Many, but not all, autoimmune diseases are caused by the presence of antibodies against certain cells and tissues (“auto-antibodies”). These auto-antibodies bind to their targets and solicit the immune system to attack the cells and tissues to which they are bound.
A significant portion of auto-antibody-mediated autoimmune diseases are caused by immunoglobulin-G (aka IgG) auto-antibodies. Historical strategies to treat autoimmune diseases caused by IgG’s have focused on the use of chronic steroids to mute the immune system, however steroids are associated with a high side-effect burden. Another strategy that is effective, but inconvenient is called plasmapheresis. Plasmapheresis is a semi-invasive procedure in which IgG’s are externally filtered from the bloodstream.
We and others have hypothesized that inhibition of FcRn (aka neonatal Fc receptor) might be effective in depleting IgG auto-antibodies, and in doing so, might also ameliorate IgG-mediated auto-immune disease (see Exhibit A).
Exhibit A: How Targeting FcRn Depletes Autoantibodies
Sources: Driehaus. Graphic sourced from Chadha, “Monoclonal Antibody Pharmacokinetics in Type 2 Diabetes Mellitus and Diabetic Nephropathy,” (2016) Molecular Drug Disposition.
On May 26, 2020, the first definitive results were released that confirm our hypothesis. Phase 3 results were released from a randomized, controlled study evaluating the effect of FcRn inhibition versus placebo in patients with myasthenia gravis, a disease characterized by auto-antibodies that destroy neuro-muscular signaling. The results confirmed what we had previously believed: that FcRn inhibition would safely deplete IgG antibodies and lead to amelioration of disease.
Although substantial evidence already existed supporting the safety and effectiveness of FcRn inhibition, this first ever positive, phase 3 result for an FcRn inhibitor paves the way for what we expect to be a string of favorable, mid-to-late stage studies that support numerous approvals for the FcRn inhibitor class over the coming years.
There are three stand-alone companies that have leading FcRn inhibitors, and their aggregate market value is approximately $15B. The markets to be addressed by the FcRn class are numerous, and we expect the aggregate addressable market by the class to be VERY large (>$10Bn; see Exhibit B below). We have our opinions on which companies are positioned best for various scenarios, and we have expectations for how other treatment modalities will impact uptake of the FcRn class, but ultimately we think all three will work and become real drugs. In this context, we think there remains meaningful value to be unlocked as these molecules progress through clinical development and ultimately get to market.
Exhibit B: FcRn Inhibitors – Potential Addressable US Market
Sources: Driehaus. Figures sourced from Yaron Werber (Cowen) Argenx Initiation Report, Sam Slutzy (LifeSci Advisors) Immunovant Initiation Report, Graig Suvannavejh (Goldman Sachs) Momenta Initiation Report.
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