By Dee Kotak, MD
Synta Pharmaceuticals (NASDAQ:SNTA) may be on to a best-in-class cancer treatment. Its lead candidate, Ganetespib, is a Hsp90 (Heat shock protein 90) inhibitor that is highly targeted, broadly active, and well-tolerated, with favorable safety. There's already supporting safety and efficacy data in a variety of cancers from over 600 patients in 20 clinical trials, but a final read-out from the ongoing Phase IIb GALAXY-1 trial in Non-Small Cell Lung Cancer (NSCLC) will occur this year and will be highly determinant of prospects from the upcoming, pivotal Phase III GALAXY-2, which will have top-line data at the end of 2014. The GALAXY-1 interim data from September of 2012 strongly suggests that Ganetespib has efficacy and that SNTA's strategy of focusing the therapy on the subgroups best able to derive benefit will heavily de-risk the Phase III GALAXY-2 study, resulting in an above-average chance of success for a late stage oncology program. SNTA's share price has been on a tear since May of 2012, rising from $4 to just under $12 in January of this year, but SNTA has pulled back into the $8-9 range, long-term resistance, which should now provide support ahead of upcoming catalysts. Although SNTA's market capitalization is $532M, the company owns 100% of worldwide rights to Ganetespib and has a run of catalysts from 1Q13-4Q2014, indicating increased visibility and momentum in the stock. Understanding Ganetespib, the Phase IIb trial data, and SNTA's focused clinical strategy make entry at current levels attractive given the numerous upcoming catalysts.
Ganetespib: Targeted Broad Action As a Hsp90 Inhibitor
There is an ever-increasing number of Tyrosine Kinase Inhibitors (TKI) on the market and in development. These drugs are focused on blocking single oncogenic pathways by inhibiting specific enzymes responsible for the production of particular oncogenic proteins. Heat-shock protein 90 (Hsp90) is a molecular chaperone that assists in the stabilization and maturation of a limited set of substrate proteins that are collectively referred to as clients. Many of the oncogenic proteins that various TKI's block are normally stabilized by Hsp90 acting as a chaperone. Hsp90 as a molecular chaperone is required for proper folding and activation of many cancer-promoting proteins. Ganetespib prevents Hsp90 binding to the client proteins and the inactive client protein falls apart and is degraded as opposed to being switched off by a TKI. Ganetespib, by inhibiting HSP90's action, leads to the degradation of a number of different client proteins and simultaneously inhibits multiple oncogenic pathways. Many of the client proteins of Hsp90, such as ALK, AKT, BCR-ABL, BRAF, EGFR, KIT, MET, FLT3, HER2, HIF-α, PDGFR and VEGFR are the targets of clinically validated cancer drugs such as Roche's Avastin and Herceptin, Novartis' (NYSE:NVS) Gleevec, Onyx's (NASDAQ:ONXX) Nexavar, Pfizer's (NYSE:PFE) Sutent, and Glaxo's (NYSE:GSK) Votrient. Ganetespib can also be used with drugs targeting specific gene profiles such as ALK, HER2 and RAF, or with drugs modulating tumor aggressiveness (angiogenesis, metastasis, repair/resistance). Animal works have shown that Ganetespib inhibits Hypoxia Inducible Factor Alpha (HIF-α), which drives many tumor aggressiveness properties, including metastasis. This has translated clinically, with data from the GALAXY-1 trial showing reduced progressive disease due to new lesion growth.
GALAXY-1: Positive Data for Ganetespib in 2nd-line NSCLC, and Outcomes Likely to Improve as Data Matures
Certain cancers such as late stage NSCLC, glioblastoma, hepatocellular carcinoma, pancreatic cancer, and esophageal/gastric cancer are very difficult to treat and have been highly unrewarding for a number of drugs. Late-stage NSCLC - stage IIIb/IV - is a very tough indication against which the results of Ganetespib efficacy will be viewed. Furthermore, the great strength of this study was the generation of a rich data set that led to a targeted approach in the GALAXY-2 study, which will start recruiting this year. Lung cancer is a heterogeneous disease, and SNTA has eschewed the old fashioned big pharma approach of running large trials on all comers to generate the hazard ratios necessary to demonstrate efficacy. SNTA has opted for a more sophisticated, targeted approach on a smaller trial population known to have the best response rates and lowest hazard ratio.
A number of subgroups were identified for analysis, as the trial had an operationally adaptive design, meaning that the results of the subgroup analysis were used to focus Phase III enrollment. Patients were classified into subgroups on the basis of pre-specified clinical and biomarker characteristics. In GALAXY-1, N=240 stage IIIb/IV adenocarcinoma, patients were randomized for second-line therapy one to one with docetaxel (standard of care) or docetaxel plus Ganetespib. On its first interim, the trial showed that patients with squamous cell carcinoma had a worse outcome with Ganetespib. The trial was modified to just NSCLC (remember the adaptive design), thereby eliminating 35-40% of patients who could not benefit.
Galaxy-1 Interim Results
Interim results from 172 patients were reported in September of 2012 at the European Society of Medical Oncology (ESMO). The median overall survival for docetaxel in 2nd line NSCLC is normally 7-8 months:
The objective response rate and progression free survival improved from 8% to 16%, and from 2.8 months to 4.2 months. Although these effects might appear small, they are clinically meaningful in this difficult to treat population. As a consequence of trial recruitment, many patients within the interim set had been followed for less than 6 months. If patients that had been enrolled for six months or more are analyzed, the data approaches statistical significance with N=77:
When this data set matures, there is a very good chance that statistical significance will be achieved. There are certain patients that will rapidly progress on whatever treatment they have, and so if the rapid progressors are eliminated, the patients >6 months after diagnosis of advanced disease (65% of the GALAXY-1 population) have more than encouraging statistics with a sizeable number, N=108:
The above data indicate that patients in this group were living 1.7 times longer than the control population. The Kaplan-Meier curves clearly diverged, indicating an OS benefit signal despite the fact that the median OS was not reached in the treatment arm. Patients were allowed other therapies, but any imbalance between the groups is very unlikely to be material given that the drugs used work in 1% or less of patients. Furthermore, the studies conducted in Eastern Europe were well audited and in-line with the two other geographic regions. Up to 60 additional patients with tumors exhibiting KRAS mutations and elevated baseline levels of LDH will be recruited to the trial (high medical need) giving a total of 300 patients. The GALAXY-1 study is 90% powered to detect a PFS improvement from 6 to 12 weeks in patients with elevated LDH, and from 5 to 10 weeks in patients with mutant KRAS. For all adenocarcinoma patients, GALAXY-1 is 88% powered to detect an improvement in PFS from 3 to 4.5 months, and 73% powered to detect an improvement in overall survival from 6 to 8.5 months. All powering assumptions are based on a one-sided alpha of 0.05. A final data read-out, including OS, will occur in the second half of this year.
GALAXY-2: Designed for Success
NSCLC stage IIIb/IV adenocarcinoma, excluding the rapidly progressing disease during or shortly after 1st line chemotherapy (diagnosed with metastatic disease <6 months), will be the trial population for the N=500 GALAXY-2 study of 2nd-line treatment with Ganetespib and docetaxel. It will have the same dose, schedule, regimen and regions as GALAXY-1. Extrapolating from the interim data from Galaxy-1, and assuming a hazard ratio of 0.4, GALAXY-2 need only be N=120, so N=500 will be well-powered and should be sufficient for FDA approval from a single, large Phase III study in an area of high unmet need. Below is a table of GALAXY-2 powering assumptions; the important take away is that there is a real possibility the trial is halted early for efficacy.
As well as reaching the statistical threshold for efficacy, the magnitude of the therapeutic benefit is also an important consideration for approval. Avastin sets the current benchmark as a first-line therapy with a survival hazard ratio of 0.8. The Ganetespib Phase III population that show enhanced survival (excluding fast progressors) and a hazard ratio of 0.37 allows considerable trial survival latitude. The approved second-line treatments Alminta and Taxotere have hazard ratios of 0.99 and 0.88 respectively. Ganetespib has shown a favorable safety profile and does not have the high occurrence rates of hepatic or ocular toxicities seen with other Hsp90 inhibitors. New major safety issues are unlikely to arise in the Phase III study given the 600 patients already treated.
Multiple larger indications beyond NSCLC
As a second-line agent in NSCLC, the market opportunity is about 160,000 new cases per year (US, EU5 and Japan), translating to a $2B+ opportunity. In lung cancer and other indications, Ganetespib may find a role in first-line (40,000-70,000 patients world-wide), second-line, maintenance, or combination therapy ($2-4B). The ability to combine Ganetespib with taxanes, like paclitaxel and docetaxel, with minimal additional toxicity and possible enhanced activity represents an opportunity for use in the 500,000 patients a year that receive taxanes. There is massive growth potential into breast cancer (HER2- or triple negative metastatic breast cancer of ~250,000 patients), prostate, ovarian, gastric, head & neck, and bladder cancer. In fact, advanced NSCLC might be one of the more difficult cancers to treat, so Ganetespib could demonstrate even greater efficacy in other indications. Studies sponsored by third parties include the use of Ganetespib in myeloma, acute myeloid leukemia and mesothelioma. Although SNTA also has a small molecule pipeline, investor interest and company valuation is focused almost exclusively on Ganetespib. The entire SNTA pipeline is unpartnered, and SNTA owns 100% of worldwide rights.
With about $100M in cash at the end of 2012, SNTA has a solid cash position and runway to take it beyond the end of 2013. SNTA completed a $60M offering in December 2012 and enjoys significant insider and institutional ownership. The short interest is 20% but likely reflects the high risk of oncology drug development rather than specifics to SNTA. The company will need to raise cash ahead of the top-line Phase III data next year, but the matured Phase IIb data will be available through 2013, as well as the occurrence of other catalysts, and it's likely that the share price will significantly appreciate as the investment community better understand the subgroup strategy, design, and de-risking of GALAXY-2, and the Phase III interims occur.
- GALAXY-1 6-month OS
- Interim analysis of first 20 patients in the CHIARA trial, which evaluates Ganetespib monotherapy in ALK+ NSCLC patients previously untreated with a direct ALK inhibitor
- Preliminary data from the ENCHANT trial, evaluating Ganetespib monotherapy for the treatment of HER2 positive and triple negative metastatic breast cancer
- GALAXY -1 PFS Final, GALAXY-1 12 month OS
- GALAXY-2 1st Interim OS
- GALAXY-2 2nd Interim OS, GALAXY-2 FINAL OS
Ganetespib is a potent, best in class Hsp90 inhibitor that has shown promising activity in a broad range of cancers, both as a monotherapy and in combination. The lead indication of advanced NSCLC is a $2B+ market opportunity, and Ganetespib may even have greater efficacy in cancers with larger market opportunities. The ability to combine Ganetespib with taxanes represents an opportunity for use in the 500,000 patients a year that receive these chemotherapy agents. SNTA is accruing a rich data set from GALAXY-1 that has informed the trial design for GALAXY-2 and increased the probability of a positive trial outcome. This new study is well powered, has a modest efficacy threshold for approval, with what we believe is a significant chance of being halted for efficacy at the second interim. As SNTA starts recruiting for Galaxy-2 this year, enough information will become available during 2013 from the ongoing GALAXY-1 trial to more accurately predict Phase III trial outcome, which should be reflected by an appreciating share price. The current $8-9 range represents a quality entry level and key support.
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