NewAmsterdam Pharma: Exciting Cardiovascular Drug Targeting The Market

Update: New data from the ROSE2 adds to our optimism

NewAmsterdam Pharma (NASDAQ:NAMS) recently unveiled highly promising Phase IIb clinical trial results for obicetrapib, in a Japanese dyslipidemia study. We believe the trial had a robust trial design in place - a double-blind, randomized, placebo-controlled, dose-finding study - the effectiveness, safety, and tolerability of obicetrapib were meticulously evaluated across a pool of 102 adult patients over 56 days. To add more color to the study design, the three dosage levels (2.5mg, 5mg, 10mg) of obicetrapib were tested, and the findings were substantially compelling. Firstly, the participants administered with obicetrapib experienced median LDL-C (low-density lipoprotein cholesterol) reductions of 24.8%, 31.9%, and 45.8% for the 2.5mg, 5mg, and 10mg doses, respectively, compared to a negligible reduction of 0.9% in the placebo group. We note LDL-C is an approvable primary endpoint that FDA has approved various candidates, including the PCSK9 class.

Moreover, the highest obicetrapib dosage (10mg) achieved a 29.7% median reduction in Apolipoprotein B (Apo B) and a 37% reduction in non-HDL-C (non-high-density lipoprotein cholesterol), with these figures significantly surpassing the placebo group. We highlight that the extremely low p-values (<0.0001) for all endpoints corroborate the statistical significance of these results.

Importantly, Obicetrapib was also well-tolerated at all dosage levels, with a safety profile on par with the placebo, which positions the drug well as an add-on therapy to the current standard of care statins.

Looking at an investment angle, we believe NewAmsterdam's obicetrapib offers substantial upside potential for several reasons:

1. Positive Clinical Profile: Obicetrapib has consistently demonstrated statistically significant LDL-C reductions in multiple trials, meeting the primary endpoints and showing a safety profile akin to a placebo. This robust efficacy makes it a potential game-changer in addressing the unmet need in patients with high-risk hypercholesterolemia and cardiovascular disease (CVD). Furthermore, we believe the relationship between LDL-c and MACE (cardiovascular outcomes studies) is well substantiated by previous evidence from Statins and PCSK9 class and we are not worried about the outcomes data suggesting a different picture.

2. Disease Prevalence & Market Opportunity: Dyslipidemia, and by extension, high-risk hypercholesterolemia and CVD, are pervasive conditions globally. By offering a solution to an unfulfilled need in this space, NewAmsterdam can tap into a vast market opportunity.

3. Robust Pipeline & Future Trials: The encouraging results from the Phase IIb trial, combined with the anticipation of data from the ongoing Phase III trials, present significant potential for future growth. Moreover, the company's management seems confident in Obicetrapib's promising future and its potential approval in Japan.

4. Stable Safety Profile: Across all its trials, obicetrapib has demonstrated a consistent safety profile, reducing potential concerns regarding off-target toxicity that could hamper its approval chances.

Previous generation of CETP inhibitors:

CETP Inhibitor	Key Endpoint[S]	Outcome	Safety
Torcetrapib	Reduction in LDL-c, increase in HDL-c	Increased risk of mortality, no benefit in CVD outcomes	Increased blood pressure, increased incidence of cardiovascular events and death
Dalcetrapib	Reduction in major adverse cardiac events [MACE]	No significant benefit in MACE reduction, increased risk of heart failure	No significant safety concerns
Anacetrapib	Reduction in LDL-c, increase in HDL-c	No significant benefit in CVD outcomes	No significant safety concerns

Click to enlarge

Note: LDL-c = low-density lipoprotein cholesterol HDL-c = high-density lipoprotein cholesterol MACE = major adverse cardiac events

Risks

Despite the promising outlook for NewAmsterdam Pharma's obicetrapib, several risks must be considered for prospective investors. First, there is the possibility that obicetrapib will not deliver meaningful or positive outcomes in crucial late-stage clinical trials, which could significantly impact the drug's approval and subsequent commercial success. Secondly, the history of CETP inhibitors is marked by multiple failures, pointing to inherent challenges in developing effective and safe treatments within this class of drugs. Thirdly, regulatory setbacks or unforeseen difficulties in either the US or European markets could delay the launch of obicetrapib, disrupting anticipated timelines and financial projections. Lastly, even with regulatory approval, obicetrapib could face a slower-than-expected launch in both US and EU markets due to competitive pressures or restrictive payer conditions, potentially hindering its market penetration and revenue generation.

Conclusion

We maintain a buy rating on NewAmsterdam Pharma based on four reasons, a) attractive market size of cardiovascular indications (25M+ in the US alone), especially given the substantial portion of patients who fail to achieve target LDL-C levels with existing SOC (i.e., statin and PCSK9 class), b) clinical differentiation: obicetrapib has demonstrated significant reductions in LDL-C and other ASCVD-related lipid markers in Phase 2 trials, along with favorable safety and tolerability, and c) robust cash runway, the company currently holds ~$469m cash with around $32m quarterly burn (Q4 2022) gives attractive ~2-3 years of cash runway even if we consider higher burn rate with the initiation of a large phase 3 trial. We see obicetrapib to be a differentiated CETP inhibitor that is differentiated from the previous generations of CETP inhibitors that failed, and we believe the company's potential efforts to expand into Alzheimer’s and diabetes should add further upside to the thesis (albeit we don't ascribe too much value to the market expansion at this point).