Arrowhead Pharmaceuticals Stock: Olpasiran’s Impressive Phase 2 Data (ARWR)

Arrowhead Pharmaceuticals’ (NASDAQ:ARWR) partner Amgen (AMGN) reported phase 2 results of olpasiran in patients with elevated lipoprotein[a], or Lp[a]. The results were excellent, but also not surprising considering the previous and robust phase 1 results. In the phase 2 trial, olpasiran was safe and well-tolerated, and it delivered significant Lp[a] reductions. We still have to wait at least five years to see the phase 3 data that will show whether these significant reductions in Lp[a] lead to a reduction in atherosclerotic cardiovascular disease (‘ASCVD’), but if the clinical data confirm the genetic data, olpasiran is likely to be the product that reaps most of the benefits.

Amgen gets most of the economics, but olpasiran is still a potentially valuable asset for Arrowhead, as it stands to collect several hundred million in milestone payments and up to low double-digit royalties on net sales.

Lp[a] is a genetically validated target

After decades of heavy focus on LDL-C (bad cholesterol) and failures of trials focused on other biomarkers of cardiovascular disease, the birth of RNA interference platforms and increasing availability of genetic data could finally lead to new targets that could provide additional cardiovascular protection beyond bad cholesterol.

Arrowhead has a cardiometabolic pipeline with two wholly-owned candidates that could address risk factors beyond LDL-C and those are ANGPTL3 and APOC3 with ARO-ANG3 and ARO-APOC3, respectively, and the company reported data this week that look largely consistent to previously reported data, but the focus of this article is olpasiran and Lp[a].

Lp[a] is a genetically validated target – a recent analysis from the UK Biobank with a diverse sample of 460,000 individuals showed that the risk of atherosclerotic cardiovascular disease (‘ASCVD’) associated with Lp[a] levels was log-linear for levels above the median, with increasing risk for higher Lp[a] levels. The standardized risk for ASCVD was “11% higher for each increment of 50 nmol/L, independent of adjustment for traditional risk factors, and with similar effect estimates in all race and ethnicity groups.”

And while this sounds promising for Lp[a] as a therapeutic target, it is not a certainty that risk reduction will be achieved pharmacologically with drugs like olpasiran. That is why Amgen is conducting clinical trials. The level required to lower ASCVD risk is still under debate and the current target is to achieve Lp[a] concentration of less than 125nmol per liter – this was one of the endpoints in the phase 2 trial.

I should also mention that Lp[a] levels are largely determined by genetic factors and that there is minimal influence from dietary or other behavioral factors.

Olpasiran’s phase 2 results look impressive

Amgen evaluated four different dose regimens of olpasiran against placebo: 10mg every 12 weeks, 75mg every 12 weeks, 225mg every 12 weeks, and 225mg every 24 weeks. There were 54 patients in the placebo group and a similar number in the other four treatment groups.

The primary endpoint was the mean placebo-adjusted percent change in the Lp[a] concentration in the modified intent-to-treat population from baseline to week 36. The secondary endpoints were the percent change from baseline in Lp[a] at week 48, the percent change from baseline in LDL-C at weeks 36 and 48, and the percent change from baseline in the apolipoprotein B (‘ApoB’) concentration at week 36 and 48. There was also a pre-specified exploratory endpoint of the percentage of patients with Lp[a] concentration of less than 125nmol per liter at week 36.

With the caveats from the previous section of the article in mind, olpasiran’s phase 2 results are as good as they can get.

The median Lp[a] concentration at baseline was 260.3 nmol per liter and the administration of olpasiran led to a 70.5% to 101.1% placebo-adjusted reduction in Lp[a] concentration from baseline. Specifically, the Lp[a] concentration increased by 3.6% in the placebo group, and it decreased 66.9%, 93.8%, 97.5%, and 96.9% in olpasiran dose groups of 10mg, 75mg, 225mg every 12 weeks, and 225mg every 24 weeks, respectively.

Olpasiran also achieved placebo-adjusted reductions of LDL-C in the mid-20s and of ApoB in the mid/high-teens. You can see all the absolute and placebo-adjusted effects in the table below.

And olpasiran achieved the results with remarkable consistency. 66.7% of patients in the 10mg dose group achieved Lp[a] concentration below 125nmol per liter, and while this is also a strong result, the 10mg dose level is not as effective as the other three dose regimens. 100% of patients in the other three dose groups managed to achieve Lp[a] concentration below 125nmol per liter. No patient in the placebo group had Lp[a] concentration below that level.

The remarkable efficacy was achieved with very good safety and tolerability. Serious adverse events were more frequent in the placebo group (15% versus 7% overall for olpasiran), and injection site reactions were the most frequent adverse event for patients receiving olpasiran.

And while I would not put too much emphasis on this data point, there is a small indication of olpasiran’s benefit in terms of adjudicated cardiovascular events – 6% of patients in the placebo group had an adjudicated cardiovascular event, and 1% of olpasiran patients. But the absolute numbers are quite low – three in the placebo group and two in olpasiran’s four groups (combined). The percentage difference is larger due to four-to-one randomization in favor of olpasiran.

There were no deaths in olpasiran treatment arms, and there was one death from non-cardiovascular causes in the placebo arm.

It is really hard to find a fault in this dataset and if there is a drug that could confirm the genetic data and clearly show the clinical benefit of Lp[a] reduction, it should be olpasiran.

Addressable market and competition

The addressable market for olpasiran is substantial. It is estimated that 10% and 30% of the global population has elevated Lp[a]. That is more than 200 million people in key markets of North America and Europe, where the estimated prevalence is 20%. This is a huge market, and olpasiran could clearly become a multi-billion blockbuster, but the market will take time and significant effort to develop.

The success of olpasiran would also depend on clinical data. For example, a 10% or lower reduction in the ASCVD risk is unlikely to drive very significant annual sales, but a 15-25% reduction would translate to a substantial advancement in the field and olpasiran could become the next Lipitor. A 20% to 25% reduction in ASCVD risk with statins was sufficient to create one of the most broadly used classes of drugs in the world.

Now, I am sure olpasiran will not be alone in Lp[a]-lowering class as Ionis (IONS) and its partner Novartis (NVS) are developing pelacarsen (an antisense oligonucleotide) to lower Lp[a] and so is Silence Therapeutics (SLN) with its own small interfering RNA candidate SLN360, but the market is large enough to support multiple players.

SLN360 is a few years behind and needs to find a big pharma partner as the cost of a broad development program is too high for it to handle on its own, and I would consider this candidate a more serious threat than pelacarsen because SLN360’s phase 1 results look similar to olpasiran’s.

I consider pelacarsen to be less of a threat. It will have a place in the market, but it is less convenient than olpasiran as it is administered every four weeks, and the maximum Lp[a] reduction it achieved with four-week administration dose regimens in the phase 2 trial was 72%. The once-weekly 20mg dose did achieve an 80% reduction, but this is still below what olpasiran can do and is far less convenient, and this dose regimen has not proceeded to the pivotal trial.

Pelacarsen is the first product candidate that could clinically validate the Lp[a] hypothesis. Novartis has completed enrollment in the HORIZON phase 3 outcomes trial and topline results are expected in 2025. The efficacy of pelacarsen is more than sufficient to validate the hypothesis, and absent surprising and unexpected safety issues, it should offer good read-through for olpasiran. And, if successful, the early commercial success of pelacarsen should provide commercial validation for this target. But that brings me back to the required treatment benefit, as I doubt a modest ASCVD risk reduction (10% or less) will result in significant annual sales for this class.

Conclusion

Olpasiran’s phase 2 results are impressive. There was nothing I did not like in the phase 2 data that were published by Amgen in the New England Journal of Medicine and if Lp[a] gets clinical validation in 2025 when Novartis reports phase 3 topline data from the HORIZON trial, it would offer good read-through to olpasiran which I believe has the potential to be the best treatment option for patients with elevated Lp[a] due to a more robust treatment effect and better convenience.

Arrowhead has limited risk with olpasiran since Amgen is funding the development and will be in charge of commercialization, but the upside potential is still significant despite Amgen taking most of the economics. Arrowhead is entitled to receive up to $400 million in additional milestone payments and up to low double-digit royalties on net sales. If there is a substantial treatment benefit, annual sales could exceed $5 billion, and Arrowhead would receive up to $600 million in annual royalties on net sales.

But it will take a few years to see real value creation with olpasiran. The first catalyst is pelacarsen’s HORIZON phase 3 results in 2025, and we probably have to wait until 2027 to see the phase 3 results of olpasiran. The good thing is that Arrowhead has a broad pipeline, and there are many other candidates that could drive the company’s valuation higher in the following quarters and years.