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Memphis, Tennessee-based GTx, Inc. (NASDAQ:GTXI) is a 265M market cap biopharmaceutical company that is developing Ostarine (enobosarm), an androgen receptor modulator, which is in Phase 3 clinical trials for the prevention and treatment of muscle wasting in patients with non-small cell lung cancer (NSCLC).

GTx is also developing Capesaris, also known as GTX-758, an oral nonsteroidal estrogen receptor alpha agonist that is in a Phase 2 clinical trial for secondary hormonal therapy in men with metastatic castration resistant prostate cancer.

The company has preclinical development stage products that include inhibitors of steroid biosynthetic enzymes, anticancer therapies, estrogen receptor beta agonists, and other novel compounds for the potential treatment of cancer, metabolic diseases, ophthalmic diseases, psoriasis, and pain.

Ostarine

Astatine (enobosarm), a selective androgen receptor modulator (SARM) is a new class of non-steroidal, tissue-specific anabolic agents. These agents have the potential to increase muscle mass and improve physical function without the unwanted side effects on the prostate, skin or hair that are commonly associated with testosterone or non-selective, synthetic anabolic steroids.

The investigational drug is in Phase 3 clinical trials for the prevention and treatment of muscle wasting in NSCLC patients.

According to US Centers for Disease Control and Prevention (NASDAQ:CDC), lung cancer is the leading cause of cancer death and the second most diagnosed cancer in both men and women in the United States. In 2008, 14% of all cancer diagnoses and 28% of all cancer deaths were due to lung cancer. After increasing for decades, lung cancer incidence and mortality among men and women are decreasing, paralleling decreases in cigarette smoking.

Lung cancer is the most common cancer worldwide, accounting for 1.3 million deaths annually. Cancer accounted for 13% of the 58 million total worldwide deaths in 2004.

Approximately 373,489 Americans are living with lung cancer. During 2012, an estimated 226,160 new cases of lung cancer were expected to be diagnosed, representing almost 14 percent of all cancer diagnoses.

NSCLC is the most common type of lung cancer. According to the American Cancer Society, about 85% to 90% of lung cancers are NSCLC. Squamous cell carcinoma, adenocarcinoma, and large cell carcinoma are all subtypes of NSCLC.

Cancer cachexia, also known as cancer-induced muscle wasting begins early in the disease process, resulting in decreased physical function, fatigue and weight loss, which often results in a poor quality of life and shorter overall survival. There are no FDA approved drugs for the prevention and treatment of muscle wasting in patients with cancer.

At diagnosis, approximately 50% of advanced NSCLC patients have severe muscle loss. Muscle weakness and functional limitations are highly prevalent, with 88% of NSCLC patients reporting difficulty climbing stairs, lifting and carrying 10 pounds, walking a quarter mile, or stooping, crouching or kneeling.

Appetite stimulants and nutritional supplements may increase body fat, but these products do not increase muscle, improve physical function, or prolong survival in cancer patients. Researchers have also found that muscle loss is a predictor of performance status, tolerability to cancer treatment, progression free survival and overall survival.

In January 2013, GTx announced early that the U.S. Food and Drug Administration (FDA) granted Ostarine fast track status. Fast track status is a process designed by the FDA to facilitate the development and expedite the review of new drug candidates that are intended to treat serious diseases and have the potential to fill an unmet medical need. With a fast track designation, there is an increased possibility for a priority review of a new drug application (NDA).

GTx initiated Phase 3 clinical development plan for Ostarine with two clinical trials, "POWER1" and "POWER2" (Prevention And Treatment Of Muscle Wasting in CancER). In each of the placebo-controlled, double-blind clinical trials, approximately 300 patients with Stage 3 or Stage 4 NSCLC have been randomized to oral daily doses of placebo or enobosarm 3mg at the time they began first line standard platinum doublet chemotherapy. The studies are evaluating the responder rates of enobosarm versus placebo on maintaining or improving total lean body mass (muscle) assessed by dual x-ray absorptiometry and improving physical function measured by the Stair Climb Test as co-primary endpoints at three months of treatment. Durability of the drug effect is being evaluated as a secondary endpoint at five months of treatment.

Ostarine has been studied in eight previous clinical trials involving approximately 600 subjects, including three efficacy studies.

A four month Phase 2b trial enrolled 159 patients with NSCLC, colorectal cancer, breast cancer, non-Hodgkin's lymphoma, or chronic lymphocytic leukemia. Ostarine treatment compared to placebo resulted in a 1.4 kg increase in lean body mass and increased speed and power in the Stair Climb Test. There was no difference in deaths or serious adverse events among patients receiving placebo or Ostarine. The most common adverse events reported in the study were anemia, anorexia, fatigue, nausea and upper respiratory tract infections.

At the 2011 Annual Meeting of the American Society of Clinical Oncology (OTC:ASCO), GTx presented a subsequent analysis, which defined clinical benefit as a 10% improvement in stair climb power. Among the 61 patients with NSCLC enrolled in the Phase 2b clinical trial, 28 had stair climb power assessed at baseline and again at the conclusion of the study at 16 weeks. Researchers found that 78% of patients treated with Ostarine demonstrated clinical benefit, as compared to 30% of the patients receiving placebo. Researchers conducted a subsequent study that suggested that Ostarine treatment may offer a potential positive effect on survival in NSCLC patients with severe weight loss.

Although the trial was not powered to assess survival, in a post-hoc analysis, researchers found a 20% to 30% improvement in survival in the patients taking enobosarm.

Enobosarm was generally well tolerated, with the occurrence of serious adverse events and overall pattern of adverse events being much the same among placebo and treatment groups.

Capesaris

GTx is also developing Capesaris (GTx-758), an oral nonsteroidal selective estrogen receptor alpha agonist, for secondary hormonal therapy in men with castration resistant prostate cancer and, potentially, as a primary treatment for advanced prostate cancer used in combination with androgen deprivation therapy (ADT).

Castrate-resistant prostate cancer is cancer that is still growing despite the fact that hormone therapy is keeping the testosterone in the body at very low, "castrate" levels.

The National Cancer Institute at the National Institutes of Health estimates that there will be 238,590 new prostate cancer cases and 29,720 deaths from the disease in 2013.

It is believed that 10-20% of prostate cancer patients develop CRPC within approximately 5 years of follow-up.

Capesaris rapidly increases sex hormone binding globulin (SHBG) and reduces serum free testosterone. Free (unbound) testosterone is the only form of testosterone that is capable of diffusing through cell membranes to bind to androgen receptors in prostate cancer, and is thought to be the driving force for prostate cancer cell growth and the production of prostate specific antigen (PSA).

Capesaris has the ability to suppress the secretion of luteinizing hormone (LH) by feedback inhibition on the pituitary, which inhibits androgen production by the testes. This drug candidate also has the potential to prevent or ameliorate bone loss and hot flashes in men on ADT.

GTx's Phase 2 G200707 clinical study of Capesaris provide evidence that Capesaris increased sex hormone binding globulin (SHBG), decreased free testosterone and reduced serum prostate specific antigen, also known as PSA. In another recent Phase 2 clinical study. G200705, a significant reduction in free testosterone was observed in Capesaris treated subjects in comparison to those treated with Abbott Laboratories' (ABT) Lupron (leuprolide), a luteinizing hormone-releasing hormone (LHRH) agonist for the treatment of advanced prostate cancer in men with advanced prostate cancer who were hormone naive. The clinical trial was stopped early due to an increased risk of venous thromboembolic events ((VTEs)) at the high Capesaris doses used in these studies. However, clinical data from Phase 1 and Phase 2 studies suggested that significant increases in serum SHBG, and corresponding reductions in free testosterone, could be achieved with lower (125 to 500 mg) doses of Capesaris.

Data from previous clinical and preclinical studies have demonstrated the ability of Capesaris to increase the production of a protein called SHBG that reduces free testosterone levels. By reducing free testosterone, GTx believes serum PSA will be reduced in men with castration resistant prostate cancer. Based on its research, GTx believes Capesaris has the potential to reduce free testosterone without also causing certain estrogen deficiency side effects, such as bone loss, hot flashes and insulin resistance, which are common with current androgen deprivation therapies (ADTs) for prostate cancer. GTx also believes that Capesaris may be effective, in combination with ADT, as a primary treatment of advanced prostate cancer by reducing free testosterone to levels lower than what is attainable with ADT alone and potentially reducing the estrogen deficiency side effects caused by the use of ADT.

GTx has initiated a new Phase 2 clinical trial (G200712) to evaluate the safety and effectiveness of lower doses of Capesaris to treat men with metastatic castration resistant prostate cancer. In the study, 75 men with metastatic castration resistant prostate cancer will be randomized into one of three cohorts to receive a 125 mg, 250 mg or 500 mg daily dose of Capesaris. Each arm will have 25 subjects and the enrollment will be conducted sequentially, with the 125 mg cohort being the first to be enrolled. The enrollment into the next higher dose of Capesaris will commence if an acceptable incidence of VTEs is observed among randomized patients for 30 days following enrollment of the last patient in the previous cohort. The primary endpoint will be to lower serum PSA by greater-than or equal to 50% by day 90. Other key cancer endpoints include serum PSA progression, time to progression and progression free survival in these study subjects. The company expects to receive topline data from this study later this year.

Finances

On February 21, 2013, GTx reported a net loss of $10.7 million for both the quarter ended December 31, 2012 and the quarter ended December 31, 2011.

For the year ended December 31, 2012, the Company reported a net loss of $27.1 million, which included a gain of $18.8 million on the sale of the company's rights and certain assets related to Fareston (toremifene citrate) 60 mg tablets, which is an FDA approved treatment of metastatic breast cancer in postmenopausal women. The company sold Fareston to the ProStrakan Group plc, which is a subsidiary of the pharmaceutical company, Kyowa Hakko Kirin Co. Ltd.

The Company reported a net loss of $33.3 million for the year ended December 31, 2011, which included collaboration revenue of $8.1 million.

Research and development expenses for the quarter and year ended December 31, 2012 were $10.1 million and $38.9 million, respectively, compared to $8.9 million and $31.9 million for the same periods of 2011.

General and administrative expenses for the quarter and year ended December 31, 2012 were $2.9 million and $10.8 million, respectively, compared to $3.1 million and $12.0 million for the same periods of 2011.

At December 31, 2012, GTx had cash and short-term investments of $56.1 million.

Conclusion: Buy

GTx's expertise is in the discovery and development of novel, selective small molecules for the treatment of cancer, cancer supportive care, and other serious medical conditions. Both Ostarine and Capesaris address, difficult-to-treat conditions where there is an unmet medical need.

GTx's market research suggests that peak US sales from enobosarm (Ostarine) should be approximately $700 million to $750 million. This forecast does not take sales outside the United States or the potential for enobosarm to address muscle wasting in other diseases into account. GTx is planning additional clinical studies for enobosarm for indications where the company believes there is a good opportunity to expand the investigational drug's market potential. Not only is cancer cachexia an unmet medical need, but wasting occurs in many other diseases including acquired immune deficiency syndrome (AIDS), multiple sclerosis, congestive heart failure, tuberculosis, and other diseases.

The company's other product in clinical development, Capesaris, has the potential to reduce free testosterone without also causing certain estrogen deficiency side effects, such as bone loss, hot flashes and insulin resistance, which are common with current androgen deprivation therapies for prostate cancer. Capesaris may also be effective, in combination with androgen deprivation therapies, as a primary treatment of advanced prostate cancer. Capesaris could also potentially reduce the estrogen deficiency side effects caused by the use of androgen deprivation therapies.

On April 5, 2013, GTx stock increased over 7% after Stifel Nicolaus initiated coverage on the company with a "Buy" rating and a $7 price target, citing "a potentially significant value-creating event…with the pending Enobosarm Phase 3 data."

I concur, and also recommend GTx Inc. as a "Buy."

Source: Will 2013 Be A Big Year For GTx?