Similarities Between Two Immunotherapies in Cancer

Approval of Bristol-Myers Squibb’s (BMY) Yervoy® [ipilimumab] for melanoma in March 2011 marked the second victory for the field of immunotherapy in oncology within a year, with the first being the U.S. Food and Drug Administration [FDA] approval of Dendreon Corporation’s (DNDN) Provenge® [sipuleucel-T] for metastatic castrate-resistant prostate cancer [CRPC] in April 2010.  Ipilimumab was the first immune check point molecule and sipuleucel-T was the first active immunotherapy for cancer to demonstrate improved survival in randomized Phase 3 trials.  Both were published in the prestigious New England Journal of Medicine within one month of each other.

The similarities don’t end there, as both ipilimumab and sipuleucel-T have reignited enthusiasm for the field of active immunotherapy.  Accordingly, the purpose of this article is to highlight some of the other parallels between these two innovative agents.

Both Studied in Prostate Cancer

While ipilimumab was recently approved for the treatment of melanoma, the product has also been extensively studied in prostate cancer.  In fact, there are eight clinical studies with ipilimumab in prostate cancer according to ClinicalTrials.gov, including five that are currently active or recruiting.

One particular prostate cancer study made headlines in June 2009 when investigators at the Mayo Clinic reported in the online research magazine Discovery’s Edge that the combination of a single dose of ipilimumab [3 mg/kg] with androgen ablation therapy dramatically reduced the tumor size in two patients, making surgery possible for both patients whose prostate cancer had been previously considered inoperable. The controversial results from a handful of patients were met with skepticism and the complete Phase 2 results with 108 patients with advanced prostate cancer were later reported at the American Society of Clinical Oncology [ASCO] 2010 Genitourinary Cancers Symposium [abstract #168].  According to the ASCO abstract, patients treated with androgen ablation either alone or in combination with ipilimumab demonstrated a greater than 97% decline in testosterone levels, underscoring the possibility that the tumor reductions in a few patients could have been associated with androgen ablation.  Patients treated with ipilimumab, however, were more likely to have undetectable prostate specific antigen [PSA] by three months [55% vs. 38%].

A Phase 3 trial with ipilimumab following radiation therapy in patients with CRPC that have received prior treatment with docetaxel is ongoing [ClinicalTrials.gov identifier NCT00861614].

Two is Better than One

As the first two active immunotherapies approved for the treatment of cancer, it wouldn’t be surprising to see the products studied in combination in prostate cancer – especially in view of the fact that ipilimumab has already been studied in this disease.  Sipuleucel-T may help build an effective immune response to kill tumor cells, while ipilimumab may stimulate the immune system through T-cell activation and proliferation and stop tumor cells from growing.  Accordingly, giving vaccine therapy together with ipilimumab may be an effective treatment for prostate cancer.  Interestingly, the only such combination study listed on ClinicalTrials.gov relates to a completed Phase 1 trial with ipilimumab in combination with Bavarian Nordic’s (BAVA.CO) Prostvac®, an “off-the-shelf” therapeutic cancer vaccine moving into pivotal Phase 3 clinical development [ClinicalTrials.gov identifier NCT00124670].

Pricing Controversy

Both Dendreon’s sipuleucel-T and Bristol-Myers’ ipilimumab have been criticized as overly expensive new therapies.

The cost of sipuleucel-T is approximately $93,000 for a course of treatment, which consists of three infusions at two-week intervals.  In view of the fact that the product has been demonstrated to extend median survival by 4.1 months, this translates into an average cost of $23,000 per month of added survival.

In comparison, Taxotere® [docetaxel] by Sanofi-aventis (SNY) is indicated for the treatment of CRPC and is administered every 3 weeks for 10 cycles.  Assuming an average monthly cost of $4,000 for docetaxel [source: Cancer Res 2009;69(24 Suppl):Abstract nr 1076], this is an approximate total cost of $40,000 per patient.  In the pivotal TAX 327 study, median survival for prostate cancer patients receiving docetaxel was 18.9 months versus 16.5 months in the control arm, which results in an average cost of $16,666 per month of added survival or about 28% less than sipuleucel-T.  Updated survival analysis of the TAX 327 study demonstrates a 2.9-month survival advantage, which lowers the average cost to $13,793 per month of added survival or about 40% less than sipuleucel-T.  Unlike sipuleucel-T, however, treating common adverse reactions with docetaxel, such as infections, neutropenia, anemia, nausea, diarrhea, and others, increases the total cost of therapy – and more importantly negatively impacts the patient’s quality of life.  As such, the pricing of sipuleucel-T doesn’t appear completely out of line.

According to the prescribing information, ipilimumab is administered intravenously [3 mg/kg] over 90 minutes every 3 weeks for a total of four doses.  Bristol-Myers is pricing each dose at $30,000, which translates into a total cost of $120,000 for a full course of therapy.  In the pivotal ‘020 study, median survival for melanoma patients receiving ipilimumab was 10.1 months versus 6.4 months in the control arm.  The average cost per month of added survival is approximately $32,432, which is 41% higher than the only other active immunotherapy for cancer, sipuleucel-T.

However, on March 21, 2011, Bristol-Myers announced that the ‘024 study [ClinicalTrials.gov identifier NCT00324155] met its primary endpoint of overall survival.  Minimal details were provided, but an abstract of the ‘024 data is expected to be submitted to ASCO for potential presentation at the Annual Meeting in June 2011.  The ‘024 study is in patients with untreated Stage III [unresectable] or IV melanoma receiving dacarbazine plus 10 mg/kg ipilimumab versus dacarbazine with placebo.  If the median survival for patients in the ipilimumab arm is 5.2 months or greater than the placebo arm [versus 3.7 month difference in the ‘020 study], then the pricing of ipilimumab per month of added survival would be comparable to sipuleucel-T.

Prostate and Melanoma Highly Competitive

Melanoma and prostate cancer are the two most crowded clinical development segments within the active immunotherapy field.  As such, both ipilimumab and sipuleucel-T may face competition from other active immunotherapies in the near future.  In addition, the products may soon encounter small molecule rivals.

For example, Johnson & Johnson’s (JNJ) abiraterone acetate significantly improved overall survival for patients with metastatic advanced prostate cancer.  Based on the positive Phase 3 results, the company has filed marketing applications for abiraterone acetate with regulatory authorities worldwide for the treatment of metastatic advanced prostate cancer that has developed resistance to conventional hormonal therapies. Not far behind, Medivation, Inc. (MDVN) is evaluating its MDV3100 product candidate in collaboration with Astellas Pharma, Inc. (ALPMY.PK).  The Phase 3 AFFIRM trial with MDV3100 has completed enrollment of men with advanced prostate cancer who were previously treated with docetaxel-based chemotherapy and the Phase 3 PREVAIL trial with MDV3100 is currently enrolling men who have not yet received chemotherapy

In addition, Plexxikon, Inc. [being acquired by Daiichi Sankyo Company, Limited] and co-development partner Roche Holding (ROG.VX) are advancing PLX4032, an oral drug candidate that targets the oncogenic BRAF mutation present in about half of melanoma cancers and about eight percent of all solid tumors.  Interim data from a Phase 3 controlled study of PLX4032 in previously untreated metastatic melanoma patients with the BRAF mutation met both co-primary endpoints.  Patients treated with PLX4032 had improved overall survival (OS) and improved progression-free survival (PFS) compared to patients treated with dacarbazine, the current standard of care.  A New Drug Application [NDA] for PLX4032 is expected in 2011.

Some new agents might actually be synergistic with active immunotherapies instead of representing potential competition.  This was a central theme at the recent Cancer Immunotherapy Consortium’s 2011 Scientific Colloquium titled “Schedule and Dose for Combination Therapy.”

Summary

Both ipilimumab and sipuleucel-T represent important clinical advances for the field of active immunotherapy in oncology and for patients with melanoma and prostate cancer, respectively.  Further, with nearly 50 clinical programs currently underway, including nearly a dozen that are in pivotal Phase 3 development, we expect to see five active cancer immunotherapies approved by 2015.  Beyond these clinical accomplishments, however, industry observers will be closely monitoring the commercial success of these innovative agents in view of the product pricing, supply constraints, and competitive dynamics identified to date.

Cyclin-dependent Cancer Confab Preview

For more than a century, the American Association of Cancer Research [AACR] has held its annual meeting and this weekend will kick off the 101st event in Washington, DC, which is being held April 17-21, 2010.  Many pharmaceutical and biotechnology companies will be presenting new data and approximately 6,300 abstracts will be discussed in oral and poster presentations.

While a comprehensive preview of AACR is beyond the scope of this article, we note that two companies working in the area of cyclin-dependent kinase [CDK] inhibition made headlines in the months leading up to AACR.  Further evidence of interest in the area is demonstrated by the fact that the 2001 Nobel Prize in Physiology or Medicine was awarded for the discovery of CDKs and cyclins and the complete description of cyclin and cyclin-dependent kinase mechanisms.

By selectively interrupting the cell cycle regulation in cancer cells, inhibition of CDKs represents a promising strategy for cancer therapy.  Accordingly, with more than 50 abstracts related to CDK inhibition scheduled for presentation at this year’s AACR annual meeting, we provide an overview of the target and highlight some of the companies and programs being discussed.

CDK overview

Each time a cell divides it undergoes a series of events collectively known as the cell cycle.  Controlled and regulated cellular division is a normal part of cell physiology.

Cancer is characterized by uncontrolled cellular division and growth, which can be caused by mutations in DNA resulting in the overexpression of cancer-promoting oncogenes or repression of tumor suppressor genes.  There are many examples of oncogenes and tumor suppressor genes but some of the more common ones include signaling proteins [PI3K], receptors [HER2], and DNA damage and repair regulating proteins that control cell cycle check-points such as p53 and BRCA.

CDKs are a group of signaling kinases that play a direct role in the regulation and progression of the cell cycle.  CDK activity is dependent on the availability of their regulatory subunits called cyclins, which CDKs phosphorylate in order to stop cell cycle progression in cancerous cells.  Production and destruction of cyclins are tightly regulated in coordination with cell cycle progression.  Targeting CDK/cyclin macromolecular complexes is an attractive strategy for the design of novel anticancer drugs.

There are over a dozen known CDK/cyclin complexes.  The most extensively studied subtypes are CDK2/cyclin E, CDK2/cyclin A, CDK7/cyclin H, and CDK9/cyclin T which are key components of the p53 pathway and CDK4 and CDK6 interacting with cyclin D1, which are key components of the retinoblastoma or Rb pathway.

Many tumor mutations interfere or deregulate the tight control of cyclin-CDK interactions leading to overactive CDKs, resulting in continuous cellular proliferation or unscheduled re-entry into the cell cycle.  In addition, deregulated CDK activity can result in genomic and chromosome instability, a feature observed in many advanced or aggressive tumors.

Early Failures

First generation, pan-CDK inhibitors have not demonstrated improved clinical outcomes.  Reasons for early failures include non-specific drug targets or suboptimal dosing and scheduling.    Also, pan-CDK inhibitors may not have an acceptable pharmacological window due to high toxic side effects or limited efficacy.

For example, CDK7, CDK8, and CDK9 play a role in DNA transcription.  While it may be advantageous to target these CDK/cyclins as part of a multikinase drug profile, strong inhibition may result in the broad disruption of transcription, which is not desirable.

This may have been the case with BMS-387032 [subsequently known as SNS-032], a small molecule cell-cycle modulator that targets CDKs 1, 2, 4, 7, and 9.  The compound demonstrated significant safety risks in Phase I studies conducted by Bristol-Myers Squibb (BMY), including increases in certain phases of the cardiac cycle, known as the QT interval.

In 2005, Sunesis Pharmaceuticals, Inc. (SNSS) acquired rights to BMS-387032 for an up-front payment of $8 million in Sunesis’ stock, future milestone payments totaling $78 million, and royalties on net sales.  However, in December 2008, Sunesis notified Bristol-Myers that the company was terminating the license agreement for SNS-032 after no responses demonstrating efficacy were observed in a Phase I trial.

Next generation CDK inhibitors target select CDK sub-types and have shown improved potency along with other drug-like properties.  The various CDK sub-types are active at different points within the cell cycle and discrete cancers are dependent on specific CDK sub-types.  Therefore, each CDK inhibitor sub-type may be relevant to different tumors or genetic mutations.

For example, CDK4 is frequently deregulated in glioblastoma and CDK2 activity is commonly altered in colon cancer.  Recently published evidence implicates certain cyclins and in particular cyclin E, the partner of CDK2, as a mediator of acquired resistance in several cancers, such as lung and breast cancer.  Some of these next-generation programs are highlighted below [also refer to Table 1]:

Pfizer, Inc. (PFE)

In late March 2010, Pfizer made headlines with a preclinical study published in the journal Cancer Research.  Results from the study demonstrated that PD-0332991, a drug being developed by Pfizer, could arrest the growth of glioblastoma multiforme [GBM] in animals.  PD-0332991 is an oral agent that inhibits certain CDKs, mainly CDK4 and CDK6.  Six abstracts related to PD-0332991 are scheduled for presentation at AACR.  Pfizer is managing and funding all clinical development of PD-0332991, which the company licensed from Onyx Pharmaceuticals, Inc. (ONXX).  PD-0332991 is the subject of various clinical trials in multiple myeloma, NHL, mantle-cell lymphoma, glioblastoma and breast cancer.

Cyclacel Pharmaceuticals, Inc. (CYCC)

Cyclacel Pharmaceuticals, which is developing a clinical stage CDK inhibitor candidate, also made headlines earlier this year.  The company’s oral compound seliciclib [CYC202 or R-roscovitine], inhibits CDK2/E, CDK2/A, CDK7/H, and to a lesser degree CDK9/T.  Seliciclib is currently in Phase IIb clinical trials for non-small cell lung cancer [NSCLC] and nasopharyngeal cancer.

Shares of Cyclacel Pharmaceuticals jumped from $1 to more than $4 in January 2010 when independent investigators published data in the peer-reviewed journal Clinical Cancer Research showing that both seliciclib and a second-generation CDK inhibitor from Cyclacel reversed resistance to lung cancer cells with K-Ras or N-Ras mutations.  Cancers with Ras-activating mutations are thought to be among the most difficult to treat and are not responsive to modern targeted drug therapy, such as EGFR inhibitors.  The data also showed that lung cancer cells are addicted to cyclin E/CDK2.  Cyclacel expects to report top line results from its APPRAISE NSCLC Phase IIb trial with seliciclib later this year.

A different investigator group also recently published data in the peer-reviewed journal Clinical Cancer Research demonstrating that seliciclib reversed resistance to the aromatase inhibitor Femara® [letrozole].  Seliciclib killed hormone receptor-positive breast cancer cells that had become insensitive to the effects of letrozole because of over expression of low molecular weight Cyclin E.

At AACR, Cyclacel is introducing a second-generation CDK product candidate, which is currently in investigational new drug [IND]-directed development.  The undisclosed molecule is a second generation oral CDK inhibitor with increased potency.  Three abstracts related to both seliciclib and the second-generation compound are scheduled for presentation at AACR.

Sanofi-Aventis SA (SNY)

Sanofi-Aventis is developing its lead CDK inhibitor, flavopiridol [HMR-1275, alvocidib] for the treatment of both solid and hematologic malignancies.  Flavopiridol is a pan–CDK inhibitor that blocks CDK9, -2, -4, and -6 at nanomolar concentrations.  Published data from flavopiridol clinical trials suggest that its main toxicities are induction of neutropenia and secretory diarrhea.  Phase II studies of flavopiridol as a single agent have been completed in metastatic melanoma, endometrial adenocarcinoma, and multiple myeloma demonstrating limited efficacy as a monotherapy.  However, flavopiridol has shown promise as a combination therapy, with the best responses observed in CLL patients in combination with fludarabine and cyclophosphamide.  Four abstracts related to flavopiridol are scheduled for presentation at AACR.

Merck & Co., Inc. (MRK)

Merck is developing its lead CDK inhibitor, SCH 727965 [dinaciclib], for multiple indications including solid tumors, NHL, multiple myeloma, ACL, and ALL.  SCH 727965 is an intravenously-delivered CDK1, CDK2, CDK5, and CDK9 inhibitor.  The drug is administered by a 2-hour IV infusion once every 21 days.  Merck is currently recruiting patients for a Phase II study evaluating SCH 727965 to determine the activity of SCH 727965 in patients with breast cancer and in patients with lung cancer compared to standard treatment, capecitabine and erlotinib respectively.  One abstract regarding the activity of SCH 727965 in cell lines for childhood cancers is scheduled for presentation at AACR.

Bayer (BAY.DE)

Bayer will introduce its CDK inhibitor, BAY 1000394, in an abstract scheduled for presentation at AACR.  BAY 1000394 is a nanomolar pan-CDK inhibitor targeting CDK1/Cyclin B, CDK2/Cyclin E, CDK4/Cyclin D1, and CDK9/Cyclin T1.  The maximum tolerated dose for BAY 1000394 was found to be 2.0 mg/kg on QD schedule and 2.5 mg/kg on a BID intermittent schedule.  BAY 1000394 is being tested in a broad range of histological tumor subtypes.

Tragara Pharmaceuticals (private)

Tragara Pharmaceuticals is developing TG02 [also known as SB1317], an oral multi-kinase inhibitor that targets CDK 1, 2, 7 and 9, as well as two other kinases – JAK2 and FLT3.  TG02, which was licensed from S*BIO Pte Ltd in January 2009, is being prepared for IND filing in Q2 2010 with plans to proceed in hematology and solid tumors.  Tragara recently received a $1 million grant form the Multiple Myeloma Research Foundation [MMRF] to fund the early-stage drug development TG02 in treating multiple myeloma.  One abstract regarding the activity of TG02 in leukemia cell lines is scheduled for presentation at AACR.

Conclusion

CDKs play a pivotal role in a cell’s entry into division; de-regulated CDK activity is a well-documented player in tumor progression and represents an attractive therapeutic anti-cancer option.   However, first generation CDK inhibitors have not demonstrated improved clinical outcomes.  Next generation CDK inhibitors, such as those being discussed at AACR, are CDK sub-type specific and have shown improved potency along with other drug like properties.  In addition, next generation CDKs are demonstrating their importance in several difficult to treat cancers, such as those dependent on Ras-activating mutations.

Table 1: Abstracts for CDK Inhibitors at AACR

Compound Abstract #/poster#: Title Date/Time
PD-0332991 25: PD 0332991, a selective CDK 4/6 inhibitor, preferentially inhibits growth of ovarian cancer cells with high Rb and low p16 [CDKN2A] expression Sun, Apr 18, 1:00 PM – 3:30 PM
1758/1: Preclinical assessment of using [18F]FLT-PET imaging as a surrogate proof-of-mechanism biomarker for early drug development candidates Mon, Apr 19, 9:00 AM – 12:00 PM
3887/20: Reversible inhibition of CDK4/CDK6 sensitizes hematological tumor cells for cytotoxic killing by inducing sequential G1 arrest and synchronous S phase entry that enhances the intrinsic apoptosis pathway Tue, Apr 20, 2:00 PM – 5:00 PM
3888/21: Therapeutically activating the RB pathway in breast cancer: Key mechanisms of response and failure Tue, Apr 20, 2:00 PM – 5:00 PM
3884/17: Beta-2 spectrin opposes the CDK4-mediated suppression of TGF-beta signaling by rescuing Smad3 nuclear localization Tue, Apr 20, 2:00 PM – 5:00 PM
5047/26: Synergistic anti-cancer activity of the CDK4/6 inhibitor PD-0332991 in combination with 5-fluorouracil-based chemotherapy in human colon cancer cells Wed, Apr 21, 8:00 AM-11:00 AM
Seliciclib & 2nd generation compound 22: Cyclin E amplification, a novel mechanism of resistance to trastuzumab in HER2 amplified breast cancer Sun, Apr 18, 1:00 PM – 3:30 PM
3886/19: Therapeutic potential of CDK inhibitors in MLL leukemias Tue, Apr 20, 2:00 PM – 5:00 PM
4431/20: A novel derivative of the Cdk inhibitor roscovitine that induces apoptosis in CLL and overcomes stromal cell-mediated protection Tue, Apr 20, 2:00 PM – 5:00 PM
Flavopiridol 575/10: A subset of small cell lung cancer [SCLC] cell lines are Mcl-1-dependent and undergo apoptosis in response to Flavopiridol-mediated inhibition of cyclin-dependent kinase [cdk] 9 Sun, Apr 18, 2:00 PM – 5:00 PM
667/4: Mechanisms underlying synergistic interactions between the CDK inhibitor flavopiridol [Alvocidib] and the BH3 mimetic GX15-070 [Obatoclax] in human multiple myeloma cells Sun, Apr 18, 2:00 PM – 5:00 PM
650/17: Response prediction to a multitargeted tyrosine kinase inhibitor by profiling serine/threonine kinase activity and inhibition Sun, Apr 18, 2:00 PM – 5:00 PM
3544/19: Assessment of chemo-response in cells derived from patients with malignant ascites Tue, Apr 20, 9:00 AM – 12:00 PM
SCH 727965 5266/20: Pediatric Preclinical Testing Program [PPTP] evaluation of the CDK inhibitor SCH 727965 Wed, Apr 21, 8:00 AM – 11:00 AM
BAY 1000394 3883/16: Pharmacologic profile of the oral novel pan-CDK inhibitor BAY 1000394 in chemosensitive and chemorefractory tumor models Tue, Apr 20, 2:00 PM – 5:00 PM
TG02 2542/29: TG02, a novel multi-kinase inhibitor with potent anti-leukemic activity Mon, Apr 19, 2:00 PM – 5:00 PM

2009: Biotech’s Stealth Small Cap Rally

On the heels of the Dow Jones Industrial Average (DJIA) logging its worst annual performance since 1931 and the NASDAQ Composite (COMP) having its worst year since inception in 1971, it may have seemed counter intuitive to provide a bullish outlook for the biotechnology industry in 2009.  Nonetheless, at the start of the year we provided a positive outlook for biotechnology, citing the sector’s defensive characteristics, favorable technical aspects, and improving fundamentals, such as the number of new product approvals, products in clinical trials and the brisk pace of industry consolidation and licensing transactions.

With 2009 officially on the books, it appears an appropriate time to review the sector’s performance along with some of the themes highlighted in our previous articles.

Big Versus Small

The twenty-member NYSE Arca Biotechnology Index (BTK) was up 46% in 2009, while the broader NASDAQ Biotech Index (NBI) was only up 16%, underperforming the Dow Jones Industrial Average (INDU), S&P 500 (SPX), and NASDAQ Composite (COMP), which were up 19%, 24%, and 44%, respectively.  Why the huge discrepancy in returns between these two major biotechnology indices?  Unlike the equal-weighted NYSE Arca Biotechnology Index, the NASDAQ Biotech Index is market value-weighted, taking into account the total market capitalization of the companies it tracks and not just their share prices.  Accordingly, companies with the largest market capitalizations, or the greatest values, will have the highest weighting in the index.

During 2009, large capitalization biotechnology companies [greater than $10 billion] dramatically underperformed their smaller peers.  For example, Celgene Corporation (CELG) was essentially flat, Amgen, Inc. (AMGN) was down 2%, Gilead Sciences, Inc. (GILD) declined by 15%, and Genzyme Corporation (GENZ) dropped 26% [earning Henri Termeer the coveted Nance Trophy for worst biotech CEO of 2009 by TheStreet.com’s Adam Feuerstein].  Some of the reasons for this poor performance include concerns over generic competition and pipeline progress – ironically some of the same issues that have plagued big pharma.

Accordingly, the relative underperformance of large capitalization biotechnology companies in 2009 masked the fact that many smaller, innovative companies performed well, with 20 of the 125 companies comprising the NASDAQ Biotech Index producing triple-digit returns during the period.  In fact, two biotechnology companies were among the largest percentage gainers in the NASDAQ Composite with their staggering quadruple-digit returns: Vanda Pharmaceuticals, Inc. (VNDA) +2,150% and Human Genome Sciences, Inc. (HGSI) +1,342%.  See Table 1 for a list of the top ten gainers from the NASDAQ Biotech Index in 2009.

Table 1. Top ten gainers from NASDAQ Biotech Index (NBI) in 2009

Company Name Symbol 12/31/08 Close 12/31/09 Close % Change
Vanda Pharmaceuticals Inc. VNDA $0.500 $11.250 2,150%
Human Genome Sciences, Inc. HGSI $2.120 $30.580 1,342%
Targacept, Inc. TRGT $3.560 $20.900 487%
Dendreon Corporation DNDN $4.580 $26.280 474%
Hi-Tech Pharmacal Co., Inc. HITK $5.540 $28.050 406%
BioCryst Pharmaceuticals, Inc. BCRX $1.370 $6.460 372%
Spectrum Pharmaceuticals, Inc. SPPI $1.490 $4.440 198%
Santarus, Inc. SNTS $1.570 $4.620 194%
Salix Pharmaceuticals, Ltd. SLXP $8.830 $25.390 188%
Impax Laboratories, Inc. IPXL $5.000 $13.610 172%

 

Oncology: Prostate Cancer Spotlight

Driven by positive Phase 3 results from Dendreon Corporation (DNDN) regarding its prostate cancer vaccine study, investors gravitated towards biotechnology companies working in the field of prostate cancer treatment as noted in our May 2009 article.  This enthusiasm only increased when Johnson & Johnson (JNJ) announced in May 2009 that it would acquire Cougar Biotechnology, Inc., a development stage company with an oral prostate cancer treatment being studied in two Phase 3 clinical trials, for approximately $1 billion.

While not a member of either major biotechnology index, shares of Oncogenex Pharmaceuticals, Inc. (OGXI) started the year around $3.00 and ended above $22 for a 643% return.  Oncogenex is developing OGX-011, which is designed to inhibit the production of clusterin, a protein that is associated with cancer treatment resistance, and has completed Phase 2 clinical trials in prostate, lung and breast cancer.  OGX-011 received Fast Track designation from the FDA for the treatment of progressive metastatic prostate cancer in combination with docetaxel.  Shares of Oncogenex had traded higher than $42 in August 2009, but the stock price declined following a license agreement with Teva Pharmaceutical Industries (TEVA) for OGX-011 that apparently did not meet investor’s expectations.

Not all biotechnology companies working in the area of prostate cancer were as fortunate as Dendreon, Cougar, and Oncogenex.  Shares of GTx, Inc. (GTXI) were the second largest industry decliner for 2009 due to a complete response letter from the Food and Drug Administration [FDA] that cited clinical deficiencies regarding the company’s New Drug Application [NDA] for toremifene 80 mg to reduce fractures in men with prostate cancer receiving androgen deprivation therapy.  See Table 2 for a list of the top ten decliners from the NASDAQ Biotech Index in 2009.

Shareholder Activist Wins

In view of past major coups with MedImmune and ImClone, in August 2009 we reviewed Carl Icahn’s biotechnology holdings as reported in SEC filings and identified three companies that significantly underperformed the NASDAQ Biotechnology Index over the past five years, but with recent successful shareholder activist outcomes that could positively impact future performance.  In particular, we noted that Alexander Denner, who has served as Managing Director of entities affiliated with Carl Icahn and as a director of ImClone, had recently been elected as a director at each company.

During 2009, those three companies, Biogen Idec, Inc. (BIIB), Amylin Pharmaceuticals, Inc. (AMLN), and Enzon Pharmaceuticals, Inc. (ENZN) produced positive returns of 12%, 31% and 81%, respectively.  While Biogen Idec underperformed the sector, it notched the highest return among large capitalization biotechnology companies.

In other shareholder activist news, holders of Vanda Pharmaceuticals (VNDA) are likely pleased that the company’s Board of Directors spurned a request by Tang Capital Partners, LP to liquidate the company in February 2009.  Shares of Vanda were up 2,150% for the year [see Table 1] following FDA approval in May 2009 to market the company’s Fanapt™ [iloperidone], a novel antipsychotic for the acute treatment of adult patients with schizophrenia, and a subsequent marketing agreement for the product with Novartis AG (NVS).

CNS: Developments for Parkinson’s Disease

Vanda Pharmaceuticals wasn’t the only company working in the area of central nervous system [CNS] disorders to make news.  Shares of Impax Laboratories, Inc. (IPXL), which were trading around $7.50 at the time we published our August 2009 article titled “Treating Parkinson’s Disease: Investment Opportunities and Challenges,” continued to reach new 52-week highs and ended up 172% for the year [see Table 1].  Impax recently initiated the second of two Phase 3 studies designed to support marketing approval of its IPX066 product candidate for the treatment of Parkinson’s disease.  IPX066 is an investigational extended release carbidopa-levodopa product intended to rapidly achieve and then sustain effective blood concentrations of levodopa, potentially improving clinical symptom management.

Gastrointestinal Disease: 3 Hits, 3 Misses

First, the good:

Both Salix Pharmaceuticals, Inc. (SLXP) and Santarus, Inc. (SNTS) appear in the list of top ten biotechnology gainers for 2009 with triple-digit returns due to favorable regulatory progress reported during the year [see Table 1].  In September, Salix announced the successful outcome of two Phase 3 trials to evaluate the efficacy and safety of Xifaxan® [rifaximin] for the treatment of non-constipation irritable bowel syndrome.  Salix is planning an NDA submission for the first half of 2010.  In December, Santarus announced that the FDA approved the company’s New Drug Application [NDA] for its prescription tablet product for all of the indications being sought, including for the treatment of heartburn and other symptoms associated with gastroesophageal reflux disease.

While not a member of either major biotechnology index, shares of Soligenix, Inc. (SNGX.OB) increased 317% during 2009.  In January, the company reached agreement with the FDA on the design of a confirmatory, pivotal Phase 3 clinical trial evaluating its lead product orBec® for the treatment of acute gastrointestinal Graft-versus-Host Disease [GVHD].  The following month, Soligenix announced a potential $30 million North American partnership agreement with Sigma-Tau Pharmaceuticals for orBec and in October 2009 initiated patient enrollment in the confirmatory Phase 3 trial that is expected to complete with clinical data available in the first half of 2011.

Next, the bad:

As discussed in our December 2009 article “Graft Versus Host Disease: Failures and Future Opportunities,” Osiris Therapeutics, Inc. (OSIR) recently reported preliminary results from two Phase 3 trials evaluating its Prochymal product candidate for the treatment of acute GVHD.  Unfortunately, neither trial reached its primary endpoint, sending shares from $14 to a 52-week low of $5.35 by November 2009, earning the company a spot in the top ten decliners for the year [see Table 2].

The other two casualties working in the area of gastrointestinal disease and appearing in the top ten decliners for 2009 are:

  • Progenics Pharmaceuticals, Inc. (PGNX), which announced in October 2009 that the company regained worldwide rights to Relistor® [methylnaltrexone bromide] for the treatment of opioid-induced constipation from Wyeth Pharmaceuticals.  Global net sales of Relistor for the third quarter of 2009 were a mere $3.3 million, as compared to $3.2 million in sales for the previous quarter.
  • In the absence of any negative clinical or regulatory news, NPS Pharmaceuticals, Inc. (NPSP) stated it remains on track to reach full patient enrollment before the end of the first quarter of 2010 for a confirmatory Phase 3 trial with Gattex™ (teduglutide), the company’s proprietary analog of naturally occurring human glucagon-like peptide 2 [GLP-2], for the treatment of short bowel syndrome [SBS].  NPS believes that positive results from the trial, expected to complete in October 2010 according to ClinicalTrials.gov, will enable the company to seek U.S. marketing approval for Gattex.

Table 2. Top ten decliners from NASDAQ Biotech Index (NBI) in 2009

Company Name Symbol 12/31/08 Close 12/31/09 Close % Change
Sequenom, Inc. SQNM $19.840 $4.140 -79%
GTx, Inc. GTXI $16.840 $4.200 -75%
MiddleBrook Pharmaceuticals, Inc. MBRK $1.500 $0.510 -66%
Idenix Pharmaceuticals, Inc. IDIX $5.790 $2.150 -63%
Osiris Therapeutics, Inc. OSIR $19.160 $7.140 -63%
Progenics Pharmaceuticals Inc. PGNX $10.310 $4.440 -57%
Questcor Pharmaceuticals, Inc. QCOR $9.310 $4.750 -49%
NPS Pharmaceuticals, Inc. NPSP $6.210 $3.400 -45%
Discovery Laboratories, Inc. DSCO $1.120 $0.628 -44%
The Medicines Company MDCO $14.730 $8.340 -43%

 

2010 Outlook

The capital markets remain turbulent and there may be casualties along the way among undercapitalized companies, but many of the biotechnology industry’s fundamentals, such as the number of products in clinical trials, new product approvals, profitable biotech companies and industry mergers & acquisitions remain favorable for 2010. Similar to 2009, small capitalization companies with clinical or regulatory catalysts should continue to outperform their larger industry peers in the year ahead.

What is your outlook for the biotechnology industry in 2010?  Take a moment to complete our survey, which is only ten questions long and will take just minutes to complete.  The results of this important survey along with our industry outlook will be communicated in early 2010 through a future article.  Take the survey now by clicking here.

Buyout Buzz at ASH Hematology Confab

Scientific and medical advances weren’t the only topic of discussion at the 51st American Society of Hematology [ASH] Annual Meeting that began over the weekend in New Orleans, LA, as merger and acquisition activity took center stage.

Early this morning, Celgene Corporation (CELG) announced the acquisition of privately-held Gloucester Pharmaceuticals for $340 million in cash plus another $300 million in future U.S. and international regulatory milestone payments.  Gloucester’s Istodax® (romidepsin) was approved in November 2009, by the U.S. Food and Drug Administration [FDA] for the treatment of cutaneous T-cell lymphoma [CTCL] and is being developed for other hematological malignancies, including peripheral T-cell lymphoma [PTCL].

While many potential acquirers may have been sitting on the sidelines watching the market valuations of cash-poor companies continue to decline throughout the year, those depressed share prices may not last much longer.  Improving capital markets for small-cap life sciences companies, evidenced in part by this month’s $48 million follow-on financing by ZIOPHARM Oncology, Inc. (ZIOP), could accelerate merger and acquisition activity in the sector as larger companies race to fill anticipated patent expirations and gaps in their product pipelines.  Indeed, a favorable climate for merger and acquisition activity was one of the main tenets of our positive perspectives for biotechnology in 2009.

Following Celgene’s acquisition of Gloucester, we revisited the baker’s dozen of public biotechnology companies announcing upcoming clinical data presentations at ASH [as of November 27, 2009] from our recent article and identified three small-cap [eg, market capitalization less than $1 billion] biotechnology companies with unpartnered, late-stage [eg, marketed or entering pivotal trials] hematological malignancy programs:

  • Allos Therapeutics, Inc. (ALTH): The company is commercializing Folotyn™ (pralatrexate injection), an antimetabolite approved for the treatment of patients with relapsed or refractory PTCL.  While Allos has retained exclusive worldwide rights to Folotyn, which became available in the United States in October 2009, potential competition from Istodax by Celgene/Gloucester may be a concern as a supplemental NDA for PTCL is expected by year-end 2010.  Further, the company was the subject of an article in the December 4, 2009, New York Times questioning its pricing for Folotyn.
  • Seattle Genetics, Inc. (SGEN): In February 2009, the company initiated a pivotal trial of its brentuximab vedotin product candidate in patients with relapsed or refractory Hodgkin lymphoma under a Special Protocol Assessment with the FDA.  Seattle Genetics expects to submit both a New Drug Application [NDA] with the FDA under the accelerated approval regulations and a Marketing Authorization Application with the European Medicines Agency for conditional marketing authorization in the first half of 2011.  The company has retained exclusive worldwide rights to brentuximab vedotin.
  • Cyclacel Pharmaceuticals, Inc. (CYCC): At the ASH meeting, Cyclacel reported promising 1-year survival data from a Phase 2 randomized trial of its oral sapacitabine capsules in elderly patients with acute myeloid leukemia [AML] and separately interim response data in myelodysplastic syndromes [MDS].  The company is planning to start a pivotal trial with sapacitabine in 2010 and has retained exclusive worldwide rights with the exception of Japan where Daiichi-Sankyo has a right of first refusal to market the drug under terms to be negotiated.

Biotech Stocks and the ASCO-effect

Investors are hoping that the spark that could reignite investor enthusiasm for biotech stocks is taking place right now. Approximately 30,000 participants are gathering from May 29-June 2, 2009, in Orlando, Florida, for the year’s largest cancer conference. Attendees of the 45th Annual Meeting of the American Society of Clinical Oncology (ASCO) will exchange ideas and hear about the latest breakthroughs in cancer therapeutics and diagnostics from over 4,000 scientific abstract presentations during the four day event.

It is no wonder that ASCO is closely watched by biotechnology industry observers. According to the Pharmaceutical Research and Manufacturers of America (PhRMA), there are 633 medicines and vaccines developed through biotechnology in human clinical trials – the majority of them (254) for the treatment of cancer. Even more impressive, all of these products are either in human clinical trials or under review by the Food and Drug Administration (FDA).

The need for new cancer treatments and diagnostics is compelling. This year alone, the American Cancer Society estimates nearly 1.5 million new cases of cancer will be diagnosed with more than 562,000 Americans expected to die from the disease. Not only is cancer the second leading cause of death in the US (exceeded only by heart disease), the economic impact is massive. University of Chicago economists Kevin Murphy and Robert Topel reported that a permanent one percent reduction in mortality from cancer alone has a present value to current and future generations of Americans of nearly $500 billion and that a cure would be worth about $50 trillion.

For biotechnology companies working in the field of cancer, double or triple-digit stock price increases from the end of April through the ASCO meeting (usually held in late May or early June) are not unprecedented. I first dubbed this the “ASCO-effect” in May 2000 while presenting a review of the top five performing stocks from companies issuing ASCO-related news from 1996 through 1999. Ironically, more than a decade has passed, but some of the same companies are once again benefiting from the ASCO-effect.

For example, Peregrine Pharmaceuticals, Inc. (PPHM), known as Techniclone Corporation at the time, saw its stock price nearly triple as a result of the ASCO-effect back in 1998. The stock, which was trading below $0.40 at the end of April 2009, recently traded as high as $1.13 on news that preliminary data from a Phase 2 clinical trial evaluating the company’s bavituximab in combination with docetaxel in advanced breast cancer patients would be the subject of an oral presentation at ASCO.

In addition, the stock of Poniard Pharmaceuticals (PARD), known as NeoRx Corporation at the time, nearly doubled as a result of the ASCO-effect in 1998. The stock, which was trading around $3.00 at the end of April 2009, recently traded as high as $5.19 on news that data from two Phase 2 clinical trials evaluating the company’s picoplatin in metastatic prostate and colorectal cancer would be presented at ASCO.

Since there are over 4,000 scientific abstracts being presented during ASCO 2009, it would be impossible to detail all of them in this setting. However, following recent positive Phase 3 results from Dendreon Corporation (DNDN) regarding its prostate cancer vaccine study; it is not surprising that investors appear to be gravitating towards companies working in the field of prostate cancer treatment. This enthusiasm only increased when Johnson & Johnson (JNJ) announced that it would acquire Cougar Biotechnology, Inc. (CGRB), a development stage company with an oral prostate cancer treatment being studied in two Phase 3 clinical trials, for approximately $1.0 billion.

With this in mind, OncoGenex Pharmaceuticals, Inc. (OGXI) appears to be one of the early beneficiaries of the ASCO-effect in 2009. The company’s stock, which was trading around $6.00 at the end of April 2009, recently traded as high as $22.00 on news that the company will be presenting final results of a Phase 2 trial of its prostate cancer treatment at ASCO. On Monday, investors will react to the data presented over the weekend.

At the start of the year I provided a positive outlook for the biotechnology industry in 2009, citing the sector’s defensive characteristics, favorable technical aspects, and improving fundamentals, such as the number of new product approvals, products in clinical trials and the brisk pace of industry consolidation and licensing transactions. With these fundamental and technical characteristics intact, it is possible that this year’s ASCO meeting could be the spark that reignites investor enthusiasm for the sector.

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Disclaimer: This article contains the author’s own opinions, and none of the information contained therein constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. To the extent any of the information contained in the article may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.