In October 2009, Onyx (ONXX) paid $276 million up front to acquire the privately held Proteolix to get to its multiple myeloma drug carfilzomib. It promised $535 million in future payments largely contingent on carfilzomib's approval. As usual, investors did not like Onyx paying money, because investors do not like any company to pay money to develop or acquire state-of-the-art products. When somebody hates something he sees everything in it with pessimism. Onyx put its hands on carfilzomib, which looked very promising for multiple myeloma cases resistant to current treatments. The breakthrough multiple myeloma drugs Velcade (bortezomib) and Revlimid (lenolidamide) could not prevent the cancer from recurring and failed to work at all on a large percentage of recurrent cancer.
Carfilzomib is the second proteasome inhibitor; these drugs work by interrupting a key enzyme cancer cells require to survive and multiply. Velcade, developed by Millennium Pharmaceuticals that was acquired by Takeda, was the first proteasome inhibitor approved. Carfilzomib was developed to be more potent than Velcade and cause milder side effects, particularly the numbness and nerve pain that are well-known issues with Velcade.
Since the decision to acquire Proteolix leaked, ONXX lost momentum, as investors’ skepticism was capable of neutralizing all the firm’s good news from the clinical trials of carfilzomib and from Nexavar, its kidney and liver cancer drug. Every time the stock attempted to rally on good news, it gave back its gains and lost more than it had added until it was boxed around $20, down from a 52-week high of $36.59.
Monday, the news announced that Onyx made a decision to go ahead and seek regulatory approval for its multiple myeloma drug carfilzomib based on strong results from a pivotal study demonstrating that carfilzomib was able to induce a clinically meaningful tumor response in 24% of multiple myeloma patients with a median duration of response of 7.4 months, according to study results that were independently verified and released by Onyx. The big news here is that the multiple myeloma patients who responded to carfilzomib had cancers that were minimally responsive or not responsive at all to current drugs, including Velcade and Revlimid. These patients had already been treated with a median of five prior lines of therapy. Their cases were hopeless.
As Onyx CEO Tony Coles put it, "If you look at the natural history of relapsed and refractory disease, only about 11% of patients would be expected to respond. Well, we more than doubled that." Carfilzomib patients showed a response rate of 24%.
Onyx will file for carfilzomib's approval with the FDA before the end of the year, Coles said. The company will seek FDA accelerated approval.
Dr. Ken Anderson, chief of the hematologic cancer division at Boston's Dana Farber Cancer Center said, "I'm encouraged by the extent of the response, the durability of the response and the lack of side effects."
We at Prohost do not believe there is any possibility that the FDA would condemn the drug, as some are propagating, because the study is a single arm. It simply does not make sense. The patients who responded to carfilzomib were subjected to the best available treatments for multiple myeloma, and the drugs had not worked for them. Velcade and Revlimid should well represent the missing (unneeded) arm.
The 24% response rate and almost 7.5 months median duration of response from carfilzomib should be sufficient to convince the FDA of the extra value of carfilzomib compared to the current treatment regimens. Wasn’t Velcade approved on a 28% response rate from a single-arm study? As a matter of fact, carfilzomib was developed to be more potent than Velcade with reduced side effects.
Dr. Coles said, "Monday's results are really good news. It validates our growth strategy and why we acquired Proteolix in the first place."
Disclosure: Long ONXX.