Early Wednesday, Insmed Corp. provided a detailed debriefing of data from the phase II trial of Arikayce (previously Arikace), its inhaled liposomal amikacin, to treat patients with resistant nontuberculous mycobacterial (NTM) lung infections. The trial missed the pre-specified level of statistical significance for the primary efficacy endpoint, which was a semi-quantitative measurement of the change in mycobacterial density on a seven-point scale, measured from baseline to day 84 – the end of the randomized portion of the trial.

In what officials at the Monmouth Junction, N.J.-based firm called a surprising turn, however, the study met statistical significance on a secondary endpoint of culture conversion, which physician investigators characterized as a more clinically relevant finding.

The randomized, double-blind, placebo-controlled Treatment with Arikace to Realize Greater Efficacy Trial, or TARGET-NTM, compared Arikayce (590 mg once daily), added to standard of care, against standard of care plus placebo, in 90 chronically ill adult patients with resistant NTM lung disease. Patients were required to have been on the American Thoracic Society/Infectious Disease Society of America (ATS/IDSA) guideline therapy for at least six months prior to screening and to continue to have persistently positive mycobacterial cultures.

Patients were stratified for either Mycobacterium avium complex (MAC) or Mycobacterium abscessus infections, which, collectively, account for some 85 percent of NTM lung disease in the U.S. Stratification also was performed based on patients with and without cystic fibrosis (CF).

Mycobacterial density is a measurement to assess the progress or decline of patients with refractory NTM. Although the primary endpoint missed on a statistical basis, the Arikayce arm showed a positive trend (p = 0.148). In the culture conversion endpoint, 11 of 44 patients treated in the Arikayce arm had negative cultures by day 84, compared to three of 45 patients in the placebo arm (p = 0.01).

The objective of the primary endpoint was to show a reduction of at least one point along the seven-point scale in the density of bacteria to identify whether a trend suggesting eventual culture conversion could be established. On a call with analysts early Wednesday morning, company officials took pains to emphasize that they considered but deliberately eschewed culture conversion as the primary endpoint on the advice of experts, who advised the company the measure would be difficult or impossible to hit in just three months of treatment – particularly given the severely ill, treatment-resistant study population.

Renu Gupta, Insmed’s executive vice president of development and chief medical officer, stressed that the trial was the first to study an antibiotic in patients with NTM lung infections. The indication has no FDA-approved drugs and accounts for some 50,000 cases in the U.S. and 30,000 each in Europe and Japan.

“When we set out to design the study, particularly the primary endpoint, we faced some unique challenges,” she explained, noting that even the study’s principal investigators counseled against culture conversion as a primary endpoint.

“To be clear, we believe culture conversion is the leading standard and the ultimate desired clinical goal of treatment for non-mycobacterial lung infections,” Gupta said.

David Griffith, professor of medicine at the University of Texas (UT) Health Sciences Center and a co-principal investigator, acknowledged the trial was designed on a conservative basis.

“We would have picked sputum conversation as the primary outcome measure, but we thought it would be too difficult to reach,” he said, commenting that the level of culture conversion “totally took me by surprise.”

Richard Wallace, UT co-principal investigator, added that, in patients newly treated for MAC infections with a three-drug standard of care, the average time to culture conversion is 120 days. Not only was benefit seen in TARGET-NTM at the end of 84 days, but “sputum conversion was seen at the first time of data analysis, which is approximately a month into therapy,” he said. “This is the most we could have expected and probably more than we could have expected.”

Study findings also were confounded by statistical penalties around the primary endpoint for two study drop-outs and one patient death, which was unrelated to the drug, though all occurred in the Arikayce arm. Although she was reluctant to make the case that the penalties directly influenced the primary endpoint miss, Gupta said a sensitivity analysis suggested the two were related.

Patients in the treatment arm had a greater number of adverse events (AE) than those on placebo, but all were consistent with AEs in similar patient populations receiving inhaled antibiotics, Gupta added. Following the randomized portion of the study, eligible patients were allowed to receive Arikayce once daily for another 84 days in an open-label extension.

FDA’S ‘LEVEL OF OPEN-MINDEDNESS’ AN OPEN QUESTION

Insmed plans to seek meetings with regulators in the U.S. and Europe to discuss the next steps for Arikayce. The company also plans to apply for breakthrough therapy designation for the drug in the U.S., based on the culture conversion results. Arikayce previously received orphan drug, qualified infectious disease product and fast-track designations from the FDA in NTM lung infections and orphan designation from the European Medicines Agency.

A company spokeswoman said officials were in meetings and unavailable for additional comment.

The mixed results left investors to wonder whether the company’s labored explanation was reality or spin, especially given disappointment last year about findings from the company’s phase III study of Arikayce to treat Pseudomonas aeruginosa in CF. Those data showed the drug met its primary endpoint of noninferiority compared with twice-daily TOBI (tobramycin inhalation solution, Novartis AG). However, patients taking Arikayce showed slightly less improvement in lung capacity than those on competing TOBI. (See BioWorld Today, July 2, 2013.)

The dismay was short-lived. Two weeks later, Insmed netted $58 million in a stock sale to help push Arikayce to the finish line. (See BioWorld Today, July 18, 2013.)

On Wednesday, Insmed’s shares (NASDAQ:INSM) were down 13 percent, or $2.39, at the closing bell to end the day at $15.90. More than 7.6 million shares changed hands – 15 times the stock’s daily average.

Even if investors were skittish, analysts came down on the side of the company. Leerink Partners LLC analyst Joseph Schwartz raised the company’s price target to $30, from $22, on what he called the “de-risking” of top-line data.

“We continue to be very encouraged by the 11 culture conversions observed in the Arikayce NTM drug arm,” he wrote in a company update. “Investigators on the call noted that culture conversions were seen very early on and maintained throughout the end of the treatment period, which is highly impressive.”

The devil’s in the details, which the company expects to provide during an oral presentation at the ATS meeting in San Diego in May. “We expect full data to show that the patient population that was enrolled was extremely sick and patients who would never be expected to improve were helped by Arikayce,” Schwartz wrote.

H.C. Wainwright & Co. analyst Andrew Fein was equally optimistic, also raising the company’s price target to $30, from $25.

“While perhaps optically disappointing with a statistical miss on the primary endpoint of change on a [seven]-point microbiological scale, far more important, we believe, is the success achieved on the far more clinically meaningful endpoint of culture conversion,” Fein wrote in a company update. “This result is far less confounding than the more widespread expectation going into data release, where the primary endpoint was considered likely to be met, but few to any culture conversions were expected.”

Earlier this month, Fein wrote of Arikayce that “the clinical significance of microbiologic improvement in NTM continues to be a big question in investors’ minds as INSM prepares to potentially embark into a regulatory dialogue.”

Although a retrospective study correlating microbiological improvement and clinical improvement in NTM is currently in the works in 180 patients with bronchiectasis and MAC, a preliminary analysis of the semi-quantitative culture data isn’t expected until the European Respiratory Society Meeting in Munich, Germany, in September.

“The analysis is likely going to be larger/deeper than initially expected and the additional breadth of data will serve to further validate the clinical significance of microbiological improvement in NTM,” Fein wrote. “We believe that the extended schedule of the presentation of these study results will complement INSM’s path forward as it engages the FDA and the regulatory strategy crystallizes through 2014.”

In fact, the long-term future of Arikayce may be even brighter than previously expected, he suggested.

Although the FDA’s “level of open-mindedness” remains an open question, Fein said Insmed is potentially in a position to pursue simultaneous approval and commercialization of Arikace in both CF and NTM this year.