Backstory (the part that you can skip)
Years ago, when I was working as an undergraduate in a research laboratory of one of the top-ranked medical schools in the United States, I was fascinated with all things related to cancer research - especially cancer treatment. Multiple myeloma was one of the malignancies that I was hoping to combat in my future career as a researcher. I specifically recall one afternoon when I told my PI that I was going to be the one to "finish off" multiple myeloma, to which he responded something along the lines of "I'm sure you will - but first you ought to finish the PCR." The PCR (Polymerase Chain Reaction) kept me in the lab, by myself, until 11:30 on a Friday night.
Events like that helped me change my mind about my career path, although the interest in cancer (and multiple myeloma) never really left. That is why I've decided to dedicate an article specifically to our most recent advances in multiple myeloma treatment and the investment applications.
2012's New Proteasome Inhibitor - Kyprolis (carfilzomib)
The multiple myeloma world was shaken last year after the FDA approval of Onyx Pharmaceuticals' (ONXX) proteasome inhibitor Kyprolis/carfilzomib on July 20th, 2012. The approval seemed to surprise Wall Street to some extent, resulting in an immediate 10% rally in the stock and a subsequent rally all the way to the 52-week high of $93.18/share in mid-October.
It was clear that the FDA's accelerated approval of Kyprolis/carfilzomib based on just the phase IIb 003-A1 study was enough to convince a good number of skeptics that this was the wrong drug to bet against. About 1 million shorted shares were covered in the weeks following the FDA approval, and the stock rebounded terrifically from the "sell the news" reaction that caused drops in August 2012. While volume seems to be drying up for ONXX, many investors still remain optimistic on Kyprolis as we head into a new year.
On January 15th, 2013 Onyx did announce a public offering of 4.4 million shares of common stock (diluting shares by about 6.5%, not including another 660,000 shares granted to cover potential overallotments), although I think that this move was unsurprising and necessary for Onyxx to raise the funds needed to effectively market Kyprolis and simultaneously improve second-line myeloma treatment in the United States.
It's also worth noting that Kyprolis is not the first proteasome inhibitor that was approved for multiple myeloma treatment. That honor belongs to Velcade (bortezomid), which was created by Millenium Pharmaceuticals - now a subsidiary of Takeda Pharmaceuticals (TKPYY.PK). While drugs that have a similar mechanism of action often have to compete directly with one another, Kyprolis can actually extend the lives of patients who have already taken bortezomid, and hence captures a niche market for itself while offering a second chance to myeloma patients who don't respond to current standard-of-care drugs.
Onyx is trading at $83.43/share, and with a market capitalization of $5.6 billion. It isn't a cheap play anymore, but their other cancer drug Nexavar (sorafenib) is expected to continue sales growth to make up for the fact.
Takeda is trading at $24.67/share, and has an approximate market cap of $39 billion. It is not traded on either of the two major U.S. exchanges, so note that liquidity is lower and volatility is generally higher. I think that this can make the stock harder to trade in the short term, but shouldn't necessarily discourage investors who believe in the company and its prospects.
Some Upcoming Myeloma Drugs
There is no feasible method to adequately cover all of the myeloma drugs in development right now with a single article, but we can at least glance at a few treatments that have caught my recent attention.
1.) Elotuzumab (HuLuc63) - the humanaized monoclonal antibody in phase III trials developed by big pharma name Bristol-Myers Squibb (BMY)
I briefly mentioned elotuzumab in a recent article I wrote on Senesco Technologies (which is also mentioned in this article) although I didn't elaborate on the drug very much. I think investors should be interested in monoclonal antibody-based cancer therapies (it's the next big thing), especially for myeloma due to the difficulty in targeting the malignant plasma cells.
Antibody therapies like elotuzumab have shown terrific results in the slowing of malignancies (as measured through progression-free survival). Phase IIb trial results presented at the American Society of Hematology (ASH) meeting on December 9, 2012. If granted approval, elotuzumab would become another name on a growing list of treatments for patients when they require second-line treatment of myeloma. The results are available on the Bristol-Myers website, although the general implications of the recent clinical trial data are summarized well by company statements.
"The Phase 2 PFS data for elotuzumab presented today are encouraging and support further evaluation of this antibody in patients with multiple myeloma as part of large Phase 3 trials."
Dr. Paul Richardson, Clinical Director, Jerome Lipper Center for Multiple Myeloma
BMY is trading at a price of $34.30/share, and a market capitalization of $57 billion. It is the only stock mentioned in this article that offers a dividend, which works out to be a 4.10% yield. Due to its sheer size, I wouldn't expect elotuzumab to significantly affect the stock even under optimistic conditions, but it certainly won't hurt the company if it ends up successful.
2.) Ibrutinib (PCI-32765) - the Bruton's tyrosine kinase inhibitor for blood cancers by Pharmacyclics (PCYC)
Bruton's tyrosine kinase (BTK) is a very mysterious enzyme that is still not fully understood, but its malfunctioning has been associated with blood-based cancers. This is specifically related to the pathway of a particular receptor called B-cell receptor, which is associated with the proliferation of B-cells. Given that we are right about these associations, BTK (which means BCR) is a good potential angle to target abnormal cell proliferation in B-cell malignancies. Pharmacyclics intends to try its BTK inhibitor Ibrutinib against the most prevalent B-cell malignancies - which includes multiple myeloma.
Pharmacyclics has made the most progress with its CLL (Chronic Lymphocytic Leukemia) indication. This particular program is moving into phase III trials. Multiple Myeloma is the laggard of the group, although I think that this program has big potential due to the unique mechanism of action. The company should be able to skip phase I development for this indication, which now leaves the phase II testing of the drug's actual efficacy in myeloma. Since we saw good data for CLL and other B-cell malignancies, I don't see why the development program for myeloma shouldn't be drawing interest.
Pharmacyclics has been doing well in recent trading, now trading at $66.96/share and a market cap of $4.76 billion. All the positive developments in the company have tripled the stock in the last year, which makes it a bit more expensive but does increase the safety of the stock to some degree. Investors are generally optimistic about ibrutinib.
3.) SNS01-T - leading the attack on a new potential oncogene, Senesco Technologies (SNT)
Senesco is an undiscovered name that caught my attention for two big reasons. One was the fact that Harlan Waksal was chairman of the board at the company (he is famous for creating ImClone - now a subsidy of Eli Lilly), as well as Christopher Forbes (of the Forbes family). CEO Dr. Leslie Brown also has a great track record.
The second was the fact that the company was brand new - at least in the sense that it only became a biopharmaceutical company a few years ago (2009). On top of that, the company had a very unique angle for the treatment of multiple myeloma. The eIF5A gene affects proteins that are integral to the process of apoptosis (programmed cell death). Malignant cells can replicate infinitely because of the destruction of the apoptosis pathway, which is made by nature to destroy cells that have "flaws" (like every cancer does). I think that eIF5A could be an extremely interesting target for all cancer types, although I don't think multiple myeloma was a bad first choice. Note that Senesco also intends to expand SNS01-T's indication to mantle cell lymphoma and other B-cell malignancies, along with myeloma.
Senesco is trading at $.13/share, and has a very low market capitalization of $15.2 million. Like Takeda, it is traded on the OTC market. The company's small size adds significantly to the volatility of the company, although I think that further developments for SNS01-T (now in phase Ib/IIa trials) could garner some new investor interest in the radically different therapy being developed by them. I also think the stock could see a return to the NYSE or NASDAQ in the future (it was on the NYSE but was controversially delisted in 2012). Note that Senesco is the most risky investment mentioned in this article due to the volatility of the stock and the small size of the company.
As stated before, there are many more drugs in development that I wish I could cover. This article offers only a taste of the developments being made in multiple myeloma, and I think that there is a substantial amount of money to be made as well. Also note that there is substantial variety - huge and small companies alike are looking for new ways to treat myeloma patients.
There are also few investments out there that can offer investors enormous ROI as well as knowledge that they are benefiting the welfare of patients all around the world. That has to count for something, right?
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.