Nov 142017
 

Myovant Sciences Ltd. (MYOV:NYSE) is an emerging biotech leader focused on developing and commercializing innovative therapies for women’s health and endocrine diseases. Its lead drug development candidate, Relugolix, is an oral gonadotropin-releasing hormone (GnRH) receptor antagonist that rapidly lowers estrogen and progesterone in women and testosterone levels in men when administered once daily.

In our view, the drug candidate has the potential to be a best-in-class molecule with superior efficacy, an improved safety profile and more convenient oral dosing options. The compound is currently being tested in three Phase 3 trials, two in woman’s health and one in prostate cancer. One of the company’s key strengths is its experienced leadership team, highlighted by the demonstrated success of its CEO, Dr. Lynn Seely. Dr. Seely was Chief Medical Officer at Medivation from 2005-2015 and led the development of XTANDI. Adding to her stellar resume, she is board certified in internal medicine and endocrinology and metabolism, and completed a clinical fellowship in endocrinology and metabolism at UC San Diego. In addition to Dr. Seely, the team includes Bryan Selby who spent nearly a decade at Medivation, most recently as SVP, Product Strategy, and Dr. Laura Williams, M.D., MPH who spent 18 years at Abbott/AbbVie and served as R&D Group Project Leader in Women’s Health.

In our view, MYOV has an excellent combination of an attractive Phase 3 asset and an experienced management team assembled to maximize shareholder value through astute drug development. We are initiating coverage of MYOV as a BUY under 17 with a target price of 25.

About Relugolix

Relugolix is an oral, once-daily, small molecule GnRH receptor antagonist that has been evaluated in ~1,600 patients. In these trials, relugolix has been shown to be generally well-tolerated and to suppress estrogen and progesterone levels in women and testosterone levels in men. Common side effects are consistent with suppression of these hormones. In the ongoing Phase 3 SPIRIT clinical trials—SPIRIT 1 and SPIRIT 2 in women with endometriosis-associated pain—and the ongoing Phase 3 LIBERTY clinical trials—LIBERTY 1 and LIBERTY 2 in women with heavy menstrual bleeding associated with uterine fibroids—relugolix will be evaluated with and without low-dose hormonal add-back therapy, the addition of which is expected to decrease potential side effects such as bone mineral density loss and hot flashes. The ongoing Phase 3 HERO study is evaluating relugolix in men with advanced prostate cancer.

Competition

MYOV is likely to be the second GnRH antagonist on the market in what is an estimated $4+ billion market opportunity. AbbVie’s/Neurocrine’s Elagolix is in the lead and is expected to be approved by year-end/early 2018. In our view, there is room for another GnRH antagonist on the market to treat endometriosis/uterine fibroids, and by launching a few years later, MYOV could capitalize on AbbVie’s efforts to educate the market. To counter act the bone loss seen with relugolix/Elagolix, MYOV has coformulated its drug with estradiol/norethindrone acetate addback (about 1/5 of a contraception dose). In addition to differences on bone mineral density and use of add-back therapy, relugolix has a significantly better half-life versus elagolix (37-42 hours versus 2–6 hours, respectively). The longer half-life and better specificity support once-daily dosing for relugolix and a lower dose than elagolix (40mgs daily vs. 150-600mgs daily). MYOV believes that ability to dose once daily in both indications, as well as use of a fixed dose combination (versus elagolix, which could require separate add-back in certain indications), should provide an advantage over elagolix in both efficacy, safety and convenience.

Endometriosis and Uterine Fibroids Background

Endometriosis and uterine fibroids are benign gynecologic disorders involving aberrant depositing of endometrial tissue outside of the uterus (endometriosis) or growth of muscle/connective tissue on the uterine wall (uterine fibroids). Both conditions are hormone sensitive, meaning each is responsive to the signals accompanying each menstrual cycle, setting off a cascade of events, including release of prostaglandins and promotion of inflammation. Though there is wide overlap of symptoms, endometriosis is associated more with chronic pelvic pain, often heightened during menstruation (dysmenorrhea) or sexual intercourse (dyspareunia), while abnormal bleeding is a hallmark of uterine fibroids.