On 3 July 2019, RedHill announced that the FDA has accepted for review the new drug application (NDA) for TALICIA for the treatment of Helicobacter pylori infection. As TALICIA is a designated Qualified Infectious Disease Product (QIDP), the FDA also granted a priority review, which will shorten the usual review time from the standard 10 months to six months. As a result, 2 November 2019 was set as the target Prescription Drug User Fee Act (PDUFA) date. Based on the data released, we assign a high likelihood of FDA approval due to the clean dataset from the Phase III trials. If approved, TALICIA could be launched by end 2019.
Top-line results from the TALICIA (rifabutin, amoxicillin and omeprazole) confirmatory Phase III study (ERADICATE Hp2) in first-line treatment of H. pylori infection regardless of ulcer status were announced on 3 December 2018. The primary endpoint, H. pylori eradication rate with TALICIA vs the active comparator of amoxicillin + omeprazole, was met with high statistical significance (p<0.0001). The TALICIA treatment group achieved an 84% eradication rate (n=228) vs 58% with the active comparator (n=227). TALICIA was found to be safe and well tolerated. Notably, the culture results showed that resistance rates to the most common antibiotics metronidazole and clarithromycin were 44% and 17% respectively, while no resistance to rifabutin was seen. This confirmed the widely acknowledged fact that H. pylori front-line treatment is ineffective in many cases
RedHill plans to use its existing commercial platform to market TALICIA to healthcare practitioners and expects a minimal incremental cost of launch (several senior new hires were announced in May). Commercial manufacturing is already in scale-up mode and RedHill is ready to start discussions with payors. We believe TALICIA is a potentially very interesting proposition. The 2017 ACG Guidelines describe therapies that include rifabutin as a salvage treatment, citing ‘moderate quality of evidence’, rifabutin cost and rare but serious safety concerns, but note a very low H. pylori resistance rate to rifabutin. RedHill’s Phase III programme (two large trials) should address any residual data quality concerns and confirm the efficacy. Safety data appear excellent at the lower doses used in the trial.
We keep our RedHill valuation unchanged at $518m or $18.3 per ADS (SOTP breakdown published in 28 May 2019 report). TALICIA’s launch is the main catalyst this year, while the planned initiation of the pivotal Phase III study with RHB-204 for non-tuberculous mycobacteria infections (NTMs) in H219 is a notable R&D event.