Inozyme Pharma (NASDAQ:INZY) is a biotech to watch because it is making traction on advancing its drug INZ-701 for the treatment of patients with rare diseases. Two programs, where progress has been made, would be the use of this drug to treat patients with ENPP1 Deficiency and ABCC6 Deficiency. There is an ongoing phase 3 pivotal study known as ENGERGY-3, which is using INZ-701 for the treatment of pediatric patients with ENNP1 Deficiency. Even though this catalyst is not set to have results released from it until mid-2025, that doesn’t mean that there won’t be other catalysts in 2024 in the meantime to increase shareholder value. For instance, in Q1 of 2024 it is expected that topline data from the phase 1/2 Adult study using INZ-701 for the treatment of ENPP1 Deficiency, will be released in Q1 of 2024. From there, there are additional catalysts relating to this ENPP1 Deficiency program.
It is expected that topline data from the phase 1/2 Adult trial using INZ-701 for the treatment of patients with ENPP1 Deficiency will be released in Q1 of 2024. After that, pending enough cash on hand, it is possible that Inozyme may choose to move forward with a phase 3 study for these adults with this particular disorder. Lastly, it is further de-risking its pipeline with the addition of targeting another rare-disease indication. This would be with the use of INZ-701 for the treatment of patients with calciphylaxis. A phase 1 trial for this program is expected to begin in the 1st half of 2024. If recruitment goes smoothly, it anticipates that it could release results from this early-stage study in Q4 of 2024. Despite the phase 3 program being far off, there are still a wide range of catalysts in 2024, which I believe could drive the share price of the company higher.
INZ-701 For The Treatment Of Patients With ENPP1 Deficiency
The most advanced program in the pipeline would be the use of INZ-701, which is being advanced in multiple clinical studies for the treatment of patients with ENPP1 Deficiency. Why do I consider this to be the most advanced program? That’s because phase 3 clinical trial testing is underway for it. Specifically, the use of this drug is being deployed in the phase 3 ENERGY-3 pivotal trial for the treatment of pediatric patients with ENPP1 Deficiency. This is a good target for Inozyme to go after because it is an unmet medical need. There are no FDA approved drugs to treat ENPP1 Deficiency. Even more than that, it is a devasting disease for which patients desperately need a treatment option. Consider that it occurs as a result of a mutation in the ENPP1 gene in a person. The problem is that this mutated gene leads to two major issues, which are:
- Low levels of pyrophosphate [PPi]
- Low levels of adenosine in the blood
Low levels of PPI means calcification of the arteries, which can cause a host of problems. Then, with respect to low levels of adenosine, it results in the overgrowth of smooth muscle cells inside blood vessels [intimal proliferation]. The thing is that there is a cycle of events that such patients must pass through. For instance, there is a high rate of ENPP1 Deficiency patients who are determined to have generalized arterial calcification of infancy [GACI]. Low levels of PPi and adenosine in the blood can lead to stroke, cardiac or multiorgan failure. Going back to what I stated above, the hope is that a drug like INZ-701 can be successful. Why is that? That’s because it is said that approximately 50% of infants with ENPP1 Deficiency die within 6-months of birth. For those who don’t die because of it, there are two other periods they must be worried about. The first period is such that patients between the ages of 1 to 13 can get something known as Autosomal Recessive Hypophosphatemic Rickets Type 2 [ARHR2]. In essence, this is characterized by extremely low phosphate levels in the blood [hypophosphatemia]. For 70% of patients who do make it past the 1-year period, they develop ARHR2. This results in bone issues, neurological problems and hearing loss. Lastly, there is a period of disease after the age of 13. That is when ENPP1 Deficiency patients obtain something known as Osteomalacia or softening of the bones. About 85% of patients experience problems relating to joint or bone pain. In addition, to having mobility issues and calcification in multiple parts of their body.
As I stated above, the use of INZ-701 for the treatment of these patients with ENPP1 Deficiency is being explored in the phase 3 ENERGY-3 study. This open-label pivotal study is going to randomize 33 patients 2:1 to receive either of the following doses:
- INZ-701 – 2.4 mg/kg weekly
- Control arm of convention therapy [oral phosphate supplements and calcitriol or other active forms of vitamin D3]
This trial is going to deploy two different endpoints with respect to this study. Why is that? That’s because of a regulatory update that was provided by the biotech, where a co-primary endpoint would be required for the European Territory. For the U.S. pivotal study, the primary endpoint is just a change in plasma PPi from baseline over time [52 week treatment period]. On the other hand, the European regulators want to not only see this endpoint, but another one as well, which is the RGI-C score (with p<0.2). Thus, for possible European approval of INZ-701 for ENPP1 Deficiency, the co-primary endpoint must be met.
The pivotal phase 3 ENERGY-3 study is key for the ENPP1 Deficiency program because it is the most advanced trial in the pipeline. However, data from it won’t be released for quite some time. Matter of fact, Inozyme believes that it is on track to report results from this pivotal study in mid-2025. If that is the case, then what can actually drive the value of the company higher? That would be additional catalysts expected throughout 2024. For instance, INZ-701 is being deployed in adults with ENPP1 Deficiency in three cohorts from the phase 1/2 study. 48-week results from this particular early-stage study are going to be released in Q1 of 2024. Secondly, there might be an early look in using INZ-701 for infants with this disorder. That is, interim data from the phase 1b ENERGY-1 study in infants, is expected to be released in the 2nd half of 2024. Lastly, there is a goal of initiating another pivotal trial for infants Ex-U.S., which will be known as ENERGY 2. This particular trial is expected to begin in Q2 of 2024. As you can see, there are a host of other catalysts on the way to potentially increase shareholder value this year. Despite the fact that the pivotal phase 3 ENERGY-3 study is not going to be released for quite some time.
Financials
According to the 10-Q SEC Filing, Inozyme Pharma had cash, cash equivalents and short-term investments of $192.4 million as of September 30th 2023. The driver of the cash on hand was an underwritten public offering of 14,375,000 shares of the company’s common stock, which included 1,875,000 shares issued upon the exercise in full by the underwriters for their option to purchase additional shares. With this offering, it was able to generate $64.4 million in proceeds. It also tapped into the ability of an ATM agreement it made with Jefferies, whereby it could offer up to $50 million. As of September, 30th 2023, Inozyme sold 3,553,995 shares of its common stock under this Sales Agreement for aggregate net proceeds of $21.2 million. Thus, there are still funds it can use here if it needs to raise additional cash. However, I believe it is well funded for the time being. I say that because it believes that it has enough cash on hand to fund its operations into Q4 of 2025.
Risks To Business
There are several risks that investors should be aware of before investing in Inozyme Pharma. The first risk to consider would be with respect to the release of the phase 3 ENERGY-3 results next year. The risk is that there is no assurance that the primary endpoint of change in plasma PPi from baseline over a 52-week period will be met with statistical significance. In addition, the European portion wanted to add another endpoint, which is the RGI-C Score [with p<0.2]. Thus, even if approval of INZ-701 is given for the United States territory based on the primary endpoint, there is a possibility that European approval may not be achieved on the basis of the additional efficacy endpoint.
The second risk to consider would be with respect to the near-term data readouts for both of the ongoing ENPP1 Deficiency and ABCC6 Deficiency programs. The two near-term catalysts would be the release of results from the phase 1/2 studies using INZ-701 to treat both of these patient populations. Such data is expected soon, and there is no guarantee that the results from one or both of these studies will turn out to be positive.
The third and final risk to consider would be with respect to the expansion opportunity, which might be possible as part of Inozyme’s pipeline. It is the goal to initiate the phase 1 SEAPORT-1 study, which is using INZ-701 for calciphylaxis in patients with end-stage kidney disease [ESKD] receiving hemodialysis. Interim data from this early-stage study is going to be released in Q4 of 2024.
Conclusion
Inozyme Pharma has been able to advance the use of INZ-701 for the treatment of patients with rare disorders. Even though the phase 3 ENERGY-3 study using INZ-701 for the treatment of patients with pediatric ENPP1 Deficiency is not expected to readout for quite some time, that doesn’t mean that investors can’t take advantage of other upcoming milestones. The two near-term catalysts noted above would be the release of INZ-701 in the two ongoing phase 1/2 studies targeting adults with ENPP1 Deficiency and ABCC6 Deficiency. I believe that this data is important to watch because it would reinforce the technology of the company. The goal is to cleave the genes in question for each of these rare disorders, and thus bring about sustainable PPi and adenosine levels. In turn, it should help these patients achieve relief, especially since there are no therapies available to them. I believe that with phase 3 testing underway for INZ-701 plus several catalysts anticipated throughout 2024, investors could benefit from any potential gains made.
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