Monte Rosa Therapeutics (NASDAQ:GLUE) has been making good progress in advancing its pipeline of molecular glue degraders (MGDs). The goal is to have protein-to-protein interaction to eliminate diseases but without binding pockets. Such an approach allows it to go after target indications that are thought to be undruggable with other small molecules. It recently released some preliminary PK/PD data using its molecular glue degrader MRT-2359 for the treatment of patients with MYC-driven solid tumors. In the early part of 2024, it expects to give guidance on when full data from the phase 1 study will be released and this is an important catalyst to keep an eye on. Not only that but there is another reason why I believe that this biotech can possibly provide shareholder value.
It is because it was able to develop a partnership deal with Roche (OTCQX:RHHBY). Such a deal allowed it to receive an upfront payment of $50 million and it could be eligible to earn up to more than $2 billion in potential future milestone payments. The goal of the partnership is so that Roche and Monte Rosa Therapeutics could develop MGDs against cancer and neurological indications. Again, the reason is that MGDs might have potential in areas in which current small molecules are not able to address. It is also advancing the use of MRT-6160 for the treatment of patients with autoimmune disorders and hematological malignancies. An IND submission for this drug, to advance towards clinical testing, is expected in the 1st half of 2024.
Phase 1/2 Interim Data Shows Therapeutic Potential Of MRT-2359
The main clinical product in Monte Rosa’s pipeline is an MGD known as MRT-2359. It is being advanced in a phase 1/2 open-label study for the treatment of MYC-driven solid tumors such as lung cancers and high-grade neuroendocrine tumors. The reason why I believe that this is a good biotech to look into is that it already released interim PK/PD data that showed how well the targeting of the GPST1 protein works and that patients with specific biomarkers responded pretty well. Tumor size reductions were observed in patients who had biomarker-driven solid tumors. It was stated that as of the analysis cutoff date of September 7, 2023, a total of 21 patients had been dosed with MRT-2359. About 15 out of the 21 patients were evaluable for efficacy. It was noted that there was a 60% reduction in the GSPT1 protein expression observed in these patients at all dose levels evaluated. Why was this finding particularly important? It is because this is the same degradation of GSPT1 protein expression reduction levels observed in preclinical testing. To take it one step further, the company is likely to put more focus on the targeting of MYC-driven solid tumors. Out of the 15 evaluable patients who were given MRT-2359 across three dose cohorts, 6 of them were identified as having biomarker-positive disease. Why is this important? That’s because MYC-induced protein tumors are reliant on or have a dependency on the GSPT1 protein. Thus, patients with MYC-driven solid tumors are more likely to respond to this MGD being developed by Monte Rosa Therapeutics. This was proven with respect to the six-biomarker positive MYC-driven tumor patients, whereby the following was achieved:
- Two patients achieved a partial response (PR)
- 1 patient achieved stable disease (SD)
- 1 patient with an unevaluable biomarker status had experienced durable stable disease (SD)
There were grade 1 and grade 2 treatment-related adverse events observed in this study for the 0.5 mg and 1 mg doses of MRT-2359. There were some Grade 4 adverse events at the 2 mg dose level of this drug consistent with preclinical testing, however, no patient discontinued treatment due to adverse events (AEs). Not only that, but the Grade 4 AEs at the 2 mg dose level were transient and were able to be resolved with dose reductions. It’s been a tough road for MGDs over the years as none could efficiently target cancer or other disorders. If Monte Rosa Therapeutics can build upon this success, then it may have the ability to really help these cancer patients who have exhausted all other possible treatment options. Plus, if it is eventually able to get its drug MRT-2359 to market it will be able to address a pretty sizeable market opportunity. For instance, it is exploring the use of its drug towards MYC-driven solid tumor types. Such MYC-driven solid tumor types it is going after include non-small cell lung cancer (NSCLC), small cell lung cancer (SCLC), prostate cancer, bladder cancer, and others (including neuroendocrine tumor types of the lung as well). The global non-small cell lung cancer market size is projected to reach $36.9 billion by 2031. Despite Monte Rosa only targeting MYC-driven tumors, it is still a good opportunity nonetheless. For example, when just looking at MYC-protein expression, it is said that approximately 40% to 75% of NSCLC patients have it. Thus, this is still a large market opportunity for it to go after. The same can be said about several of the other indications as well. A second example would be patients with small cell lung cancer. It is said that the global small cell lung cancer therapeutics market size is expected to reach $16.33 billion by 2032. Again, even though the focus is only on MYC-driven solid tumors, it still presents itself as a good opportunity. It is said that MYC is overexpressed in 30% of small cell lung cancer (SCLC) tumors. A key item to look out for would be that this company intends to release an update on the timing for a full phase 1 data release in early 2024. Thus, this is something important to keep an eye on in the early part of next year.
Roche Partnership Could Bring About Massive Future Milestone Payments
It remains to be seen if Monte Rosa Therapeutics’ QuEEN technology platform can produce sufficient MGDs that are capable of going after undruggable targets. However, Roche is quite interested, which is why it established a partnership with this small pharmaceutical company. Roche entered into a collaboration with this biotech to develop MGDs against cancer target indications and neurological disorders, previously considered impossible to drug. This is not a small deal either, because Monte Rosa received an upfront payment of $50 million with the potential to earn future milestone payments of up to $2 billion or more. Of course, to reach such milestone payments, positive progress must be achieved from this partnership, otherwise, the deal could fall apart.
According to the 10-Q SEC Filing, Monte Rosa Therapeutics had cash, cash equivalents, restricted cash, and marketable securities of $207.6 million as of June 30, 2023. It believed that it would have enough cash to fund its operations into 2025. However, the biotech decided that it was too long to wait to raise additional cash, thus it priced an offering. In essence, it announced that it would raise $25 million with an at-the-market offering from a life sciences-dedicated investor. With this latest cash raise, the risk of near-term dilution has been eliminated and the company is now well capitalized to advance its preclinical pipeline, MRT-2359 and MRT-6160. I don’t think it will need to enact another cash raise until at least the end of 2024. However, should it release positive data from its phase 1/2 study using MRT-2359 for the treatment of MYC-driven solid tumors in 2024, then it will likely enact another cash raise.
Risks To Business
There are several risks that investors should be aware of before investing in Monte Rosa Therapeutics. The first risk to consider would be with respect to the advancement of MRT-2359, which is being explored in the ongoing phase 1/2 study for the treatment of MYC-driven solid tumors. That’s because even though interim PK/PD data suggests that this MGD produces clinical activity, there is no assurance that it will translate to positive final phase 1 results to be released later on. A second risk to consider would be with respect to the IND submission of MRT-1660, which is expected to happen in the 1st half of 2024. For starters, there is no assurance that the FDA will approve of this IND submission so that this company can initiate a phase 1 human study.
Secondly, even if this study is eventually initiated, there is no guarantee that MRT-1660 will be successful as an MGD in either autoimmune disorders or hematological malignancies. The third and final risk to consider would be with respect to the Roche deal that was developed, which entails the possibility of $2 billion or more in future potential milestone payments. The goal of this partnership is to advance several MGDs that are to be used against cancer and neurological disorders. The risk here is that should clinical testing not go well, or if Roche has a change of heart, then it’s quite possible that such a collaboration agreement could be terminated at any time.
Monte Rosa Therapeutics has done well to advance several of its MGDs for the treatment of patients with MYC-driven solid tumors. Initial interim PK/PD data proved that MRT-2359 was at least able to reduce the GPST1 protein by 60%, which is what MYC solid tumors are reliant on to grow. The other aspect to consider here with this biotech is that it is advancing the use of another drug known as MRT-1660, which targets the VAV1 protein. This is important because VAV1s function in both T and B cells. Due to this mechanism, this drug can be applied to both autoimmune and cancer indications. An IND submission of MRT-1660 is expected in the 1st half of 2024 and this could provide shareholders with added value. Further confirmation of MGDs produced by Monte Rosa Therapeutics such as MRT-2359, could come upon the release of the full phase 1 results.
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