Savara Inc. (Nasdaq: SVRA), a clinical-stage biopharmaceutical company focused on rare respiratory diseases, presented groundbreaking data from its Phase 3 IMPALA-2 trial of molgramostim for autoimmune Pulmonary Alveolar Proteinosis (aPAP) at the European Respiratory Society (ERS) Congress 2024. The trial, which met its primary endpoint, showcased a significant improvement in DLCO% at Week 24, an effect that persisted through Week 48, signaling the potential of molgramostim as a transformative treatment for aPAP.

The IMPALA-2 trial results for molgramostim in aPAP patients are highly encouraging. The drug demonstrated significant improvements in key metrics:

• Disease Severity Score (DSS): Mean change from baseline in DSS, reflecting symptoms and arterial partial pressure of oxygen, showed significant improvement with molgramostim compared with placebo at Weeks 24 and 48.
• DLCO% Responder Analysis: Responder analysis results for percent predicted Diffusing Capacity of the Lungs for Carbon Monoxide (DLCO%) showed significantly higher proportions of molgramostim responders compared with placebo at Weeks 24 and 48.
• SGRQ Total Score Responder Analysis: Responder analysis results for St. George’s Respiratory Questionnaire (SGRQ) Total Score supported numeric and significant improvements with molgramostim compared with placebo at Weeks 24 and 48, respectively.
• Ground Glass Opacification (GGO) Score: GGO score, a measure of surfactant burden, significantly improved with molgramostim compared with placebo at Week 24.

These outcomes suggest molgramostim effectively reduces surfactant burden and improves lung function. The 97% completion rate and 100% open-label continuation indicate strong patient tolerability and perceived benefit. With Orphan Drug, Fast Track and Breakthrough Therapy designations, molgramostim shows promise as a potential first-in-class treatment for aPAP.

The aPAP Market: A Critical Need for Innovation

Autoimmune PAP is a rare lung disease characterized by the abnormal build-up of surfactant in the alveoli (or air sacs) of the lungs. Surfactant consists of proteins and lipids and is an important physiological substance that lines the alveoli to prevent them from collapsing. In a healthy lung, excess surfactant is cleared and digested by immune cells called alveolar macrophages. Alveolar macrophages need to be stimulated by granulocyte-macrophage colony-stimulating factor (GM-CSF) to function properly in clearing surfactant, but in autoimmune PAP, GM-CSF is neutralized by antibodies against GM-CSF, rendering the macrophages unable to adequately clear surfactant. As a result, an excess of surfactant accumulates in the alveoli, causing impaired gas exchange, resulting in clinical symptoms of shortness of breath, often with cough and frequent fatigue. Patients may also experience episodes of fever, chest pain, or coughing up blood, especially if secondary lung infection develops. In the long-term, the disease can lead to serious complications, including lung fibrosis and the need for a lung transplant.

Current Treatment Options: WLL and GM-CSF

The gold standard of care currently is WLL, or whole lung lavage. In this method, the whole lung is washed out with a saline solution to remove the accumulated surfactant. I am dividing the WLL discussion into three parts - difficulty, efficacy, and cost.

Procedure Complexity

WLL is a complex and technically demanding procedure. Here, each lung of the patient is sequentially washed with saline under general anesthesia, in a hospital setting, under the care of a specialized team that includes anesthesiologists, pulmonologists, and respiratory therapists.

Preparation

A double-lumen endotracheal tube is put into one lung at a time. One lung is ventilated while the other is filled with saline and then drained multiple times to remove the accumulated material.

Duration

WLL can take several hours and may require post procedure monitoring in an intensive care unit.

Risks

There are potential risks, including bleeding, infection, hypoxemia (low blood oxygen), and complications related to anesthesia.

WLL Efficacy

WLL is highly effective for treating aPAP.

Symptom Relief

A large number of patients experience significant symptom relief after WLL. Some patients, however, may need repeated lavages over time as the condition can recur.

Long-Term Outcomes

While WLL does not cure aPAP, it can manage symptoms and improve quality of life. The frequency of recurrence varies, some patients may go years without needing another lavage, while others might require more frequent treatment.

WLL Cost

The cost of WLL in the United States can vary widely depending on factors such as the hospital, the region, the patient's insurance coverage, and additional medical costs like anesthesia and post-procedure care. Some sources, albeit about a decade old, put the cost at around $30,000.

Although not approved yet, GM-CSF therapy has been used off-label for a number of years as an effective treatment option for aPAP. There are a few things to consider here. One, both inhaled and subcutaneous GM-CSF have been used, however, meta-analyses of studies have shown that the inhaled option is better. Two, GM-CSF has been considered as an adjunct to WLL, but studies have shown that GM-CSF alone has done just as well as an adjunct. A meta-analysis of 10 studies showed:

The WLL therapy, whose response rate ranged from 70% to 84%, has been used as standard treatment for aPAP patients for decades. However, compared to the WLL therapy alone, some studies reported that WLL followed by inhaled GM-CSF therapy had better improvements in pulmonary function and radiology. In this meta-analyses, the pooled response rate of GM-CSF therapy (81%) was no less than WLL therapy. The analyses of pulmonary function (including DLCO, TLC, VC, FEV1, FVC), DSS, and 6MWD also confirmed the effectiveness of GM-CSF therapy. Furthermore, the subgroup analyses showed no significant differences for response or relapse rate with regard to the proportion of patients using WLL as combination therapy. These results demonstrated that GM-CSF therapy could be recognized as an alternative optimal method rather than a supplement to WLL therapy.

Savara's Journey with Molgramostim: From IMPALA to IMPALA-2

Interestingly, Savara used previous GM-CSF data to directly jump to a phase 3 trial from scratch, as my 2019 article discussed. What it brings to the table is a clinical trial to prove what people already knew and used off-label - that GM-CSF is a working alternative to the costly and invasive WLL. It also claims a more precise delivery. Currently, some doctors take an injectable version of GM-CSF called Leukine and put it in a nebulizer. Molgramostim is claimed to be more precise.

Despite the long-proven efficacy of GM-CSF, Savara managed to fail to meet the primary endpoint in a phase 3 trial called IMPALA, way back in 2019. This was a surprise because, whereas it failed to show even a 6-8mmHg placebo-corrected decrease in AADO2, a measure of low blood oxygen called alveolar-arterial oxygen gradient, historical GM-CSF data has shown AADO2 reduction in the scale of 12mmHg.

The company cited various faults with the study - a high placebo response, a too short duration (24 weeks) to assess WLL improvements, data defects, etc. They began a new study called IMPALA-2, which had as its primary endpoint DLCO or diffusion capacity of the lungs, which was a secondary endpoint in IMPALA. The trial was also extended to 48 weeks; 24 weeks for primary analysis and another 24 for placebo analysis.

Another important change was that patients on supplemental oxygen were excluded, as this created the data defect I just mentioned.

In June this year, the company announced that IMPALA-2 met its primary endpoint of a 24-week change in the hemoglobin-adjusted percent predicted DLCO with statistical significance. Not only so, but the effect lasted 48 weeks, which was a key secondary endpoint indicative of the durability of treatment.

The Future of Molgramostim and the aPAP Market

The company sees around ~5,000 US patients and sees a price point between $300k-$500k per patient per year. That is considerably higher than WLL, so they really have to prove they are better than WLL, if not to the FDA, but to the market. I am not sure switching to a "soft" endpoint really makes their case.

They are also expecting a 12-year biologic exclusivity in the US upon approval.

SVRA has a market cap of $727mn and a cash balance of $121mn. They also added a $100mn equity financing in July, which makes their cash balance approximately $216mn. Research and development expenses were $17.6 million for the three months ended June 30, 2024, while general and administrative expenses were $5.5 million. At that rate, they have a cash runway of 7-8 quarters, or well into 2026.

Challenges and Considerations for Savara

There are a number of risks. First, WLL is an effective if invasive therapy; its effect lasts for a long time, so many doctors will not be convinced by anything else.

GM-CSF has shown that it is almost as good as WLL. However, The IMPALA trial failed to demonstrate this. IMPALA-2 switched around endpoints and managed to score, but it left me unconvinced.

The price point they're considering for GM-CSF is pretty high. Given the availability of a cheaper option that is also generally safe, the market may require some coaxing.

This is a difficult call. When a company has a phase 3 trial that meets its primary endpoint, lay investors may want to jump into the stock. They tend to forget the small nuances, some of which I discussed here. I could be wrong, and the FDA may well look at Molgramostim and its endpoints less critically than I have - even the market may be agreeable to a high orphan drug price tag. However, out of an overabundance of caution, I will avoid this name.

The Bottom Line

Savara's successful IMPALA-2 trial marks a crucial step forward in the treatment of aPAP. The positive results, while promising, raise some important questions about the future of molgramostim and its potential impact on the aPAP market. Only time will tell if the drug can overcome the challenges it faces and become a viable alternative to existing therapies.