Beigene Ltd (ADR) (BGNE): Here’s Our Take

Beigene Ltd (ADR) (NASDAQ:BGNE) had a pretty tough time throughout the latter half of November and early to mid December. The company fell from November highs just ahead of $37 a share to below $27 a share in December – a more than 27% discount in a matter of weeks.

Since the lows, however, Beigene has managed to pick up a bit of upside momentum, and has recovered the majority of the lost strength to the end of last week. During the first half of this week, and compounding the recent action, the company put out some news relating to one of its development assets, and has jumped a further 10% on the release.

A 10% gain on a release like this (it was the initiation of a trial, and we will get to it in a little more detail shortly) is pretty substantial. Double-digit gains are generally reserved for things like interim data or completion of enrollment in a tough target trial. So why has the company run like it has on this news?

Let’s take a look.

The drug in question is called BGB-3111 and it is targeting a condition called Waldenström’s Macroglobulinemia. We will forgive readers for not having come across this specific condition before, but chances are the same readers will be more than familiar with the overarching class of conditions under which it falls – non-Hodgkin lymphoma (NHL).

When a patient has non-Hodgkin lymphoma, the cancer infects lymphocytes, which are the main cells of lymphoid tissue, things like B cells and T cells. When a patient has multiple myeloma, instead of the cancer infecting lymphocytes, it infects plasma cells. That is the primary difference between the two types of cancer. In Waldenström’s Macroglobulinemia, however, the cancer affects a type of cell called lymphoplasmacytoid, which has features of both lymphocytes and plasma cells.

Lymphoplasmacytoids make large amounts of a certain type of antibody (immunoglobulin M, or IgM), which is known as a macroglobulin. Each antibody (protein) made by the WM cells is the same, so it is called a monoclonal protein, or just an M protein. When cancerous, the production of M protein goes into overdrive, and a buildup causes the symptoms that characterize the condition – excess bleeding, problems with vision, and nervous system problems. It also results in anemia in a large proportion of cases.

So that is the condition, what just happened with Beigene Ltd (ADR) (NASDAQ:BGNE)?

The company has just kicked off a phase 3 trial for the above-mentioned drug, 3111, with the goal being to build on already collected efficacy data and use the trial to underpin a new drug application (NDA) submission with the FDA on completion. While Waldenström’s Macroglobulinemia is a rare condition, there is currently no cure, or even a particularly effective treatment, so the market for the drug is large (especially given the hundreds of thousands of dollars’ biotech companies can command annually on these sorts of rare oncology treatments). That’s why the run is pretty substantial.

As per the trial design, the first cohort will enroll approximately 150 patients with MYD88 mutations, which are characteristic of WM and present in >90% of cases. These patients will be randomized in a 1:1 ratio to receive either BGB-3111 160 mg orally twice daily (BID) or ibrutinib 420 mg once daily (QD) until progression. The trial’s primary endpoint is combined rate of CRs and VGPRs. The second cohort will enroll patients that have what’s called a wild type MYD88 mutation, and run against what is essentially the same endpoint.

So what is next?

This is a global study, and it is investigating efficacy in a pretty rare cancer across a relatively large number of patients, meaning it could be a slow burner from an enrollment perspective. With that said, we expect a number of catalysts to hit press associated with this trial, and others, across the coming few quarters. Specifically, completion of enrollment on this one should give the company a boost, as will any interim report that hints at efficacy. Beyond that, Beigene Ltd (ADR) (NASDAQ:BGNE) has reported that it expects to initiate a number of other pivotal studies during 2017, both globally and in China, and if the action seen on the initiation of this Waldenström’s Macroglobulinemia trial is anything to go by, then there could be some upside momentum in these initiations near-term.

Note: This article is written by Mark Collins and originally published at Market Exclusive.