Despite recent advancements in cancer treatment, brain cancer remains an area where there has been a dearth of innovative therapies. In this article, I will focus on new developments that DelMar Pharmaceuticals (OTCQB:DMPI) has made in the brain cancer glioblastoma multiforme (GBM), including recently presented data, and the implications for a potentially undervalued catalyst-driven story here. I will review data it recently presented at AACR and examine what investors should be expecting at ASCO.
First, some brief background: DelMar, which went public in a reverse merger in January 2013, is developing the small molecule VAL-083 for GBM. VAL-083 is being developed for glioblastoma multiforme, the most common of the primary brain tumors in adults. The drug was studied extensively by the NIH and is approved in China to treat leukemia and lung cancer. VAL-083 has been shown in previous studies to overcome specific drug resistance (to MGMT- methylguanine-DNA methyltransferase), which leads to poor prognoses for patients with recurrent GBM who are treated with front-line therapy of Temodar.
Market Opportunity: Current estimates by the National Brand Tumor Society puts the incidence at 2 to 3 per 100k in the US, which translates to 11,000 newly diagnosed patients per year. Of these, I estimate the addressable patient population at roughly 6,000, which represents the percentage of patients with resectable gliomas. In terms of pricing, cumulative pricing should approximate $80-100k annually, based on recently approved drugs such as Yervoy, which sells for $80k annually. Previous articles on Seeking Alpha have done a great service to the competitive landscape in GBM, so my aim here is to provide some highlights of DelMar's data and implications for the stock.
Implications: DMPI currently trades at a market cap of $67mm, and is up ~30% YTD. The marketed value of the drug as 3rd line alone could be >$200m, based on the failure of Temodar and Avastin as 1st and 2nd line patients. Once approved, potential development of an oral version of '083 could pave the way to a 1st or 2nd line agent, where it could capture part of the market estimated at $1 billion annually. While these milestones are still far off, recently presented and upcoming data offer further validation of the model, and the company's cash burn rate of $1.5mm annually, with $3mm private financing completed, gives it at least another 2 years of operating runway.
Good Early Data at AACR: DelMar has already presented some data from its ongoing Phase I/II study of VAL-083, at the American Association of Cancer Research conference in April of this year. The trial is a single arm, open-label study that began in November 2011. Patients in the trial must have recurrent malignant glioma or secondary brain tumors and must have already failed treatment with Avastin and Temodar. The data presented was for 9 patients, and there were no serious adverse events. Most importantly, 3/9 patients or 33% experienced either stable disease or a partial response. This is actually very promising data for two reasons:
· Avastin was approved as second-line therapy in this indication based on a 19.6% overall response rate, with a median duration of response of 3.9 months (according to prescribing information). '083 has already demonstrated a 33% response rate, and they are still in the dose escalation portion of the trial. This obviously must be confirmed in larger trials, but it is a promising start.
Patients in the trial have received doses ranging from 1.5-5 mg/m2, while '083 historical data suggests doses well over 25 mg/m2 may be safe. As DelMar escalates doses, they may see more responses.
New Data Catalyst: At ASCO, DMPI will release new data, as introduced in its abstract: Phase I/II study of dianhydrogalactitol in patients with recurrent malignant glioma or progressive secondary brain tumor.
According to the abstracts, DelMar will be presenting data from 11 patients, and patients enrolled later in the trial are receiving higher doses. This bodes well for '083 either maintaining or exceeding the current response rate of 33%. It does not appear that any new safety events have occurred, which is equally important as efficacy. Investors should have their eyes on DelMar's presentation at ASCO to find out if the new data continues the promising story of '083.
Competitors: Separately, one of DMPI's main competitors, ImmunoCellular Therapeutics (IMUC) (not presenting at ASCO) is on track with its phase IIb trial for ICT-107, which is for patients with newly diagnosed glioblastoma. IMUC should reach 32 patients for enrollment by 2H/13, and will announce final results by the end of 2013. Behind this lead candidate, IMUC has '121 for recurrent glioblastoma, which will begin dosing in 2H/13. Northwest Biotherapeutics (NWBO) is developing its brain cancer vaccine DCVAX-L for GBM, as has been extensively profiled on Seeking Alpha.
Implications and Summary: The market for GBM in the US is substantial, either $200m or $1b based on 3rd vs. 1st/2nd line treatment, and the latest '083 data, while still early in Phase I/II, is encouraging and validates the company's model. DMPI has enough cash to fund the next stage of trials, and could face a possible partnership or liquidity even ahead of the next round of data. With a market cap at $65mm, I believe this stock is still under most investors' radar.