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Morningstar | Allergan's Top-Line Phase 3 Results for Abicipar Don't Shift Our View for Now

We're leaving our fair value estimate unchanged for wide-moat Allergan following the announcement of top-line results from two phase 3 clinical trials (Sequoia and Cedar) for abicipar pegol, the company's DARPin anti-VEGF for age-related macular degeneration. Although the initial data set is limited, there's some reason for optimism as the drug's eight-week and 12-week dosing regimen met the primary clinical endpoint of noninferiority to more frequent monthly injections of Lucentis for proportion of patients with stable vision 52 weeks. Regardless, we'd prefer to get more detail on secondary endpoints, including change in visual acuity and retinal thickness, to get a better handle on how abicipar might compare with other longer-duration AMD products entering the market. We note, however, that efficacy data seen in phase 2 results suggest that abicipar should be roughly on par with Lucentis.

The clinical trial results don't quell the primary ongoing concern with abicipar's inflammation. Since this trial evaluated the same formulation as seen with phase 2 data, we weren't surprised to see the 15% inflammation rate in the trials, which actually appears higher than the previous studies. As we've noted, this continues to place ultimate success of the drug primarily on Allergan and Molecular Partners' ability to reduce impurities and lower the inflammation rate. Since management gave no indication of how low they think they can reduce inflammation, we won't get visibility on this issue until the early 2019 completion of a 100-patient open label study (Maple) with the reformulated version. Management hopes to file abicipar with the U.S. Food and Drug Administration at approximately the same time.

For our previous commentary on abicipar, please see Page 11 of our December 2017 piece "Allergan's Wide Moat Intact Despite Concerns for Its Health."