CFRX: Interim Futility Analysis for Phase 3 DISRUPT Trial Once 60% Enrolled…

By David Bautz, PhD

NASDAQ:CFRX

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Business Update

Update on Phase 3 DISRUPT Trial

In January, 2020, ContraFect Corp. (NASDAQ:CFRX) announced the first patient had been dosed in the Phase 3 DISRUPT (Direct Lysis of Staph aureus Resistant Pathogen Trial) study of exebacase in patients with Staphylococcus aureus bacteremia, including right-sided endocarditis (NCT04160468). The randomized, double blind, placebo controlled trial is being conducted at centers in the U.S. and will enroll approximately 350 patients randomized 2:1 to receive either exebacase or placebo, with all patients receiving standard of care antibiotics. The primary endpoint of the trial will be clinical response at Day 14 in patients with methicillin-resistant S. aureus (MRSA) bacteremia, including right-sided endocarditis. Clinical response is defined using objective clinical criteria including: 1) resolution of S. aureus bacteremia/right-sided endocarditis signs and symptoms that were present at baseline; 2) no new signs or symptoms of bacteremia/right-sided endocarditis; 3) no complications of bacteremia/right-sided endocarditis; 4) no changes in anti-staphylococcal antibiotics after treatment with study drug due to persistence, worsening, or recurrence of signs or symptoms of bacteremia/right-sided endocarditis; 5) blood cultures negative for S. aureus by Day 14; and 6) the patient is alive. Clinical response is being determined by an independent, blinded clinical adjudication committee.

Key secondary endpoints include clinical response rate at Day 14 for all S. aureus bacteremia patients (including both MRSA and methicillin-sensitive S. aureus [MSSA]), 30-day all-cause mortality in MRSA patients, and clinical response at Day 60. The company will also evaluate the impact of treatment with exebacase on length of hospital stay, length of stay in the intensive care unit, and 30-day readmission rates for both all-cause and S. aureus infection readmissions. An interim futility analysis will be conducted after the first 60% of patients enrolled into the trial are evaluable for efficacy.

The following table shows the statistical parameters for the primary efficacy endpoint and key secondary efficacy endpoints from the trial. The primary endpoint is 86% powered to show a 28% increase in clinical response rate at Day 14 with the use of exebacase plus standard of care antibiotics compared to standard of care antibiotics alone.

Breakthrough Therapy Designation for Exebacase

On Feb. 24, 2020, ContraFect announced that the US FDA has granted Breakthrough Therapy designation to exebacase for the treatment of MRSA bacteremia, including right-sided endocarditis, when used in conjunction with standard of care antibiotics. The FDA established the Breakthrough Therapy program to speed the development of medicines for serious or life-threatening diseases with preliminary clinical evidence that may show the investigational product could substantially improve at least one clinically significant endpoint over currently available therapies.

Breakthrough Therapy designation was granted to exebacase based on data from the Phase 2 clinical trial showing treatment with exebacase led to a 42.8 percent higher responder rate at Day 14 in patients with MRSA infections compared to treatment with standard of care antibiotics alone (74.1% vs. 31.3%; P=0.01). Exebacase carries both Breakthrough Therapy and Fast Track designation, which will allow for a rolling BLA submission and priority review.

Compassionate Use of Exebacase in France

In January 2020, ContraFect announced that four patients with post-operative prosthetic joint infections (PJIs) have been treated with exebacase under Temporary Authorizations for Use from the French National Agency for Medicines and Health Products Safety in collaboration with Dr. Tristan Ferry at the Hôpital de la Croix Rousse in Lyon, France.

The patients that have been treated thus far had longstanding, treatment refractory PJIs. Following treatment, the promising signals seen in these patients has led to the temporary authorization to use exebacase being extended to patients with Staphylococcal PJI that occurs shortly after surgery to hopefully avoid significant damage to the joint.

Biofilm formation in prosthetic joints is a very challenging infection to clear with traditional antibiotics, which typically leads to additional surgery and possibly replacement of the joint to ultimately get rid of the infection. The company has previously shown exebacase is able to rapidly clear biofilms, as shown in the following figures, thus we view the application of the drug in treating difficult-to-clear prosthetic infections as a natural next step in its development life cycle.

First Gram-Negative Lysin Candidate Announced

In December 2019, ContraFect announced it has selected its next development product candidate, CF-370, which is an engineered lysin targeting Pseudomonas aeruginosa, a Gram-negative bacterial species that is listed as a serious threat in the Centers for Disease Control and Prevention (CDC) 2019 Antibiotic Resistance Threats Report. Gram-negative bacteria are responsible for a number of different bacterial infections and the emergence of antibiotic resistant strains is leading to a potential public health crisis. Lysins represent a novel means to treat these infections through their ability to cleave peptidoglycan bonds (peptidoglycan is the main structural component of bacterial cell walls), however their use against Gram-negative pathogens has been hindered by their inability to penetrate the outer membrane.

The following figure shows how lysins are effective against Gram-positive bacteria due to their ability to easily interact with the peptidoglycan layer. However, Gram-negative bacteria have an outer membrane that acts as a barrier against most lysins, thus preventing them from reaching the peptidoglycan layer. While the majority of purified Gram-negative lysins have no antimicrobial activity, there are a select few that have some activity in low ionic strength buffers (indicated by the asterisk in the following figure on the right). It is these lysins that ContraFect used as lead compounds to modify in order to increase their anti-microbial activity, with CF-370 emerging as the lead candidate from this research.

In a preclinical rabbit pneumonia model, a single dose of CF-370 either alone or in combination with meropenem resulted in increased survival and reductions in bacterial counts in lung, kidney, and spleen. The company will be presenting this and other detailed preclinical data supporting the advancement of CF-370 at an upcoming scientific conference.

Financial Update

On March 19, 2020, ContraFect announced financial results for the fourth quarter and full year 2019. As expected, the company did not report any revenues for the quarter or the full year. Net loss for the fourth quarter of 2019 was $10.4 million, or $1.11 per share, compared to net income of $5.9 million, or income of $0.75 per share, for 2018. The change to a net loss was due to an $18.5 million increase in the non-cash charge for the change in fair value of warrant liabilities. R&D expenses for the fourth quarter of 2019 were $3.9 million compared to $6.7 million for the fourth quarter of 2018. The decrease was primarily due to a reduction in clinical trial spending. G&A expenses for the fourth quarter of 2019 were $2.6 million compared to $2.1 million for the fourth quarter of 2018. The increase was due to an increase in legal fees and expansion of the company’s intellectual property portfolio.

For the full year 2019, net loss was $12.8 million, or $1.54 per share, compared to a net loss of $37.7 million, or $4.95 per share, for 2018. The decrease was primarily due to a $21.9 million decrease in the non-cash charge for the change in fair value of warrant liabilities. R&D expenses for 2019 were $18.1 million compared to $22.4 million for 2018. The decrease was primarily due to a reduction in clinical trial expenses. G&A expenses in 2019 were $9.8 million compared to $8.7 million in 2018. The increase was primarily due to increased legal fees, consulting fees, and personnel expenses.

As of Dec. 31, 2019, ContraFect had approximately $24.2 million in cash and cash equivalents, which we estimate will be sufficient to fund operations into the third quarter of 2020. As of Mar. 9, 2020, ContraFect had approximately 15.3 million shares of common stock and when factoring in stock options and warrants a fully diluted share count of approximately 19.6 million.

Conclusion

The next major milestone for the DISRUPT trial will be when enrollment reaches 60%, which will trigger the interim futility analysis. We believe the company may be in a position to offer guidance about when that analysis may take place once the rate of enrollment is known for a few months in addition to what impact, if any, the coronavirus pandemic will have on enrollment. Our current valuation is $30 per share.

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