Is it better to be first or best? Between the two, recent initial public offering Viridian Therapeutics prefers the latter, Chief Executive Jonathan Violin says. And it appears investors in the IPO stock agree.
In mid-August, Viridian shares rocketed more than 73% over two days after the biotech company unveiled the first results from a test of its experimental thyroid eye disease treatment. The news put Viridian stock at its highest point since the company's initial public offering at $11 per share a year ago.
Thyroid eye disease is a complication arising from Graves disease. Graves causes a patient's thyroid to become overactive. In patients with thyroid eye disease, this leads to swelling in the tissues behind the eye. As a result, patients experience bulging of the eye, a condition called proptosis that also can cause double vision.
But after six weeks of treatment with Viridian's experimental drug, five out of six patients had lower levels of proptosis. Proptosis declined by an average 2.4 millimeters. Further, double vision improved by 75%. Now, Viridian is starting a pivotal study, and the IPO stock is on a run.
The results could help Viridian to rival Horizon Therapeutics. Horizon makes the only approved treatment for thyroid eye disease, Tepezza.
Viridian's Violin applauded Horizon's work with Tepezza in thyroid eye disease. "The treatment landscape had been transformed," he told Investor's Business Daily. "But we view this as really early innings of the game. There's really a lot more we can do for patients."
IPO Stock Tied To A Rare Disease
The medical community considers thyroid eye disease a rare, orphan condition. This means it affects fewer than 200,000 people in the U.S., according to the Food and Drug Administration.
For Horizon, getting the first approval in this realm has helped its sales rocket. The company has a suite of other products, but Tepezza is the biggest moneymaker. In the second quarter, Tepezza generated about $480 million in sales, growing 6% year over year.
Though Horizon recently cut its forecast on Tepezza revenue — it expects sales to grow by a high-teens percentage vs. prior guidance for a mid-30s percentage — analysts remain bullish on growth in the near term. On average, analysts expect Tepezza to pull in $1.96 billion this year and grow to $3.55 billion in 2027. The company says Tepezza growth is still recovering from the early stages of the pandemic.
Viridian wants in on that growth. Since announcing its first test results on Aug. 15, the IPO stock has soared, while Horizon shares have skidded to a two-year low. In an email to Investor's Business Daily, Horizon spokesman Geoff Curtis said the company stands as a proponent of multiple treatment options.
"However, the Viridian data we have seen to date is in a small number of patients over a short time frame and is not enough to draw any meaningful conclusions about relative (effectiveness) and safety," he said. "By the time Viridian comes to market, if they do, we will have a significant competitive advantage with robust clinical and real-world evidence."
Key Differences Between Infusions
Key differences exist between Viridian's drug, dubbed VRDN-001, and Horizon's Tepezza.
Both are infusions. Tepezza requires eight infusions, one given every three weeks, and the procedure takes 60 to 90 minutes each time. Viridian hopes to whittle that down to five infusions, also one every three weeks, with each procedure lasting only 30 minutes. Further, in Viridian's study, patients began showing proptosis improvement as soon as three weeks into the treatment cycle. In Horizon's pivotal study, patients began showing improvements after an average of six weeks.
Wedbush analyst Laura Chico noted Tepezza patients showed a 2-millimeter improvement in proptosis at six weeks vs. the 2.4-millimeter improvement for VRDN-001 patients.
"Given the small patient numbers, further validation is needed but we come away seeing VRDN-001 offering impressive (effectiveness) at a smaller dose," she said in a report to clients.
She has an outperform rating on Viridian.
Viridian CEO Violin says the final-phase study will pit VRDN-001 against a placebo rather than vs. Tepezza. That's standard in a case like this, he said. This will allow the FDA to examine the risks and benefits of Viridian's drug and, if approved, give patients another choice.
"What we're proposing to offer is a choice when patients are newly diagnosed or become eligible for treatment," he said. "Is it going to be better for them to have Tepezza or what we think can be a drug with the potential for higher (effectiveness), faster onset of symptom improvement, a shorter course of treatment — a three-month treatment instead of a five-month course of treatment?"
Highly Rated IPO Stock
Viridian also plans next-generation efforts in thyroid eye disease.
The company also is working on longer-lasting subcutaneous shots of the same medicine. These would allow patients to receive a quick shot at a doctor's office. Patients could even give shots themselves at home.
Viridian tested the first of its longer-lasting shots in healthy volunteers. The drug's effects persisted for 30 to 40 days. Viridian hopes to have the next data from that study in the second quarter. It also has designs on another longer-lasting shot with possible data by the end of 2024, CEO Violin said.
The news has helped the IPO stock surge well above its 200-day moving average for the first time since April, according to MarketSmith.com. Bullishly, Viridian stock also has a nearly perfect Relative Strength Rating of 98. This puts its shares' performance in the leading 2% of all stocks over the past 12 months, according to IBD Digital.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
