KalVista Pharmaceuticals has drawn attention amid its push to change the treatment landscape for a rare but serious swelling disorder called hereditary angioedema or HAE. Not even a regulatory setback has fully dampened Wall Street's enthusiasm.
The Food and Drug Administration, citing a lack of adequate resources, announced on June 13 that it was delaying an approval decision for the company's treatment for HAE by a month. But analysts and the company remain upbeat.
KalVista was angling to win approval of its treatment for HAE on June 17. This inherited condition causes unpredictable swelling attacks that can affects the extremities, stomach and larynx. If approved, KalVista's sebetralstat would be the first pill to treat swelling attacks.
But the FDA said it didn't have the resources to meet the original decision deadline. Instead, the agency said it will make a decision on sebetralstat's future within four weeks. Leerink Partners analyst Joseph Schwartz noted this is the same division that missed a deadline for a GSK drug earlier this year. It's also currently reviewing a CSL drug.
"It appears as if this is a division that has been under a heavy workload recently, which has caused some goal dates to be missed," Schwartz said in a client note. "Management remains confident that there are no fundamental issues, and this is merely a speed bump in the review process."
In response to the FDA's news KalVista shares slumped, but shares remained up by double digits from a recent low in late May, as of midday Wednesday.
KalVista Takes On Injectables
KalVista expects to make a huge difference in the treatment of hereditary angioedema.
Chief Executive Benjamin Palleiko says there are four emergency treatments for HAE swelling attacks. But they are injected or intravenous.
Injections hurt, Palleiko told Investor's Business Daily. They're difficult to carry around and must be stored at specific temperatures, avoiding extreme heat. These drawbacks mean patients often skip or delay treatment for hours, allowing the swelling to become significantly worse.
A tablet is a more convenient method, he said.
"We have people treating within 10 minutes of attack onset," he said. "And so, simply the fact that you're treating within 10 minutes and not 180 minutes makes a huge difference in terms of how severe the attack is going to become and how quickly you're going to start to feel better."
Can A Pill Stack Up?
One big investor question KalVista had to answer was whether an oral drug could be as effective as an injection, Palleiko said.
In final-phase testing, patients began to feel relief from their symptoms within 1.61 hours to 1.79 hours of taking sebetralstat, depending on the dosage. That compares to 6.72 hours for placebo recipients. Palleiko says the results are on par with the injectable and infused drugs.
Once a patient takes sebetralstat, the attack stops progressing within 20 minutes, Palleiko said, citing the roughly 3,000 attacks KalVista has tackled in its clinical development program. About an hour to an hour and a half later, they start feeling relief, he said.
"People get all the benefits of an oral tablet without giving up any (effectiveness) or safety compared to the injectables," he said. "We've shown (sebetralstat is) certainly on par with all the other therapies."
Licensing Deal In Japan
There are estimated to be about 50,000 people with HAE. The condition is "quite rare," Palleiko says. He estimates there are about 8,000 people in the U.S. with the condition.
The most recent advents in the HAE space have been chronic treatments. But even those patients still experience swelling attacks. When it happens in the larynx — which represents just 5% of attacks — it can be deadly. Palleiko emphasizes that none of the patients in testing have had difficulty swallowing the company's tablet during an attack.
In the U.S., KalVista plans to launch sebetralstat on its own. It can do the same in Europe. But the company recently signed a licensing agreement with Kaken Pharmaceutical to commercialize sebetralstat in Japan. Schwartz, of Leerink, said the licensing deal, which was signed in April, suggests that KalVista is "on the cusp of unlocking a valuable opportunity in hereditary angioedema."
Under terms of the deal, KalVista will receive an up-front payment of $11 million and an additional $11 million payment if certain regulatory milestones are achieved in 2026. The deal also includes commercial milestone payments and royalties on sales.
"At this juncture, the opportunity in Japan represents upside to our estimates," Schwartz said in another report. "We view this deal favorably, as it provides additional external validation of the attractive commercial opportunity for sebetralstat, as well as brings in incremental non-dilutive funding for the launch."
Schwartz has an outperform rating on KalVista's biotech stock.
Growing Need For On-Demand Drugs
Needham analyst Serge Belanger estimates the market for HAE drugs is worth about $3 billion. Two thirds of it is comprised of chronic treatments. He expects the total market to hit $4 billion by 2030.
The chronic HAE treatment space is exceptionally busy, says Palleiko. Over the next few years, it could grow to 11 competitors, he said. Many patients start their HAE treatment journey with chronic drugs. But they're expensive and not 100% effective.
"Our view here is that for a lot of people once sebetralstat gets approved, this could become the foundation of their HAE disease management," he said. "So instead of having to go and do all these other burdensome activities, they'd have this with them, they feel an attack come on and they'll treat it."
Needham's Belanger estimates the market for on-demand treatments for swelling attacks to be worth $650 million today and grow to $1.25 billion by 2030, driven by increasing treatment rates and new products. If approved, KalVista plans to sell sebetralstat under the brand name Ekterly.
There hasn't been a new on-demand treatment for HAE since 2014, Belanger said. The question now is less around FDA approval and more around sebetralstat's uptake and sales trajectory.
"We believe there are key dynamics specific to the HAE on-demand market, such as a stable patient pool, low competition, broad payer access (with mostly commercial coverage), and high interest for oral treatments that should provide confidence for a strong sebetralstat launch starting in mid-2025 that we expect will grow to peak sales in the $700MM-range," he said.
Highly Rated Biotech Stock
KalVista stock is on an upward trajectory after hitting a fresh low at 11.11 on May 28. Since then, the biotech stock has bounded more than 12%, as of midday trades on Wednesday.
Shares have a strong IBD Digital Relative Strength Rating of 81, which puts them in the leading 19% of all stocks when it comes to 12-month performance.
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
