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Monday Pfizer (NYSE:PFE) announced that Sutent failed to prolong survival of lung cancer patients when given in combination with Tarceva. The drug led to an increase in progression free survival (PFS), which was the secondary endpoint of the study. The results are not published and there are several open questions such as the extent of PFS improvement, benefit across different subtypes and use of Sutent in patients from the placebo cohort after progressing on Tarceva. Nevertheless, chances to see Sutent+Tarceva as a standard of care for 2nd/3rd line NSCLC are slim.

Pfizer’s failure provided some clarity for Arqule (NASDAQ:ARQL) and its partner Daiichi Sankyo (OTC:DSKYY), who plan to initiate a phase III study for ARQ-197 in combination with Tarceva. The indication Arqule is pursuing is very similar to that pursued by Pfizer, so had the Sutent trial been successful, it would have adversely affected ARQ-197’s prospects in general and potentially the required clinical route.

Although the Sutent study does not have a direct impact on the performance of ARQ 197 in the pivotal trial, it could have made things more complex. For instance, positive results could create a new standard of care, with direct implications on study design and availability of patients. As ARQ-197 trial design is being negotiated with the FDA for the sake of obtaining a special protocol assessment (SPA), a new standard of care might force Daiichi and Arqule to change the study as well as patient recruitment.

This demonstrates the inherent risk in drug development and how biotech companies can be affected by events on which they have no control whatsoever. In this case, it seems that the Sutent trial was the last phase III study evaluating an investigational agent for NSCLC in combination with Tarceva. Sutent joins the long list of drugs that did not show benefit in combination with Tarceva in lung cancer, including Avastin, Nexavar and multiple chemotherapy drugs. In that sense, Arqule is facing a great challenge, but unlike other drugs that failed, it is armed with a good (albeit not perfect) efficacy signal from a randomized phase II trial.

Pfizer’s pipeline of targeted therapies has experienced multiple setbacks recently. Sutent’s failure in lung cancer comes just several months after the discontinuation of another phase III trial in liver cancer. Earlier this year, Pfizer said it was postponing activity with tanezumab in osteoarthritis. Pfizer also terminated two phase III studies with its IGF1-R antibody, figitumumab, in lung cancer in late 2009 and early 2010, respectively.

One ray of light in Pfizer’s oncology pipeline is crizotinib, which is on its way to fast approval in a genetically defined subset of NSCLC patients. Another promising drug is tasocitinib, a JAK inhibitor with pivotal rheumatoid arthritis data expected at ACR this November. On top of the efficacy issue, a lot of attention will be given to the side effect profile of the drug. Incyte (NASDAQ:INCY), who is also developing a JAK inhibitor but with a different selectivity profile, will be affected by Pfizer’s data, but in this case, Incyte investors should hope for positive data from Pfizer.

Disclosure: Long ARQL, PFE, INCY

Source: Pfizer's Failure Provides Clarity for ArQule