Healthcare Pulse – Week of January 29th (EW, ISRG, PTGX, TVTX)
Overview: Edwards Lifesciences (EW), Intuitive Surgical (ISRG), Protagonist Therapeutics (PTGX), Travere Therapeutics (TVTX)
Edwards Lifesciences (EW) – On January 31st, Boston Scientific (BSX) announced on its earnings call that they no longer anticipate U.S. approval of ACURATE in 2H24E following a planned interim review of the IDE trial and awaits full results (Year End 2024E) to “determine a path forward.” The company also announced they were suspending enrollment in the single-arm continued access study, while continuing to enroll in the randomized extended durability cohort.
Baird analyst David Rescott would say that BSX’s announced setback to its U.S. TAVR program pushes out — and somewhat alleviates — a structural overhang for EW and the stock’s +6% gain today vs. the S&P. “It’s still unclear what will happen to BSX’s US TAVR program, but with US approval pushed to 2H25E at least (vs. 2H24E prior), concerns around competitive threats should move to the rearview — at least for the next 12 months. From a volume perspective, we already were modeling BSX’s TAVR launch eroding EW’s US market share (achieving a LSD percentage by 2028E), thus the delay could present incremental upside for EW. On pricing, we weren’t anticipating any headwinds; therefore, rather see the delay pushing out the more bearish view that a “fourth competitor” will drive significant (MSD-HSD) pricing headwinds in the US. Should BSX ultimately decide to abandon its US market entrance, this should further de-risk potential near-to-intermediate pricing concerns.”
Intuitive Surgical (ISRG) – Intuitive Surgical’s earnings report provided investors with a lot of new information: A new multi-port system, considerations ahead of a launch, CE Mark for Sp, and Ion supply dynamics. One of the first questions BTIG asked themselves following the da Vince 5 launch was: How have ISRG shares traded into and out of a new product cycle announcement? Of particular interest is how do shares trade after the product is announced? Analyst Ryan Zimmerman would say:
“Quantitatively, ISRG shares have averaged a ~28% total return 6 months prior and 6 months after a new system announcement (going back to the S announcement in 2006). We note that there has been wide variation in share return with shares declining ~58% into the Si announcement (in 2009) but then rallying ~167% for the next 6 months after the Si announcement. While not statistically significant we note that shares on average returned ~22.1% into an announcement (inclusive of the dV5 announcement) over a 6-month period prior, ~44.1% 6 months following the announcement of a next generation system, and 28% collectively for the entire year around identified announcements. History would suggest that investors want to own ISRG shares following a new system announcement.”
Protagonist Therapeutics (PTGX) – On January 31st, Protagonist Therapeutics and Takeda Pharmaceutical (TAK) announced the signing of a worldwide license and collaboration agreement for the development and commercialization of rusfertide, an investigational injectable hepcidin mimetic peptide of the natural hormone hepcidin, currently in a pivotal Phase 3 trial, VERIFY, for the treatment of Polycythemia Vera, or PV. PV is a rare chronic blood disorder characterized by excessive production of red blood cells that affects as many as 160,000 patients in the U.S., with a similar prevalence in Europe].
With its second significant strategic partnership with a major drugmaker, H.C. Wainwright believes that Protagonist once again showed how its drug discovery and development platform for peptide drugs could create significant shareholder value. Under the agreement with Takeda, Protagonist will receive a $300M upfront payment. The two companies will co-develop and commercialize rusfertide and equally share (50% and 50%) operating profits and losses in the U.S. and Protagonist is eligible for up to $330M in development and commercial milestones. Takada will solely develop and commercialize rusfertide for all other countries and will pay Protagonist royalties up to 14-29% on worldwide net sales. In addition, the Protagonist also has the option of exercising ‘opt-out rights’ during the 90-day period beginning 120 days after NDA filing, which would trigger additional upfront payments and milestones (up to $1.7B in total).
The Takeda partnership on rusftertide joins Protagonist’s partnership with Janssen for the development of oral IL-23 peptides. The Janssen partnership was first signed in 2017 and is now maturing with the lead asset, JNJ-2113, having just started Phase 3 testing. Recall Protagonist remains eligible for up to an additional $795M in development and sales milestone payments as well as tiered royalties for JNJ-2113.
Travere Therapeutics (TVTX) – Nearly a year ago on February 17th, Travere Therapeutics announced that the FDA granted accelerated approval to FILSPARI to reduce proteinuria in adults with primary IgAN at risk of rapid disease progression. This past week, Evercore ISI analyst Liisa Bayko released her 2024 FILSPARI doc survey where she said, “And I gotta say, it’s HOT!”
She surveyed 26 U.S. nephrologists with at least 10 IgAN patients. The survey only included those nephrologists who are at least familiar with Filspari and its use in IgAN as they are trying to assess the early experience. This likely biases the survey towards users rather than non-users of Filspari and something to consider when interpreting the results.
• Nephrologists surveyed have an average of 38 IgAN patients (median 26 patients), 1/3 of whom are eligible for Filspari based on proteinuria level.
• About 3/4 of responders have Rx’s Filspari and 2/3 of those report a positive experience with the drug.
• 13% of eligible IgAN patients under the care of the respondents are currently on Filspari with insurance coverage with ~8% in the wings waiting for insurance coverage. Discontinuations are ~5% of total starts.
• Significant growth in is expected from the surveyed nephrologist with 100% growth in 2024 and 75% in 2025.
