Health Care

Trials and Triumphs of Seizure Disorders

By: Joseph Thome, Peyton Bohnsack, Troy Langford, Stacy Ku, Ritu Baral, Tyler Van Buren

Sep. 10, 2024 - 4 minutes 30 seconds

A medical professional looking at images of a person's nervous system.

Overview:

Innovation in the seizure disorder landscape is prepared for growth
We cover common themes of interest for Key Opinion Leaders (KOL)
Key topics outlined for investors analyzing a specific program or company
Analysis and feedback combined to create a framework helping model current and future prescribing trends

In this report, we combine feedback from Key Opinion Leader (KOL) conversations and surveys, topical investor surveys, primary research papers, and our own fundamental analyses to identify key areas of focus both for the seizure disorder field broadly and through the investor lens.

Continued Appetite for Innovation in the Seizure Disorder Landscape

By our analysis, the seizure disorder landscape is heating up with ~130 programs advancing in the pipeline across both public and private companies. We believe the appetite for innovation in the field continues to be strong. While there are 30 commercially approved agents available, there remains substantial room to improve seizure-freedom rates across the paradigm, enhance response rates for refractory patients and advance therapeutics for rare genetic epilepsy conditions.

Key Areas of Focus from the KOL Perspective

Common themes appeared as key areas of focus for the field:

Better efficacy for refractory seizures
Improved tolerability to drive better compliance
Precision neuroscience approaches targeting the specific causes of seizure activity across indications
Agents that can be effective against multiple co-morbid indications

Key Topics for Investor Focus

On the way to identifying these "holy grail" assets, we believe investors should focus on several key topics when analyzing a specific program or company. These include:

Appropriateness and translatability of pre-clinical models
Effective clinical trial designs reflecting the evolving landscape
An understanding of the target market and moving prescription trends
Potential take-out potential

We detail each of these key themes in the report. Companies are taking diverse approaches to tackle seizure disorders, and we expect that novel insights into the pathogenesis of seizures, advancements in genetic screening and learnings from first-gen programs will yield several blockbuster therapies over the coming years.

Seizure Disorder Evaluation Framework

We used a combination of both independent analyses and KOL/investor feedback to arrive at our seizure disorder evaluation framework. The two KOL surveys targeted both physicians that treat adult seizure disorders (n=25) and those that treat pediatric populations (n=25). The results from these surveys helped define a picture of current and future prescribing trends, key areas of unmet need and the bar for clinical meaningfulness in ongoing clinical trials for developing therapies. In conjunction, we surveyed investors (n=20) to gauge sentiment on the landscape overall and expectations for key data readouts over the next 12-18 months.

To complement our survey work, we conducted a detailed analysis of pre-clinical translatability across various seizure disorder models and developmental/commercial stage assets to determine which models may be appropriate to characterize activity, depending on mechanism of action and seizure type. In addition, we catalogued each development program in the seizure disorder landscape across more than 70 public and private companies and conducted analyses on addressable market sizes and projected revenue potential. Our report also contains an analysis of historical partnering, licensing and M&A transactions in addition to historical stock performance for the class.

Financial And Industry Model Implications

The results of our investor survey suggest optimism that stocks focused on the seizure disorder space will outperform the XBI over the next three years, with 40% of respondents suggesting the class will substantially outperform (+10% or more) and another 45% of respondents indicating the class will perform 5-10% better. This optimism is potentially well placed as our analysis of a seizure disorder basket climbed 24% over the past three years, outperforming the XBI which gained only 6% over the same period. Our analysis also suggests that seizure disorder IPOs perform well after entering the market. Five of the six IPOs we tracked saw a 33% or greater increase from the offering price in the first month with the remaining stock being flat.

The success and/or failure of individual clinical catalysts and launch metrics will have the largest impact on specific models and stock performance, and we detail key catalysts across our coverage universe below and throughout the piece. Broadly, we expect that several new products will come to the epilepsy space over the next several years which should support the overall market and help offset the erosion of sales of older branded therapies. We expect these new launches to feature products with both improved efficacy/tolerability profiles compared to currently available treatments as well as novel mechanisms of action which could serve as potential combination partners for other therapies and/or address novel epilepsy patient populations.

Specifically from the TD Cowen coverage universe, we expect nine products to generate ~US$5 billion in value in 2030, up from US$1.8 billion in 2023. Of these projected revenues, we expect over US$2 billion will come from products that have yet to launch. Notably, these figures do not contain contributions from several already approved landmark products and not yet approved products in later-stage development for epilepsy indications with the potential to reach the market over the next 5-7 years which would likely add several billion dollars in additional market value if successful. Thus, we believe there remains substantial potential for value creation in the seizure disorder market.

Subscribing clients can read the full report, Trials And Triumphs Of Seizure Disorders - Ahead Of The Curve Series, on the TD One Portal

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Joseph Thome, PhD

Managing Director, Health Care – Biotechnology Research Analyst, TD Cowen

Joseph Thome, PhD
Managing Director, Health Care – Biotechnology Research Analyst, TD Cowen

Biography

Joseph Thome is a managing director and senior research analyst on TD Cowen’s biotechnology team. Dr. Thome was selected as a “Rising Star in Equity Research” by Business Insider in 2021 and the TD Cowen biotechnology team has consistently been among the top-ranked teams in the Greenwich Survey.

Prior to joining TD Cowen in March 2016, Dr. Thome was an NIH pre-doctoral research fellow at Columbia University, studying the compartmentalization and maintenance of the human T cell immune response from infancy into adulthood. His research has been published in several prestigious journals including Cell and Nature Medicine.

Dr. Thome received a BA with high honors in chemistry and biochemistry from Oberlin College and a Ph.D. in microbiology and immunology from Columbia University, where he was granted the Dean’s Award for Excellence in Research.

Stacy Ku, PhD

Director, Health Care – Biotechnology Research Analyst, TD Cowen

Stacy Ku, PhD
Director, Health Care – Biotechnology Research Analyst, TD Cowen

Biography

Stacy Ku is a director on TD Cowen’s biotechnology team. She joined TD Cowen in March 2018 after completing her Ph.D. in Neuroscience at Icahn School of Medicine at Mount Sinai.

Her NIH-funded fellowship research focused on the neurophysiological circuit interrogation of mechanisms underlying depression and stress. Her collaborative research experience also includes psychiatric and neurological disorders, spanning addiction, epilepsy, Alzheimer’s disease, Parkinson’s disease, and Huntington’s disease.

Dr. Ku holds a Bachelor of Arts degree from Columbia University in Neuroscience and Behavior.

Ritu Baral

Managing Director, Health Care – Biotechnology Research Analyst, TD Cowen

Ritu Baral
Managing Director, Health Care – Biotechnology Research Analyst, TD Cowen

Biography

Ritu Baral joined TD Cowen in August 2014 as a senior biotechnology analyst and managing director. Ms. Baral has more than nineteen years of experience in biotechnology finance, including over sixteen years in biotechnology equity research. Her coverage has focused on rare diseases and neurology. From August 2006 until June 2014, she held a series of positions in biotechnology equity research at Canaccord Genuity, including senior analyst and managing director. Before that, Ms. Baral was an equity research associate at JMP Securities and a senior associate at the Trout Group. Previously, she was a research associate at Columbia University’s Department of Medicine, where she participated in neuroendocrine research focused on appetite and metabolism regulation, and completed graduate coursework in immunology.

Ms. Baral graduated with a BA in biological sciences from Barnard College. She is involved in a number of rare disease patient advocacy organizations, including as a board member of the Everylife Foundation for Rare Disease and the Industry Advisory Board of the National Tay-Sachs and Allied Diseases Foundation. She was previously on the board of directors of the Pulmonary Fibrosis Foundation.

Tyler Van Buren

Managing Director, Health Care – Biotechnology Research Analyst, TD Cowen

Tyler Van Buren
Managing Director, Health Care – Biotechnology Research Analyst, TD Cowen

Biography

Tyler Van Buren is a Managing Director and senior equity research analyst on the biotechnology team at TD Cowen.

Mr. Van Buren has a decade and a half of equity research experience and is responsible for providing analysis on large-, mid-, and small-cap biotechnology stocks. His views on biotechnology topics are often quoted by national news services such as Bloomberg, Endpoints News, Reuters, STAT, and the Wall Street Journal, and he has been featured as a guest on CNBC and Fox News.

Prior to rejoining TD Cowen, Mr. Van Buren was a Managing Director and senior biotechnology equity research analyst at Piper Sandler (previously Piper Jaffray) for over three years. Prior to Piper Sandler, Mr. Van Buren spent five years on the biopharma research team at TD Cowen. Previously, Van Buren was a founding member and Managing Director at LifeSci Advisors where he helped build the firm’s biotechnology research practice. Earlier in his career, he worked at Amylin Pharmaceuticals, Lithera Pharmaceuticals, the Sanford-Burnham Medical Research Institute, and the U.S. Department of Agriculture.

Mr. Van Buren earned a master’s degree in biology and a bachelor’s degree in biochemistry and cellular biology from the University of California, San Diego.
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