, because they will be needed for the company to be able to file a New Drug Application (NDA) to the FDA for approval thereafter. A prior phase 2 study, known as ACROBAT, showed that patients were able to maintain hormone suppression even after switching from SOC injections to paltusotine.

Paltusotine is also being explored for use in treating patients with neuroendocrine tumors and carcinoid syndrome in phase 2 testing. Another important program would be the use of CRN04777 which was shown to be safe/tolerable in patients with congenital hyperinsulinism in a phase 1 study. Crinetics is in the process of initiating a phase 2 study using CRN04777 for this patient population in the 2nd half of 2022. With proof of concept established in phase 2 for paltusotine for Acromegaly, plus a major readout from a late-stage study for this program in 2023, these are the reasons why I believe this biotech is a great speculative biotech play to look into.

Paltusotine is being developed for the treatment of patients with Acromegaly. This is a differentiated treatment option for patients, because it is being developed as an oral treatment. Current standard of care (SOC) treatment options used are injections. Acromegaly is a type of hormonal disorder that occurs when your pituitary gland produces too much growth hormone during adulthood. What happens is that bones and other parts of the body become enlarged. The enlarged parts of the body that are possible for those who have Acromegaly are:

In Adulthood though, height is something that doesn't change for someone who has Acromegaly. It is a rare disorder in that there are fewer than 20,000 U.S. cases per year. The key is that these patients are able to bring growth hormone and IGF-1 levels to a normal level. If this can be accomplished only then can these patients have a normal life expectancy.

The thing is that this program has come a long way. Why is that? Well, that's because a phase 1 study using paltusotine was initiated back in 2018. Since then, it has really done well to advance the use of this drug for the treatment of patients with Acromegaly. After that, it has been able to advance two separate phase 2 studies recruiting patients with Acromegaly.

These two studies are the phase 2 ACROBAT Edge and ACROBAT Evolve studies. Any patient who finished either of these studies were then enrolled into the phase 2 Open-Label Extension (OLE) study known as ACROBAT Advance. The good thing here is that Crinetics released some positive long-term data from this particular OLE study back on November 8, 2021. It was shown that with a cut off date of August 31, 2021 41 patients had gone through and received paltusotine for a total of 51 weeks.

A really good thing about this study is that only 4 patients ended up discontinuing from the study. The main takeaway that you should know about this study is that patients taking paltusotine ended up achieving lower median serum insulin-like growth factor-1 ((IGF-1)) levels compared to the washout period. A washout period is where patients take no drug whatsoever. This signifies that the drug was able to do a good job at lowering IGF-1 levels. Not only that, but it was able to maintain such levels for an extended period of time similar to that which was achieved on prior SRL therapy for up to 51 weeks.

There are two important things to explain here. The first of which is that SRL therapy is a standard of care (SOC) treatment option for these patients with Acromegaly. SRL stands for somatostatin-receptor ligand and is responsible for slowing down the production of hormones, especially the growth hormone and serotonin. While it works well, there are a few issues with it. They are:

Secondly, the main problem with Acromegaly goes to what I stated above in the definition of it. That is, if a therapy can fully lower serum insulin-like growth factor-1 ((IGF-1)) levels to normal, then these patients can be treated properly. It's hard to say whether or not the drug will be successful, but it is important to note that about 41 out of 49 (84%) of the eligible patients decided to remain in the ACROBAT Advance study.

With achieving such great success in the IGF-1 biomarker data from several phase 2 studies with paltusotine in treating patients with Acromegaly, it has already been able to advance a phase 3 program known as PATHFNDR. It had dosed the first patient in the phase 3 PATHFNDR-1 in June of 2021. This late-stage study is expected to enroll up to a total of 52 patients with Acromegaly who are at the time of study entry biochemically controlled.

What does that mean? It means that these patients have insulin-like growth factor-1 ((IGF-1)) 1.0x upper limit of normal (ULN). They achieve this while on other standard of care (SOC) treatment options like octreotide or lanreotide (synthetic version of stomatostatin) depot monotherapy. Patients for this phase 3 PATHFNDR-1 study are randomized to receive 1:1 to receive once daily oral paltusotine or placebo for a total of 9 months. The main thing to note here is that these patients are switching off of SOC injection treatment over to paltusotine. The primary endpoint for the study is going to be the proportion of patients who will be biochemically controlled during at least weeks 32 to 36. The only major downside at the moment for this particular program is that results from this late-stage study with paltusotine are not expected to be released until 2023. There is also a second phase 3 randomized double-blind placebo-controlled study known as PATHFNDR-2. This study is similar to the other late-stage study, but instead is treating patents who have not been treated. In essence, there are two criteria for recruiting in this late-stage study. These two stipulations are:

The primary endpoint will be the average IGF-1 1.0x ULN at weeks 22 to 24. Again, this will be the use of paltusotine compared to placebo. This is another study, which is expected to have data released in 2023.

Hopefully paltusotine does well in these studies for Acromegaly. However, things are looking good in that Crinetics has already been able to establish a partnership with a Japanese pharmaceutical company by the name of Sanwa Kagaku Kenkyusho Co., Ltd. (Known as "Sanwa") for paltusotine. Crinetics received $13 million as an upfront payment and then also may be eligible to earn milestone payments relating to certain development, regulatory and commercial goals being met. If paltusotine achieves marketing approval in Japan, then it will also be able to receive tiered royalties on net product sales. Sanwa will have the right to develop and commercialize the drug for Acromegaly/neuroendocrine tumors in Japan. That's okay though, because it will be responsible for all costs of every single study done in Japan for it. This means that Crinetics won't have to worry about funding or spending money to run these studies in that specific territory. Not only that, but it still retains rights for paltusotine outside of Japan. What does this do? Well, it provides the ability for it to attempt to make another partnership for the drug in another territory besides Japan. If that doesn't happen, then it retains full rights for the drug in the rest of the territories.

According to the 10-Q SEC Filing, Crinetics Pharmaceuticals had cash, cash equivalents and investments of $319.7 million as of March 31, 2022. This is a lot of cash on hand, however, there is one important thing to consider here and that is that this amount does not include the most recent cash offering it had enacted in April of 2022. That is when it sold a total of 5,625,563 shares of its common stock at a price of $22.22 per share. It received roughly $125 million in gross proceeds from the common stock offering. It believes that it has enough cash on hand to fund its operations into the 2nd half of 2024. This means I don't anticipate another cash raise for quite some time. I believe that if it does enact another cash raise it will choose to do so by at least mid-2023 or thereafter. The only way it would want to raise earlier than expected is if market conditions worsen even further or it has a strategic transaction it wants to accomplish. Other than both of these situations, it won't need to raise cash for quite some time.

There are a few risks that investors should be aware of before investing in Crinetics Pharmaceuticals. The first risk involves the PATHFNDR program itself. While it achieved success with the primary endpoint using paltusotine in Acromegaly in a prior phase 2 study, there is no guarantee that the same will be done in either one of the two ongoing PATHFNDR studies. Results from either one of these studies won't be known until 2023.

The second risk involves the use of CRN04777 for congenital hyperinsulinism. A phase 1 study completed the safety portion and was shown to be tolerable. There was also some proof of concept evidence of being able to achieve dose-dependent suppression of glucose or sulfonylurea-induced insulin secretion as well. The next step is for the biotech to speak to regulators and initiate a phase 2 study using CRN04777 for congenital hyperinsulinism to confirm efficacy. This mid-stage study is expected to start in the 2nd half of 2022. One caveat from its main program is that paltusotine is also being developed to treat patients with neuroendocrine tumors as well in a phase 2 study. This provides another shot on goal, just in case the drug doesn't succeed in the two ongoing PATHFINDR studies for Acromegaly.

The final conclusion is that Crinetics Pharmaceuticals is a great speculative biotech play to look into. That's because it has already established proof of concept of being able to achieve normal hormone and IGF-1 levels in a phase 2 study. The two ongoing PATHFNDR studies using paltusotine for patients with Acromegaly may ultimately prove this finding.

At least the biotech has been advancing its pipeline providing additional shots on goal. Paltusotine is also being used to treat patients with neuroendocrine tumors as well. It has already done some leg work in showing that CRN04777 is safe and provides dose-dependent suppression of glucose or sulfonylurea-induced insulin secretion in a phase 1 study. A phase 2 study using this drug for the treatment of patients with congenital hyperinsulinism is expected to start in the 2nd half of 2022. It has even been able to spin out a company known as Radionetics oncology, which will be focused on advancing nonpeptide precision radiotherapeutics for the treatment of patients with cancer. This company was spun out from Crinetics nonpeptide platform.

Another drug in Crinetics pipeline is CRN04894, which is an ACTH antagonist. It is being developed to treat patients with Congenital adrenal hyperplasia and Cushing's Disease. Based on proof of concept established in phase 2 for paltusotine in Acromegaly, plus many other drugs being advanced in the pipeline for additional shots on goal, these are the reasons why I believe this is worth a look as a speculative biotech play. The two trial readouts from the phase 3 PATHFNDR studies provide major inflection points for Crinetics.

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Crinetics: Late-Stage Acromegaly Disease Studies Will Be Inflection Point (NASDAQ:CRNX) - Seeking Alpha