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Later this month, Tenax Therapeutics will report results from a Phase 3 study evaluating an oral treatment for a type of heart failure associated with high blood pressure in the lungs. The study outcome might be one of the biggest binary stock events remaining on the biotech docket this year. Tenax’s stock price could double or more if the study hits, or sink to cash levels if it fails.

Adding to the fun is the crapshoot nature of the study readout. This is a complicated disease, the proposed mechanism by which Tenax’s drug might work is unproven, and data from a prior study were mixed. Lastly, Tenax’s entire future rests on this one drug and indication. It has no fallback plan.

Tenax declined an interview request.

The company’s Phase 3 LEVEL study is evaluating an oral formulation of levosimendan versus placebo in patients with pulmonary hypertension due to heart failure with preserved ejection fraction, or PH-HFpEF. It’s a chronic, progressive disease in which the heart pumps normally but muscles on the left side (where oxygenated blood is received and pumped to the rest of the body) are too stiff to fill properly. As a result, a backup of blood raises pressure in the lungs, further stressing the heart. Patients with PH-HFpEF experience shortness of breath when performing daily activities or exercise, fluid buildup, and fatigue. The disease can progress to heart failure.

The primary efficacy goal of the LEVEL study is to demonstrate an improvement in exercise capacity, measured by a six-minute walk test performed after 12 weeks of treatment. Based on the study’s powering, an approximate 15-meter benefit favoring oral levosimendan over placebo should be enough to reach statistical significance and notch a win for Tenax. A walk distance benefit of 20-25 meters or more would be a very strong result.

Demonstrating an overall improvement in symptoms and quality of life, measured by the Kansas City Cardiomyopathy Questionnaire, or KCCQ, is a key secondary endpoint of the study.

Tenax is expected to announce the LEVEL topline study results via press release within the next three weeks. The level of detail to be offered by the company in its announcement is unclear, but it has also reserved an Aug. 29 late-breaker presentation slot at the annual meeting of the European Society of Cardiology.

At a minimum, Tenax’s press release will disclose whether oral levosimendan achieved the study’s primary goal with statistical significance. That will be enough to move the stock sharply in one direction or the other. Tenax is conducting a second Phase 3 study called LEVEL-2, with patient enrollment expected to be completed late next year.

PH-HFpEF is a common but complex disease, because it involves the interplay between the heart and pulmonary circulation. Existing classes of drugs that affect the heart’s pumping ability or widen blood vessels have been unable to demonstrate efficacy in patients with PH-HFpEF, so currently, no drugs are approved specifically to treat the condition.

Tenax is taking a different approach to solving the PH-HFpEF problem, according to Cantor Fitzgerald biotech analyst Olivia Brayer, who offered me a simplified explanation. If you think of the disease as a highway bottleneck, Tenax is trying to relieve the traffic congestion (pressure) by reducing the number of cars (blood) sent through the bottleneck. The treatment approaches that have not worked basically tried to ease the bottleneck by adding more lanes to the highway.

“If you can reduce the amount of blood that’s backing up into the heart, that in theory should lower the pressure that is spilling into the lungs,” Brayer said. Less backup and lower pressure should alleviate symptoms.

In Europe, an injectable form of levosimendan is approved to treat acute heart failure by temporarily increasing the pumping ability of the heart. For reasons that are too complicated to fully explain here, Tenax believes an oral version of levosimendan (it’s taken three times per day) should work in a chronic disease like PH-HFpEF by delivering a steady state of the medicine that preferentially targets the splanchnic (abdominal) blood reservoir to reduce the oversupply of blood volume to the heart and lungs.

The mechanistic theory is supported by studies that have targeted the abdominal blood reservoir in different ways, including with a nerve block.

Tenax conducted a small, placebo-controlled Phase 2 study using an intravenous formulation of levosimendan that showed a nearly 17-meter increase in six-minute walk distance, compared to a 13-meter decline for placebo patients. However, levosimendan failed to have a positive effect relative to placebo on pressure levels inside the left side of the heart.

Overall, the data from the Phase 2 were messy, and mostly serve as a Rorschach test for the ongoing Phase 3 that Tenax bulls view as supportive, while bears take the opposite perspective. The Phase 3 study also differs materially from the earlier study, which just adds to the debate and coin flip nature of the looming readout.

The PH-HFpEF commercial opportunity and Tenax’s valuation

Evercore analyst Gavin Clark-Gartner estimates approximately 2 million people in the U.S. are diagnosed with PH-HFpEF, making it one of the largest untapped cardiovascular market opportunities. Peak annual sales could reach a range of $2.5 billion to $5.4 billion, he forecasts, depending on the magnitude of oral levosimendan’s treatment benefit, pricing, and penetration rates. Rest-of-word sales could add another $1-2 billion.

Tenax has 70 million shares outstanding on a fully diluted basis, which at the current stock price translates to a roughly $1 billion market value.

What’s next for FDA advisory committee meetings?

Right now, the calendar is empty again. Let’s hope that changes soon and more expert panels are added. Last week’s Capricor and Replimune meetings demonstrated FDA acting commissioner Kyle Diamantas’ commitment to greater drug-review transparency, rather than the lip service offered by Marty Makary.

The votes and recommendations that emerged from the two meetings will be debated, but overall, the process boosted the accountability and credibility of the FDA. More drug advisory committee meetings would be welcomed.

I also like the split recommendations from invited experts that emerged from the Capricor and Replimune meetings, particularly given the highly critical positions that the FDA took on both of the drugs. The independent experts found the agency’s Capricor analysis persuasive, not so with the conclusion reached about Replimune. That’s a best-case outcome. The FDA is not infallible. It will overreach, and when it does, an independent advisory committee can course-correct.

I don’t know if the FDA is seeking advice, but aside from scheduling more drug review meetings, I’d suggest inviting more outside participants with subject-matter expertise, even if conflict-of-interest rules need to be loosened or waived. The Replimune meeting benefited tremendously from skin cancer experts debating the skin cancer drug data. That wasn’t the case for the Capricor meeting, where the absence of experts in Duchenne muscular dystrophy was noticeable.

At the time I was finishing this newsletter, the FDA had still not issued an approval decision on Replimune’s skin cancer drug, which was expected by Aug. 2. A delay isn’t all that surprising given the advisory panel meeting took place on July 30.

Eyes on Praxis Medicine?

The FDA is reviewing the Praxis medicine ulixacaltamide as a potential treatment for patients with essential tremor, a neurological movement disorder. The FDA accepted Praxis’ application and assigned a decision date of Jan. 29, 2027. According to Praxis, the FDA does not plan to convene an advisory committee meeting to review the ulixacaltamide data. The drug also has an FDA Breakthrough Therapy designation.

However, Praxis did make changes to the statistical analysis plan used to analyze the ulixacaltamide Phase 3 trials. Praxis disclosed the changes to investors last year and said the FDA signed off.

Following the World Cup, Bo is now a soccer fan

Thanks for reading! Until next week,

– Adam