Onyx Pharmaceuticals (ONXX) was one of the few stocks that were up today, closing up $0.63 to $37.86. Still, it is well beneath it's 52-week high of $45.90.
Management thinks the full year will be non-GAAP EPS positive, based largely on a $160 million payment from Bayer this quarter. Bayer sells Onyx's Nexavar for kidney and liver cancer, splitting the after-costs profits. The $160 million was to buy-out the rights for Nexavar in Japan, which has been ramping up to be a lucrative market because of the high incidence of liver cancer there. This was part of a larger deal to end litigation for a Nexavar-related drug, Regorafenib. Under the settlement Onyx will get 20% royalties if the drug makes it to market.
Regorafenib recently had positive Phase III data for metastatic colorectal cancer. Like Nexavar, it appears it may be a useful therapy for a variety of cancers.
The predicted annual positive non-GAAP results were hard to predict before the deal announcement because in most quarters so far Onyx's own operating expenses have been sufficient to wipe out the receipts from Bayer. For Q1 non-GAAP net loss was $14.2 million, for Q2 net loss was $27.2 million, and for Q3 net loss was $19.5 million. One reason for the net losses is that both Bayer and Onyx have been spending large sums on running Nexavar through a set of clinical trials that have shown it may be effective for other forms of cancer, and to strengthen its role in liver caner. If you subtract out the research and development (R&D) costs, in most quarters Onyx would have shown a profit. Onyx has started recruiting patients for Nexavar Phase III trials for breast cancer and thyroid cancer, and has Phase II trials underway in colorectal and ovarian cancer.
Fortunately Onyx Pharmaceuticals has been able to maintain a high cash balance despite the regular losses, ending Q3 2011 at $530 million. Assuming the $160 million payment is a Q4 event, cash at the end of the year should approach $675 million.
I would not expect Regorafenib revenue until at least 2013, and like any drug it could fail for a currently unknown reason.
Carfilzomib is still the key to Onyx's value in the 2012 to 2015 time frame. Carfilzomib is a proteasome inhibitor that had positive data for relapsed and refractory multiple myeloma in a Phase IIb trial. In fact the data was good enough that it is being submitted to the FDA for approval. At the same time two Phase III trials have been initiated. More detailed data from the Phase IIb trial will be presented at the American Society of Hematology (ASH) Annual Meeting, December 10-13, 2011. While there is an outside possibility carfilzomib will not gain FDA approval, the main question is when it will get approval.
If both Regorafenib and carfilzomib are approved by the FDA, the nature of Onyx's model will change. It should be possible, starting in 2013, to have a vigorous R&D program to continue expanding the indications for Nexavar, carfilzomib and other pipeline candidates without actually throwing the bottom line into the red.
I believe that there is always risk in biotechnology stocks from competition, the need for FDA and other national medical agency approvals, and from failure to execute.
However, with expanded indications for Nexavar, plus likely revenues from carfilzomib and royalties on Regorafenib, in the next few years Onyx should become a highly profitable company. I do not think the current stock price reflects full value.
Disclosure: I am long Onyx Pharmaceutical. I have no plans to sell or buy ONXX in the immediate future.
Keep Diversified!
Showing posts with label breast cancer. Show all posts
Showing posts with label breast cancer. Show all posts
Monday, November 21, 2011
Tuesday, December 14, 2010
Onyx Pharmaceuticals Clinical Trial Overview
I listened to the Onyx Pharmaceuticals (ONXX) presentation to analysts today. It mainly reported on Onyx's therapeutic pipeline. I have covered Onyx in more depth elsewhere (see my Onyx Pharmaceuticals ONXX page); here I am just recording my immediate impressions from the presentations.
Carfilzomib for multiple myeloma data seems to be excellent. Carfilzomib could become the drug of choice for MM patients. Revenues could begin in late 2011, but would more likely be a 2012 story (they already got a large milestone payment from Ono Pharmaceutical in Japan).
In addition to extending Nexavar (Sorafenib) for liver cancer, there are three main targets for Nexavar: breast, lung, and thyroid cancer.
The breast cancer results seemed somewhat marginal to me. With the right subtype target, they should be able to get results good enough for FDA approval, but it is not a sure thing. A big Phase III trial is about to get underway, which will give everyone a much better view.
The lung cancer results seemed fairly solid, again with the best chance of success being based on subtype identification. I would give Nexavar a better-than-average chance of approval based on data available so far.
The best data appeared to be for thyroid cancer. Here we have a good combination of a lack of any good therapy availability to date and the method of action of Nexavar working out well for the most common type of thyroid cancer. I would bet this indication will be approved.
In the short run, the biggest impact on the stock would come from the approval of reimbursement for Nexavar for liver cancer in South Korea. Liver cancer is far more common in Asia than in the U.S. or Europe (over 10 times as common), so the bulk of the global profits will eventually come from Japan, Korea, and China. China has approved prescribing Nexavar, but not reimbursement for the costs. The Korean approval won't take effect until January 1, so it won't effect Q4 2010 revenues.
My overal impression is that the Onyx stock I own is now very underpriced, but that is based on future trial results, FDA approvals, and marketing successes, so making stock purchases on that assumption involves pretty much risk.
Onyx stock (ONXX) ended the day up $1.04 or 3.1%, at $34.54.
See also Onyx Pharmaceuticals site
Carfilzomib for multiple myeloma data seems to be excellent. Carfilzomib could become the drug of choice for MM patients. Revenues could begin in late 2011, but would more likely be a 2012 story (they already got a large milestone payment from Ono Pharmaceutical in Japan).
In addition to extending Nexavar (Sorafenib) for liver cancer, there are three main targets for Nexavar: breast, lung, and thyroid cancer.
The breast cancer results seemed somewhat marginal to me. With the right subtype target, they should be able to get results good enough for FDA approval, but it is not a sure thing. A big Phase III trial is about to get underway, which will give everyone a much better view.
The lung cancer results seemed fairly solid, again with the best chance of success being based on subtype identification. I would give Nexavar a better-than-average chance of approval based on data available so far.
The best data appeared to be for thyroid cancer. Here we have a good combination of a lack of any good therapy availability to date and the method of action of Nexavar working out well for the most common type of thyroid cancer. I would bet this indication will be approved.
In the short run, the biggest impact on the stock would come from the approval of reimbursement for Nexavar for liver cancer in South Korea. Liver cancer is far more common in Asia than in the U.S. or Europe (over 10 times as common), so the bulk of the global profits will eventually come from Japan, Korea, and China. China has approved prescribing Nexavar, but not reimbursement for the costs. The Korean approval won't take effect until January 1, so it won't effect Q4 2010 revenues.
My overal impression is that the Onyx stock I own is now very underpriced, but that is based on future trial results, FDA approvals, and marketing successes, so making stock purchases on that assumption involves pretty much risk.
Onyx stock (ONXX) ended the day up $1.04 or 3.1%, at $34.54.
See also Onyx Pharmaceuticals site
Wednesday, September 30, 2009
Onyx Pharmaceuticals Breast Cancer Trial Results
Onyx Pharmaceuticals (ONXX) held an analyst meeting this morning to discuss the results from one of its clinical trials for Nexavar (sorafenib) for breast cancer. It also issued a press release on the results of a separate trial for the same indication, but with a different simultaneous chemotherapy. All together these two Phase II trials indicate that Onyx should design and initiate Phase III studies for this indication. If Phase III results are positive, then it would be likely that the FDA would approve Nexavar in combintion with chemotherapy for HER-2 negative breast cancer. Investors (and cancer patients) should keep in mind that 2011 would be an early date for this event.
Onyx is not exactly the darling of the investment community right now, and several analysts asked questions that have been circulating about the validity of the study results.
In the conference and the September 23, 2009 Nexavar breast cancer press release, the study methods were explained in detail. Patients had HER-2 negative breast cancer that was locally advanced or metastatic. The study was double-blind and had 229 patients. All patients received capecitabine, a common chemotherapy agent for breast cancer, especially in Europe. Half reveived Nexavar and half a placebo.
Those treated in the Nexavar arm had progression-free survival (PFS) of 6.4 months, compared to 4.1 months in the chemotherapy-alone arm.
That is an extremely good result in the world of breast cancer. Jose Baselga, M.D., who spoke at the conference and was the principle investigator for the study, reported that a colleague told him the results were comparable to the early results for Herceptin (a Genentech drug) for HER-2 positive breast cancer. About one-fourth of malignant breast cancers are HER-2 positive.
Chemotherapy is notably rough on patients, so toxicity of added therapies is always a big concern. The main additional side effect from Nexavar was hand-foot rash. These rashes could be serious, but were managed by gradually reducing dosages of the two compounds in the patients affected. One analyst asked if there could have been investigator bias because patients with the severe rash could be assumed to be on Nexavar. Doctor Baselga disputed that, pointing out that the rash affected those getting capecitabine only, but to a lesser extent. In a Phase III trial additional precautions could be taken to eliminate this issue.
The press release today for Nexavar in combination with Paclitaxel for advanced breast cancer was vague, but that is because the industry practice is to have detailed results presented at professional medical conferences. The key result was that the Nexavar patients "demonstrated a positive trend towards improvement of progression-free survival in the treatment group." This may turn out to not be sufficient to warrant a Phase III trial with this combination, but even so lends support to Nexavar's effectiveness for breast cancers.
So why did Onyx stock take a dive today? Probably two different issues. One is that Phase III trials are expensive and will probably eat into Onyx's not particularly robust profits in 2010 and 2011. Nexavar is already generating significant revenue for Onyx's partner Bayer: in the latest quarter global sales were $200 million, but Onyx reported GAAP net income of only $9.4 million ($15.3 million non-GAAP). This is largely due to expenses for ongoing trials for Nexavar for kidney (renal) and liver cancer. Other trials are planned or under way for lung and other coancers. Nexavar is still being rolled-out globally, which is an expensive process since drugs must be approved for sale (and for reimbursement) on a nation-by-nation basis.
But the big clunker is the plan to make a major acquisition. Onyx does not want to be dependent on a single therapy, Nexaver, no matter how broadly it might be applied in oncology. But spending a large sum of cash on a promissing, but not-yet-approved, therapy is always a big gamble.
I own Onyx stock, but have spread my risk over many therapies by holding a number of biotechnology stocks. I think Nexavar revenues, and Onyx net income, are going to improve in 2010, from liver and kidney cancer.
Onyx won't buy a clunker on purpose, so I don't think there should be any deep discounting because of an acquisition that has not yet been decided upon. But Onyx is definately a long-term play. It may be cheap now, but the big payoffs won't be until 2011 or later, when the global rollout for liver cancer is complete and we have more definitive data on Nexavar's benefit for other kinds of cancers.
Keep diversified!
See also:
my August 4, 2009 Onyx Analyst Conference Summary
Onyx Pharmaceuticals web site
Onyx is not exactly the darling of the investment community right now, and several analysts asked questions that have been circulating about the validity of the study results.
In the conference and the September 23, 2009 Nexavar breast cancer press release, the study methods were explained in detail. Patients had HER-2 negative breast cancer that was locally advanced or metastatic. The study was double-blind and had 229 patients. All patients received capecitabine, a common chemotherapy agent for breast cancer, especially in Europe. Half reveived Nexavar and half a placebo.
Those treated in the Nexavar arm had progression-free survival (PFS) of 6.4 months, compared to 4.1 months in the chemotherapy-alone arm.
That is an extremely good result in the world of breast cancer. Jose Baselga, M.D., who spoke at the conference and was the principle investigator for the study, reported that a colleague told him the results were comparable to the early results for Herceptin (a Genentech drug) for HER-2 positive breast cancer. About one-fourth of malignant breast cancers are HER-2 positive.
Chemotherapy is notably rough on patients, so toxicity of added therapies is always a big concern. The main additional side effect from Nexavar was hand-foot rash. These rashes could be serious, but were managed by gradually reducing dosages of the two compounds in the patients affected. One analyst asked if there could have been investigator bias because patients with the severe rash could be assumed to be on Nexavar. Doctor Baselga disputed that, pointing out that the rash affected those getting capecitabine only, but to a lesser extent. In a Phase III trial additional precautions could be taken to eliminate this issue.
The press release today for Nexavar in combination with Paclitaxel for advanced breast cancer was vague, but that is because the industry practice is to have detailed results presented at professional medical conferences. The key result was that the Nexavar patients "demonstrated a positive trend towards improvement of progression-free survival in the treatment group." This may turn out to not be sufficient to warrant a Phase III trial with this combination, but even so lends support to Nexavar's effectiveness for breast cancers.
So why did Onyx stock take a dive today? Probably two different issues. One is that Phase III trials are expensive and will probably eat into Onyx's not particularly robust profits in 2010 and 2011. Nexavar is already generating significant revenue for Onyx's partner Bayer: in the latest quarter global sales were $200 million, but Onyx reported GAAP net income of only $9.4 million ($15.3 million non-GAAP). This is largely due to expenses for ongoing trials for Nexavar for kidney (renal) and liver cancer. Other trials are planned or under way for lung and other coancers. Nexavar is still being rolled-out globally, which is an expensive process since drugs must be approved for sale (and for reimbursement) on a nation-by-nation basis.
But the big clunker is the plan to make a major acquisition. Onyx does not want to be dependent on a single therapy, Nexaver, no matter how broadly it might be applied in oncology. But spending a large sum of cash on a promissing, but not-yet-approved, therapy is always a big gamble.
I own Onyx stock, but have spread my risk over many therapies by holding a number of biotechnology stocks. I think Nexavar revenues, and Onyx net income, are going to improve in 2010, from liver and kidney cancer.
Onyx won't buy a clunker on purpose, so I don't think there should be any deep discounting because of an acquisition that has not yet been decided upon. But Onyx is definately a long-term play. It may be cheap now, but the big payoffs won't be until 2011 or later, when the global rollout for liver cancer is complete and we have more definitive data on Nexavar's benefit for other kinds of cancers.
Keep diversified!
See also:
my August 4, 2009 Onyx Analyst Conference Summary
Onyx Pharmaceuticals web site
Sunday, June 15, 2008
Celgene Trial Data: REVLIMID, VIDAZA, Amrubicin
There has been a fair amount of new data analysis coming from Celgene (CELG) in the past two weeks. All of it reinforces the case for the continued growth of Celgene revenues. Before looking at the results, a review of Celgene's financials are in order.
At the latest quarter results and analyst conference (See my Summary of the May 8, 2008 Celgene analyst conference and Q1 2008 results), Celgene reported revenue was $462.6 million, up 12% sequentially from $414.6 million and up 58% from $293.4 million year-earlier.
GAAP net income was negative $1.64 billion, down sequentially from positive $75.3 million and down from positive $57 million year-earlier. However, the GAAP loss was due to Celgene's acquisition of Pharmion. Non-GAAP net income was $159.3 million; EPS was $0.36.
Even if Celgene pauses in revenue and earnings growth, Q1 results annualize to $637 million of non-GAAP net income. At market close on Friday (6/13/2008) Celgene's market capitalization was $22.6 billion. Using those numbers for forward Price to earnings, you get a PE ratio of 35.5. That sounds pretty pricey in today's illiquid stock market.
The case for the stock valuation is one of proven rapid revenue growth and its likely continuation. Since the global market of Celgene's major products, Revlimid and Thalomid, are still expanding on a country by country basis, and since Revlimid's revenues almost doubled between Q1 2007 and Q1 2008, this is not an unwarranted assumption. But at some point there will be market saturation. To grow beyond that either one or more of the currently approved therapies has to by approved for treating another disease (or variation of a disease) or new drugs will have to be brought to market. Celgene already is reporting revenue of Alkeran, Focalin, Ritalin, and Vidaza in addition to the blockbuster drugs. Vidaza, which was picked up in the Pharmion acquisition, is believed to have potential revenues of over $200 million this year.
In that context the three recent data announcements are go-go indicators for investors.
Vidaza (azacitidine) was reported to provide "a significant overall survival benefit for patients with higher-risk myelodysplastic syndromes (MDS) regardless of whether patients were treated with low-dose Ara-C or best supportive care in the control arm. In aggregate, the survival benefit for VIDAZA across all countries was 24.4 months versus 15.3 months (hazard ratio 0.36) (95% Cl: 0.20-0.65) (p=0.0006)) compared to the other treatment arms." Vidaza is already approved in the U.S. for treating MDS. This is the kind of data that convinces doctors to use it rather than, or in addition to, other therapies. If you look at the Celgene product pipeline page, you will see that Vidaza is also in trials for treatment of solid tumors and AML (Acute Myeloid Leukemia).
The Amrubicin announcement was probably the most exciting. Two different Phase II clinical studies of amrubicin in patients with extensive-disease small-cell lung cancer (SCLC) either sensitive to platinum-based first-line therapy or refractory (non-responsive) to platinum-based first-line therapy. Results of the studies demonstrated improved overall response rates that compare favorably with topotecan, as well as no evidence of anthracycline-induced cardiotoxicity.
In the first study, the primary endpoint was response rate, and secondary endpoints were time to disease progression, progression-free survival, overall survival and safety. This was met with patients receiving amrubicin demonstrating an overall response rate of 34 percent, compared to 3.8 percent of patients receiving topotecan and the median progression-free survival time for amrubicin patients is 138 days compared to 106 days for topotecan. In the second multi-center international study, patients with SCLC who were refractory to first-line platinum based chemotherapy were treated with IV amrubicin . The primary endpoint was response rate, and secondary endpoints were time to disease progression, progression-free survival, overall survival and safety. The overall response rate for the study was 17.4 percent with one complete response, which compares favorably with those seen historically with topotecan. Additionally, median progression-free survival is 97 days. Amrubicin is generally well tolerated in both studies.
Of course, this is only Phase II data; Amrubicin is already in a Phase III trial, and often drugs that do well in Phase II fail in Phase III. With that warning in mind, the announced results are bullish, but actual approval and revenues from the drug are out in the post 2010 domain.
Finally, more proof came in of the efficacy of Revlimid came in. A pooled study presented at the 13th European Hematology Association (EHA) congress showed "multiple myeloma patients taking REVLIMID(R) (lenalidomide) plus dexamethasone significantly increased their survival rates. A lifetime simulation yielded an estimated mean survival of 5.6 life-years with REVLIMID in combination with dexamethasone (2.2 life-years with dexamethasone alone) for patients with one prior therapy, and 4.2 life-years (1.5 life-years for dexamethasone alone) for patients with multiple prior therapies."
Again, this just pushes doctors to get Revlimid going as a therapy earlier, rather than trying it only as a second or third line defense.
It takes time for knowledge to spread among the medical community, and of course it sometimes seems to take forever to get a new drug approved. Celgene is in the enviable position of having several approved drugs in the marketplace, a couple growing revenues very rapidly, as well as a variety of promising drugs in its pipeline. As biotechnology companies go, it is a relatively safe bet on growth.
I own a bit of Celgene stock.
Keep diversified.
More data: www.celgene.com
At the latest quarter results and analyst conference (See my Summary of the May 8, 2008 Celgene analyst conference and Q1 2008 results), Celgene reported revenue was $462.6 million, up 12% sequentially from $414.6 million and up 58% from $293.4 million year-earlier.
GAAP net income was negative $1.64 billion, down sequentially from positive $75.3 million and down from positive $57 million year-earlier. However, the GAAP loss was due to Celgene's acquisition of Pharmion. Non-GAAP net income was $159.3 million; EPS was $0.36.
Even if Celgene pauses in revenue and earnings growth, Q1 results annualize to $637 million of non-GAAP net income. At market close on Friday (6/13/2008) Celgene's market capitalization was $22.6 billion. Using those numbers for forward Price to earnings, you get a PE ratio of 35.5. That sounds pretty pricey in today's illiquid stock market.
The case for the stock valuation is one of proven rapid revenue growth and its likely continuation. Since the global market of Celgene's major products, Revlimid and Thalomid, are still expanding on a country by country basis, and since Revlimid's revenues almost doubled between Q1 2007 and Q1 2008, this is not an unwarranted assumption. But at some point there will be market saturation. To grow beyond that either one or more of the currently approved therapies has to by approved for treating another disease (or variation of a disease) or new drugs will have to be brought to market. Celgene already is reporting revenue of Alkeran, Focalin, Ritalin, and Vidaza in addition to the blockbuster drugs. Vidaza, which was picked up in the Pharmion acquisition, is believed to have potential revenues of over $200 million this year.
In that context the three recent data announcements are go-go indicators for investors.
Vidaza (azacitidine) was reported to provide "a significant overall survival benefit for patients with higher-risk myelodysplastic syndromes (MDS) regardless of whether patients were treated with low-dose Ara-C or best supportive care in the control arm. In aggregate, the survival benefit for VIDAZA across all countries was 24.4 months versus 15.3 months (hazard ratio 0.36) (95% Cl: 0.20-0.65) (p=0.0006)) compared to the other treatment arms." Vidaza is already approved in the U.S. for treating MDS. This is the kind of data that convinces doctors to use it rather than, or in addition to, other therapies. If you look at the Celgene product pipeline page, you will see that Vidaza is also in trials for treatment of solid tumors and AML (Acute Myeloid Leukemia).
The Amrubicin announcement was probably the most exciting. Two different Phase II clinical studies of amrubicin in patients with extensive-disease small-cell lung cancer (SCLC) either sensitive to platinum-based first-line therapy or refractory (non-responsive) to platinum-based first-line therapy. Results of the studies demonstrated improved overall response rates that compare favorably with topotecan, as well as no evidence of anthracycline-induced cardiotoxicity.
In the first study, the primary endpoint was response rate, and secondary endpoints were time to disease progression, progression-free survival, overall survival and safety. This was met with patients receiving amrubicin demonstrating an overall response rate of 34 percent, compared to 3.8 percent of patients receiving topotecan and the median progression-free survival time for amrubicin patients is 138 days compared to 106 days for topotecan. In the second multi-center international study, patients with SCLC who were refractory to first-line platinum based chemotherapy were treated with IV amrubicin . The primary endpoint was response rate, and secondary endpoints were time to disease progression, progression-free survival, overall survival and safety. The overall response rate for the study was 17.4 percent with one complete response, which compares favorably with those seen historically with topotecan. Additionally, median progression-free survival is 97 days. Amrubicin is generally well tolerated in both studies.
Of course, this is only Phase II data; Amrubicin is already in a Phase III trial, and often drugs that do well in Phase II fail in Phase III. With that warning in mind, the announced results are bullish, but actual approval and revenues from the drug are out in the post 2010 domain.
Finally, more proof came in of the efficacy of Revlimid came in. A pooled study presented at the 13th European Hematology Association (EHA) congress showed "multiple myeloma patients taking REVLIMID(R) (lenalidomide) plus dexamethasone significantly increased their survival rates. A lifetime simulation yielded an estimated mean survival of 5.6 life-years with REVLIMID in combination with dexamethasone (2.2 life-years with dexamethasone alone) for patients with one prior therapy, and 4.2 life-years (1.5 life-years for dexamethasone alone) for patients with multiple prior therapies."
Again, this just pushes doctors to get Revlimid going as a therapy earlier, rather than trying it only as a second or third line defense.
It takes time for knowledge to spread among the medical community, and of course it sometimes seems to take forever to get a new drug approved. Celgene is in the enviable position of having several approved drugs in the marketplace, a couple growing revenues very rapidly, as well as a variety of promising drugs in its pipeline. As biotechnology companies go, it is a relatively safe bet on growth.
I own a bit of Celgene stock.
Keep diversified.
More data: www.celgene.com
Thursday, February 28, 2008
Biotechnology February: Genentech Avastin Decision
I'll read just about any biotechnology news that comes my way, but I pay the most attention to Amgen (AMGN), Anesiva (ANSV), Biogen-Idec (BIIB), Celgene (CELG), Genentech (DNA), Dendreon (DNDN), Gilead (GILD), and Onyx Pharmaceuticals (ONXX). I am gradually building a biotech portfolio and currently own Anesiva, Biogen-Idec, Celgene, Dendreon, and Gilead. I always take notes and post summaries of these companies' quarterly analyst conferences, which you can access through my analyst conference summary page.
For this blog I thought I'd try something a bit different today. Stock prices are mostly determined by an individual company's performance. Nevertheless, there is news that can impact an entire industry, like changes in how much national governments are willing to pay for drugs. There are also times when an event changes the competitive landscape, as when a notably better treatment is introduced for a disease.
This month we have some surprising news on the FDA drug approval front. "Accelerated" approval was granted to Genentech for "Avastin® (bevacizumab), in combination with paclitaxel chemotherapy, for the treatment of patients who have not received chemotherapy for their metastatic HER2-negative breast cancer." Lets just call it a breast cancer approval for now.
The reason this is not a run-of-the-mill approval is two-fold. First, the FDA advisory panel had recommended against the approval by a 5 to 4 vote back in December 2007. The data was deemed insufficient to establish a favorable risk/benefit analysis for the use of Avastin.
I don't have statistics on it, but the FDA has tended to have a higher bar than its advisory panels. So a vote to disallow a drug that was recommended by a panel would not be as big of a surprise. For instance, Dendreon's Provenge for prostate cancer was recommended by a panel but then denied pending further study ("given an approvable letter", is the lingo).
The FDA had already given Avastin for breast cancer an approvable letter back in August 2007 [See press release]. So this current round was a re-submission. And what probably made the difference was additional data from additional trials, and the possibility of getting good data from ongoing trails. data by the FDA will be required for the accelerated approval to be converted into a full approval. "As a part of our commitment to fully evaluate Avastin in breast cancer, Genentech will also submit data to the FDA from three additional randomized trials that are either ongoing or planned." And if the data is unconvincing, the FDA can pull the tentative, accelerated approval.
So all that is interesting, but the real news is that this decision appears to mark a change in FDA policy. A lowering of the bar for cancer drugs.
In the past the gold standard for treatments has been the extension of patients' lives. Or more coldly, increasing the time until death. Improving the quality of life is another plus. Any side effects are weighed against the benefits. Avastin for breast cancer does not appear to prolong patient's lives, nor does it provide for a better quality of life. Instead, Avastin was demonstrated to slow the growth of tumors. You might think that would cause patients to live longer, but in the case of Avastin any lengthening of life has not been shown to be statistically significant in the clinical trials.
There is an argument that if something shrinks or slows the growth of cancers, it has a place beside other therapies. Clearly the FDA bought that argument.
A lot of drugs will be reviewed to see if they might meet this new criteria. Until some are put forward, we won't know whether Avastin for metastatic HER2-negative breast cancer is an exception to the rule, or the new rule.
It is possible that the FDA is reacting to negative publicity on the Provenge decision. A lot of prostate cancer patients want to try Provenge and have been pressuring Congress to get that opportunity sooner rather than later.
It is not easy being the FDA. People want you to make the right decision all the time, but what is right is open to dispute. Drugs go on the market that later prove to have unforeseen side effects and everyone wants the FDA to tighten up on approvals. But desperate patients want to grasp at any hope provided to them by the drug companies. Given how complicated medical science is, even though I many disagree with the FDA on a particular decision, I think they are doing a good job overall.
For this blog I thought I'd try something a bit different today. Stock prices are mostly determined by an individual company's performance. Nevertheless, there is news that can impact an entire industry, like changes in how much national governments are willing to pay for drugs. There are also times when an event changes the competitive landscape, as when a notably better treatment is introduced for a disease.
This month we have some surprising news on the FDA drug approval front. "Accelerated" approval was granted to Genentech for "Avastin® (bevacizumab), in combination with paclitaxel chemotherapy, for the treatment of patients who have not received chemotherapy for their metastatic HER2-negative breast cancer." Lets just call it a breast cancer approval for now.
The reason this is not a run-of-the-mill approval is two-fold. First, the FDA advisory panel had recommended against the approval by a 5 to 4 vote back in December 2007. The data was deemed insufficient to establish a favorable risk/benefit analysis for the use of Avastin.
I don't have statistics on it, but the FDA has tended to have a higher bar than its advisory panels. So a vote to disallow a drug that was recommended by a panel would not be as big of a surprise. For instance, Dendreon's Provenge for prostate cancer was recommended by a panel but then denied pending further study ("given an approvable letter", is the lingo).
The FDA had already given Avastin for breast cancer an approvable letter back in August 2007 [See press release]. So this current round was a re-submission. And what probably made the difference was additional data from additional trials, and the possibility of getting good data from ongoing trails. data by the FDA will be required for the accelerated approval to be converted into a full approval. "As a part of our commitment to fully evaluate Avastin in breast cancer, Genentech will also submit data to the FDA from three additional randomized trials that are either ongoing or planned." And if the data is unconvincing, the FDA can pull the tentative, accelerated approval.
So all that is interesting, but the real news is that this decision appears to mark a change in FDA policy. A lowering of the bar for cancer drugs.
In the past the gold standard for treatments has been the extension of patients' lives. Or more coldly, increasing the time until death. Improving the quality of life is another plus. Any side effects are weighed against the benefits. Avastin for breast cancer does not appear to prolong patient's lives, nor does it provide for a better quality of life. Instead, Avastin was demonstrated to slow the growth of tumors. You might think that would cause patients to live longer, but in the case of Avastin any lengthening of life has not been shown to be statistically significant in the clinical trials.
There is an argument that if something shrinks or slows the growth of cancers, it has a place beside other therapies. Clearly the FDA bought that argument.
A lot of drugs will be reviewed to see if they might meet this new criteria. Until some are put forward, we won't know whether Avastin for metastatic HER2-negative breast cancer is an exception to the rule, or the new rule.
It is possible that the FDA is reacting to negative publicity on the Provenge decision. A lot of prostate cancer patients want to try Provenge and have been pressuring Congress to get that opportunity sooner rather than later.
It is not easy being the FDA. People want you to make the right decision all the time, but what is right is open to dispute. Drugs go on the market that later prove to have unforeseen side effects and everyone wants the FDA to tighten up on approvals. But desperate patients want to grasp at any hope provided to them by the drug companies. Given how complicated medical science is, even though I many disagree with the FDA on a particular decision, I think they are doing a good job overall.
Sunday, August 19, 2007
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.
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.
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