Analysis of Dendreon Breast Cancer Results

Interpreting cancer therapy study results is as much of an art as a science. Add to it trying to put some sort of financial spin on the results, and things get pretty arcane.

Dendreon announced results from a Phase I study of one of its immunotherapies on breast cancer on Friday, August 17, 2007 (See press release). A full report of the study is in the Journal of Clinical Oncology dated August 20 (See abstract). The question Dendreon investors (and potential investors) will be asking is this: will further study just burn cash, or are we headed towards a therapy that can be marketed profitably if it is ever approved by the FDA.

My first reading of the press release put me in a cynical state. 18 patients received the therapy. Of those only 4 showed any benefit. No need to pull out my statistics text: that is 22.2% who benefited, 77.8% who did not. So this does not look like a cure for cancer. In fact 3 of the responsive patients only showed "stable disease." That means the cancer did not progress, but it did not shrink either. Only one patient achieved a "partial response," meaning the cancer decreased in size. So you have to ask yourself, is that even statistically significant? Could any group of 18 people with breast cancer have one partial response or a couple of "stables" over a similar period of time without undergoing any therapy at all?

But I know that Dendreon has a similar therapy for certain prostate cancers (Provenge) that has received an "approvable letter" from the FDA. A Phase III study is being conducted with the FDA promising approval if certain endpoints are met. Provenge is exciting because there is no good treatment for the serious prostate cancer type it is likely to be approved for. While Provenge does not work for all patients, and only extends life on the average for a few months, it is safe and patients like it since it does not have the terrible side effects of chemotherapy.

This immunotherapy model will have great advantages when it works. Patients are not very inconvenienced, as the therapy requires only a blood draw, the processing of the blood, and then the re-infusion of the blood back to the patient. When it does work, by stimulating the immune system, it appears to work over a long period of time. Since it has little in the way of side effects, if could be used in combination with almost any other cancer treatment.

Some types of breast cancer respond well to available therapies, but others don't. One type that does not respond well is called HER-2, which is tied to the overactivity of the HER-2 gene. Dendreon's new treatment, Lapuleucel-T, brand name Neuvenge, specifically targets cells having overexpressed HER-2 genes. Why do some patients respond and not others? Probably because there are many complexities to HER-2 breast cancer; there are a variety of other genes that are over or under-expressed in any given case.

Depending on which sources you read, HER-2 cancers account for about 1/4 to 1/3 of malignant breast cancers. So there are a lot of patients. HER-2 breast cancer tends to be more aggressive than non-HER-2 cancer. A metastatic HER-2 cancer is a frightening thing.

There are drugs for HER-2 breast cancer already, notably Herceptin, a "blockbuster" drug from Genentech that had sales of $329 million last quarter. Herceptin is a monoclonal antibody that targets cells expressing the HER-2 gene. Although it provides benefits, according to Wikipedia "70% of patients do not respond to treatment. In fact resistance is developed rapidly by treatment, in virtually all patients." It also has potentially serious side effects.

So in fact there is room for a HER-2 breast cancer therapy, even if it is not a cure-all, if it is safe, shows some effect, and could be combined with other therapies.

As I always point out, Phase I studies provide little to go on. They should have almost no impact on the valuation of a company. Dendreon's value is in the fair possibility that it will have Provenge approved for market in 2008, combined with its general immunotherapy technology that could work on other types of cancers.

Dendreon's management will have to decide whether to proceed to Phase II studies of Neuvenge. The Phase I results were encouraging. But that has to be weighed against other possible therapeutic targets that may provide a better response to immunotherapy and be a better use of company funds.

Dendreon stock is risky (because it has no FDA-approved therapy yet, and no revenues), but the potential rewards for investors are high. In any clinical trial, no matter how encouraging prior trials may have been, there is substantial risk that efficacy numbers may decrease or previously unseen adverse reactions will appear.

I own Dendreon stock. Do visit my Dendreon page for more analysis of the value of the company.