Coya Therapeutics: An Attractive Valuation And First Set Of Data

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Coya Therapeutics is a clinical-stage biotech that focuses on regulatory T-cells to develop therapies for neurodegenerative, metabolic, and autoimmune diseases. The most recent data have been from an open-label academic clinical study conducted with commercially available products by Dr. Stanley Appel and Dr. Jason Thonhoff at Houston Methodist Hospital that examined 4 patients over 48 weeks of treatment with COYA 302. The primary endpoint was the well-validated ALSFRS-R scale and the topline data showed no or minimal decline from baseline (33.5) to week 24 (33.75 +/- 3.3) or 48 (32 +/- 7.8), indicating significant amelioration in the progression of the disease. While these data represent a small number of patients, there is a consistency of results that appear promising.

Before looking at more details, what is the scientific rationale for COYA-302?  In general, when Tregs become dysfunctional it creates a pro-inflammatory environment that can lead to neurodegeneration. Coya-302 is a combination of low dose IL-2 and a CTLA4-lg fusion protein for subcutaneous administration. The idea is that the low dose IL-2 increases Treg expansion as the CTLA4-lg fusion protein depletes pro-inflammatory components of the immune system, such as effector T-cells, activated macrophages, cytokines. The net effect should be a significant decrease in inflammation and restoration of the anti-inflammatory function of Tregs,  which may limit neurodegeneration.

While the trial is small at 4 patients, there are fairly well-established data as to the natural history of ALS. The PRO-ACT database is a repository of 8,600 ALS patients with over 8 million longitudinal observations and patients declined an average of 1.02 points per month on the ALSFRS-R scale (source here). While there is certainly going to be variability and that becomes amplified in smaller patient samples, this is an extensive dataset of ALS patients and provides a robust picture of the expected progression of the disease.

While we cannot definitely show that the patients in the Coya trial would decline exactly as the average of the PRO-ACT database analysis, there is a way to get a sense of their consistency. There was a 20-week screening period and the company noted that the four patients declined an average of 1.1 points per month. That is nominally higher than the PRO-ACT database but basically signals a set of patients having the expected rate of decline before treatment.  

While the typical ALS trials examine declines at week 24, the Coya trial has resulted at both 24 and 48 weeks. Essentially, we get two looks at the effect and ideally one wants to see consistent results. The change in the ALSFRS-R score from week 0 to week 24 was an actual increase of 0.25 point and the decline from week 0 to week 48 was only 1.5 points. Keep in mind that the natural history of around 1 point per month of decline means that the expected decline at 24 weeks would be 6 points and at 48 weeks it would be 12 points.  One can see this visually in the following figure from the corporate presentation.

Source: Slide 17 Coya Corporate Presentation

 It is difficult to look at the graph and not see the stability and consistency of patient scores. This stability is correlated with a significant increase in Treg suppressive function from baseline to weeks 4, 24, and 48 (slide 19 in corporate presentation). It is interesting as well that the trial follow-up period (off treatment) showed a decline in both the ALSFRS-R score as well as Treg suppressive function. It is also important to add that COYA 302 was well tolerated throughout the study.

To be clear, nothing can be shown definitively in a 4-patient investigator-sponsored trial but there is a nice consistency in the data. The company plans to start a company-sponsored phase II well-controlled trial in the second half of 2023, which would provide a more robust analysis, but it is certainly encouraging to see the uniformity of results in this initial look at the efficacy of COYA-302.

Outside of COYA-302, there will be preliminary data of COYA-301 in Alzheimer's Disease (AD) presented at the 2023 Keystone Symposia Meeting for Neurodegeneration, which will be held May 15th-19th. The data comes from an 8-patient open-label academic study conducted with commercially available products in mild to moderate AD patients led by Dr. Appel and Dr. Faridar at the Houston Methodist Hospital.  COYA-301 is a proprietary formulation of low dose IL-2 for subcutaneous administration that has been designed to expand Tregs in vivo and while this is a separate indication and treatment, it will be encouraging for the treatment modality (increasing Treg anti-inflammatory function) if there is a positive signal in a second neurodegenerative disease.

It seems that the market has yet to fairly value the ALS data let alone the potential in AD. This sets up quite an attractive risk/reward particularly if data continues to build from these first looks. As the company expands the development of its assets and generates confirmatory data, the valuation will more and more reflect the long-term potential. If future reads of data remain consistent with the ALS data, then the current valuation represents a steep discount to its true value that will eventually become unlocked with additional data.

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Disclosure:No position in stock mentioned

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