Seeking Alpha
Profile| Send Message| ()  

The ASCO annual meeting, one of the most important events in the pharmaceutical industry will take place in Orlando next weekend. With over 4,000 abstracts to be presented this year, separating the wheat from the chaff is difficult, but below is an incomplete list of intriguing trials that deserve investors’ attention.

Pfizer- personalized medicine at its best

Among the dozens of presentations Pfizer (PFE) has submitted, the most intriguing one is a phase I trial of PF-02341066 for the treatment of advanced cancer. PF-02341066 is a kinase inhibitor that hits two targets: Met and ALK. Initially, the drug was primarily defined as an inhibitor of MET, one of the hottest targets in oncology, due to promising data from Exelixis (EXEL) and Arqule (ARQL) who have the most advanced MET inhibitors. ALK, on the other hand, is a relatively new and less familiar target for drug development, but ironically, the “secondary” activity towards ALK is the reason for some exciting results from the trial.

Pfizer started the trial by enrolling cancer patients regardless of whether their tumors have a mutation in Met or ALK. After the maximal tolerated dose was reached, investigators accrued an additional cohort of patients, but this time only patients with tumors harboring Met or ALK mutations. Strikingly, the drug was highly active in patients with ALK mutations. According to the abstract, there were two partial responses (prolonged tumor shrinkage of at least 30%), both occurred in patients with mutated ALK, one sarcoma and one lung cancer patient. The drug had promising signs of activity in other lung cancer patients with the ALK mutation, with tumor shrinkage in 5 of the ten evaluable patients, in addition to the patient who achieved a partial response.

Judging by the impressive results, the pronounced activity creates a fast route to market as well as a substantial commercial opportunity. By pre-selecting the right patients, Pfizer was able to immediately reach clinical proof of concept and diminish the risk associated with drug development. This notion of identifying patients who are more likely to derive benefit from a given treatment is the hallmark of personalized therapy.

Pfizer will probably launch a larger trial for which only patients with ALK mutated tumors are eligible. Obviously, targeting discrete patient populations based on genetic profiling leads to shrinkage of the addressable market. On the other hand, this strategy increases chances of approval and following approval, the drug would enjoy high penetration and compliance among physicians and patients. In addition, in light of the controversy surrounding pricing of new drugs, it is easier for companies like Pfizer to charge more for a drug that works in the majority of a pre-defined target population as opposed to a drug that works only in a fraction of the overall patient population.

Starting with a niche indication does not necessarily limit the long term potential of a drug, as it is always possible to pursue label expansion to other patient populations. This strategy is particularly suitable for large companies which have the infrastructure and financial resources to pursue multiple indications simultaneously. In parallel to pursuing a swift approval for ALK mutated tumors, Pfizer will probably evaluate PF-02341066 for other of cancer types in multiple trials.

Even if the drug fails to produce good data in larger patient populations, PF-02341066’s current niche seems attractive enough, even for a pharmaceutical giant. According to several recent studies, ALK mutations occur in 3-5% of NSCLC patients. Given the high prevalence of the disease, the commercial opportunity in NSCLC patients with ALK mutations could easily top $0.5B, annually.

Interestingly, another study which analyzed ALK mutations in NSCLC patients will be presented at ASCO. According to the study, patients whose tumors harbor the ALK mutation have a poor response to Tarceva, the leading kinase inhibitor for advanced NSCLC. This might give PF-02341066 a competitive edge in these patients.

To my knowledge, this is the first validation of ALK as a target, but Pfizer must act quickly in order to have the first ALK inhibitor in the market. Additional ALK inhibitors are expected to enter clinical testing in the near future, including compounds by Novartis (NVS), Cephalon (CEPH) and Ariad (ARIA).

Curagen – Impressive activity in breast cancer

Curagen (CRGN) will present data from a phase II study evaluating its only clinical candidate, CR011-vcMMAE (CR011). CR011 is an antibody drug conjugate (ADC) that targets a protein called GPNMB, which has been recently implicated in breast cancer. It comprises a potent drug linked to an antibody that binds specifically to cancer cells and release its toxic payload once inside the cell. CR011 has already shown encouraging activity in melanoma, but the real catalyst could be results from a phase II study in breast cancer.

We decided to add Curagen to the biotech portfolio several months ago, after the company stated it was seeing early signs of activity in the trial. The abstract submitted by the company includes only preliminary results, but it certainly looks like Curagen’s drug has activity in breast cancer. The abstract reveals marked tumor shrinkage in two out of 10 evaluable patients. The first responder had a 51% shrinkage but shortly relapsed while the second responder had a 37% tumor shrinkage which was yet to be confirmed as an objective response due to short follow up.

Albeit preliminary, the results are extremely positive due to several reasons. The patients on this study represented a particularly challenging patient population with terminal stage, highly resistant disease. Patients who enroll to early stage clinical trials are typically patients who have been pretreated with several lines of approved treatments, but exhausted all available treatment options. The CR011 trial included patients who had received a median of 7(!) prior regimens, a high number even in comparison to other clinical trials in this setting. In addition, Curagen enrolled patients regardless of whether they express GPNMB, the target that CR011 binds. Tumors that do not express high levels of the protein will probably be less sensitive to CR011, similarly to the case with Herceptin and its target, Her2.

GPNMB is believed to be highly expressed only in a subset breast cancer cases (~25%), so statistically, the majority of patients cannot derive benefit from the drug. In light of this fact, tumor shrinkage in two out of 10 patients is highly encouraging. The abstract mentions that GPNMB expression was measured during the trial, so it would be interesting to see whether a correlation between response and expression level of the protein was observed.

Curagen will probably present results for additional patients at the conference itself. If CR011 signs of activity are observed in additional patients, Curagen, which owns the global commercial rights for the drug, could find itself with one of the hottest agents in the industry. The next step would be signing a lucrative partnership deal, in order to finance late stage clinical development.

Another stock that could benefit from strong CR011 data is Seattle Genetics (SGEN), who provided the underlying technology for this ADC. In addition, Seattle Genetics will have data from a phase I trial for its wholly owned ADC, SGN-35.

Click here for part 2

Source: Top Biotech Picks for ASCO 2009 (Part I)