Tough Decisions for Antigenics

News that the European advisory committee will adopt a negative opinion next month on Antigenics’ (AGEN) kidney cancer vaccine candidate, Oncophage, not only hurt their shares by 42% Wednesday, but raised questions over where the biotech company can go from here.

Although Oncophage has been approved in Russia, that was 18 months ago and the vaccine has yet to be released onto the market. In addition, the FDA has requested additional clinical trials be conducted before they would consider approving the vaccine. Established in 1994 and having spent $293 million on R&D since the company went public in 2000, and with 17 pipeline candidates already on the scrap heap, Antigenics is clearly experiencing desperate times, which may call for desperate measures.

Hopes dashed

Wednesday’s share price dive to $1.21, valuing the company at $108 million, has largely wiped out the gains made earlier in the year when a subset analysis of phase III trials, which had missed their primary endpoints, showed an improved survival benefit in patients with a low risk of recurrence of kidney cancer.

Having touched record lows of just 31 cents in March, the stock made significant gains on the back of the ASCO data, and perhaps renewed confidence of a positive European review of Oncophage, to reach a two-year high of $2.99 in July.

However, as EP Vantage pointed out at the time, a number off hurdles remained, not just for Oncophage but cancer vaccines in general.

Tortuous path

Whilst the development of cancer vaccines has certainly attempted to break new ground in ways to treat cancer and understandably accounted for a number of developmental casualties, Oncophage in particular has had a long and arduous history.

According to archive consensus forecasts from EvaluatePharma, way back in Janaury 2003 analysts had been hopeful that Oncophage would reach the market in 2004 and generate sales of around $300 million by 2007.

However, delays to the phase III trials, impacted by an FDA clinical hold late in 2003 and which ultimately proved unsuccessful in 2006, put paid to these expectations. Aside from the trials in kidney cancer, Antigenics has conducted clinical studies of Oncophage in no fewer than ten other cancer indications without success.

Although Antigenics continues to make positive noises about the vaccine’s chances of eventual success in kidney cancer, hopes may now rest with ongoing phase II trials in recurrent and newly diagnosed glioma, over which both the FDA and EMEA have granted orphan drug status.

The problem for Antigenics is that increasingly all their eggs have been put into the Oncophage basket, regularly abandoning other pipeline candidates in the hope that the vaccine will come good eventually.

The only other “candidate” in the pipeline is QS-21, a vaccine adjuvant which has been licensed to multiple companies for inclusion in their vaccines. Although the likes of GlaxoSmithKline (GSK), Sanofi-Aventis (SNY) and Johnson & Johnson (JNJ) are using QS-21 in some of their vaccine candidates, any potential economic return to Antigenics should any ever reach the market is likely to be minimal and certainly leave the company a long way short of recouping their R&D spend of recent years.

Tough decisions

The one thing that Antigenics does have on its side is a relatively healthy cash reserve of around $40 million which at current run rates should last until the end of next year or into 2011.

Aside from the potential commercialisation of Oncophage in Russia, which continues to remain uncertain, with just the phase II glioma trials ongoing costs are likely to be kept in check. In February, Antigenics cut 20% of its staff, or 19 employees, in an effort to conserve cash.

As such, the company is now facing some tough decisions as to whether to continue to support the development of Oncophage, given the bleak regulatory prospects in the US and Europe. Or perhaps it can use what cash it has to license a more promising pipeline asset, or seek a strategic partnership with a similarly sized company that may also have run down a developmental cul-de-sac.

However, before Antigenics makes these big decisions, it will no doubt be keeping a close eye on the outcomes of a workshop to be held next week, by the FDA and the National Cancer Institute, on the development of therapeutic cancer vaccines. The focus will be on taking the lessons learnt from completed phase III trials to come up with optimal design for earlier stage studies.

These discussions could help convince Antigenics to stick, twist or fold on throwing more money at Oncophage.

Comments

[dreamdivers:]

Thanks, nice objective article. Nicely balanced, details both positives and negatives, unlike the usual promotional puff pieces. Well done.

Oct 22 12:49 PM

[Biotechs_Maven:]

A Refreshing View on AGEN !

Great Article !

Oct 22 06:17 PM

[louhazosc:]

Unfortunately in order to accomplish an attempt to meet European approval, Antigenics did in fact "put all their eggs in one basket". This also includes several cuts made on their scientific research roster. Basically put it all behind what they had, not what they might have. So the hail mary pass didn't work. Of course there is the appeal but realistically that does not look promising. QS-21? Another high hope. Thank you for the write up

Oct 24 04:51 PM