Exelixis: Going Where No Drug Has Gone Before

Feb.23.11 | About: Exelixis, Inc. (EXEL)

Last week, Exelixis (NASDAQ:EXEL) presented updated results for its lead agent cabozantinib (also known as XL184 or “cabo”). Cabo had become a closely watched agent last year after demonstrating unique and unprecedented activity in prostate cancer patients, leading to either partial or complete resolution of bone scans in 19 out of 20 patients. This effect had never been seen with any of the approved or investigational agents for prostate cancer, leading to widespread enthusiasm but also some skepticism.

Following last week’s data, it is now safe to say cabo has a real effect on bone metastases. The data set included 100 response evaluable patients, 62 of whom were evaluable for bone response. 85% of these patients experienced partial or complete resolution of their bone scans (the bone mets shrank or disappeared), 13% had stabilization and 2% (1 patient) had progression. Cabo had a profound effect on bone pain as well as markers for bone metabolism, implying the drug also has potential utility for treating bone related complications.

It is important to note that traditionally, bone metastases are not included in response evaluation for solid tumors, as standard response criteria apply only to tumors in other organs (soft tissue disease). Based on those criteria, cabo led to a modest response rate of 6%, with the majority of patients (82%) achieving stable disease as their best response.

Broad implications

Bone metastases are a hallmark of many types of cancer (lung, prostate, breast, renal) and in many cases lead to death either directly or indirectly. In addition, bone metastases are associated with severe quality of life issues such as fractures and pain, representing another unmet need. The clear (albeit less profound) effect XL184 has on soft tissue lesions adds a third layer of potential clinical benefit.

Patients with bone metastases are treated with two classes of drugs. Anti-cancer drugs act on soft tissue tumors but rarely shrink bone metastases. For the bone component, physicians can only offer drugs that treat symptoms and complications but none of them has a direct effect on existing bone mets. As the first drug that might treat bone mets rather than their symptoms, cabo has the potential to revolutionize treatment of cancer and complement existing regimens.

The bone mets effect appears to be broad, and not limited to prostate cancer. According to the company, similar bone scan resolutions have been observed in breast, lung and renal cancer patients. In all of these indications, cabo’s immediate potential is in patients with existing bone metastases, a multi-billion opportunity worldwide. Cabo could also be beneficial as preventative treatment in patients who are at risk of developing bone mets, an even larger opportunity.

Cabo’s complementary clinical profile puts it in a favorable position, as it is not necessarily competing with approved anti cancer drugs. Ideally, cabo should be added to existing therapies for achieving systemic effect on both soft tissue and bone lesions. Nevertheless, combining cabo with other agents is not trivial, as the drug has safety issues that might be a barrier for widespread adoption.

Path to registration

Exelixis decided to focus on prostate cancer, a reasonable choice given the large body of clinical evidence and the pivotal role bone metastasis has in this disease. The company plans to initiate 3 pivotal trials, each in a different patient population using a different pre-specified endpoint for approval.

Trial #1 -The first trial will focus on cabo’s effect on bone scans and pain. Therefore, patients on this trial will have positive bone scans and inadequate pain control. The primary endpoint for this trial will be a composite endpoint of bone scan improvement and pain score, which is still not clearly defined. According to the company, it intends to take the data it has to the FDA and use the feedback received for carving out an approvable endpoint. This study will include a lower dose of cabo in order to understand whether a comparable benefit can be achieved with a more tolerable dose.

Trial #2 - The second trial will be more conventional, evaluating cabo’s effect on overall survival in metastatic prostate cancer patients who stopped responding to hormone therapy. Overall survival is probably the strongest and most reliable endpoint for approval in this setting, however, the main question with this trial is whether the dramatic effect on bone lesions translates into a survival effect. Given the central role bone mets play in prostate cancer and the association with mortality, a survival effect seems likely. The trial design (control arm, prior therapy) is still unclear.

Trial #3 - The third trial will look at cabo’s ability to delay the appearance of bone metastases in pre-metastatic prostate cancer. The primary endpoint in this trial will be metastasis free survival (MFS), which is the time until a patient develops metastatic disease. Amgen (NASDAQ:AMGN) recently announced positive data in this setting with Dmab, which demonstrated a 4 month improvement in bone-MFS over placebo. This did not result in an overall survival benefit, further demonstrating that Dmab is not an anti-cancer drug. Obviously, cabo appears better positioned in this setting given its dramatic activity on existing bone mets but again, cabo’s effect in this setting is still unexplored, let alone the impact on survival. This setting will require lower doses or less frequent administration and it is still unclear how this will affect the drug’s activity.

At the moment the studies are planned with single agent cabo, but the company intends to evaluate the drug in combination with other agents. This is an obvious direction given the complementary clinical profile (both safety and efficacy) cabo has with other approved drugs.

Risks and open questions

Notwithstanding cabo’s promising results to date, this program is still risky. Paradoxically, cabo’s unique and unprecedented activity also adds risk to the program as Exelixis is entering uncharted waters with many open questions.

To begin with, it is unclear what is the clinical outcome of the bone mets effect, especially in terms of survival and bone related complications. This is primarily relevant for trial #2, which will have overall survival as an endpoint. A key regulatory risk is the uncertainty around what the FDA will require for approval in trial #1. The company intends to use a composite endpoint of bone scan resolution and pain reduction, which are rather tricky endpoints without clear quantitative metrics that define response. Another issue is concordance between bone and soft tissue response, for example, will a patient with resolving bone mets but soft tissue growth be defined as responder?

With respect to the drug’s clinical profile, safety and durability of response are key issues. In the prostate cancer study, 51% of patients had one or more dose reductions due to side effects (primarily fatigue and weight loss). It appears that the drug was active also in lower doses but the extent of activity is unclear. This is particularly important for trial #3 in non-metastatic patients as well as for future combination trials. Durability of the bone effect was not provided at the conference, even though according to the company, to date, very few patients progressed on the drug but no concrete numbers were given.

Another theoretical risk comes from other agents with similar spectrum of activity. Cabo inhibits multiple targets and it is still unclear which targets are responsible for the bone mets effect. At the moment, the primary suspects are VEGFR2 and MET. If this is the case, other drugs with overlapping inhibition spectrum might also be effective, including a drug that was licensed by Exelixis to Glaxo (NYSE:GSK) and a drug in development by Bristol-Myers (NYSE:BMY). Some companies might even combine two kinase inhibitors to mimic cabo’s effect, as one of my readers suggested in the comment thread. If the activity is derived from the targets above, combination of two highly specific drugs such as Arqule’s (NASDAQ:ARQL) MET inhibitor and AVEO’s (NASDAQ:AVEO) pan-VEGFR inhibitor might have a better safety profile. It is important to note this kind of competition is strictly theoretical and in any case, Exelixis still has a first mover advantage.

Looking beyond prostate cancer

On top of the prostate trial, Exelixis is evaluating cabo in several indications as part of a large randomized discontinuation study. Updated data is expected later this year at ASCO. The drug’s efficacy will be evaluated on two fronts. First, it will be interesting to see how profound the bone mets effect is in additional indications beyond prostate cancer. It is clear, based on investigators’ remarks, that there is a bone effect in breast, lung and renal cancers. The second efficacy readout will be from the randomized portion of the study, where patients with initial stable disease are randomized to placebo or cabo. In particular, it will be interesting to see if the preliminary activity in ovarian cancer reported last year is mirrored by the randomized portion of the study. Bone mets are quite rare in ovarian cancer, so in this case cabo’s effect is exclusively on soft tissue lesions.

A trial in renal cancer could also be reported in the coming months. Based on remarks during the company’s R&D day and examples presented last week, it appears that cabo is also very active in heavily pretreated patients. The activity was seen on both bone mets and soft tissue lesions.

Pivotal data this year

Exelixis is expected to report results from a registration study in medullary thyroid cancer (MTC) in the very near future. This is a very small indication Exelixis was hoping to use as a fast route to market. Chances for favorable data in this indication are substantial based on good single arm activity as well positive data for AstraZeneca’s (NYSE:AZN) vandetinib, as the two drugs share common targets. The commercial value for this indication is marginal, especially in light of vandetinib’s expected approval for this indication this year.

Two interesting points that may stem from approval in MTC are potential off label use and marketing rights for cabo. The enthusiasm surrounding cabo’s bone mets activity may lead to off label use in much larger populations such as prostate and renal cancer. This will have a dramatic effect on cabo’s sales already next year but it might also limit Exelixis’ ability to demonstrate a survival advantage in future trials due to subsequent cabo use in the control cohorts. If the drug becomes approved for MTC, Exelixis will also have to decide who is going to sell the drug in the US and in Europe and structure a licensing deal accordingly.


The preliminary data provided to date puts cabozantinib in an excellent position to revolutionize the way bone metastases are treated, going where no drug has gone before. For the first time, there is a drug with clear activity on established bone mets, which represent a highly unmet need. Needless to say, there are still various clinical and regulatory risks associated with this drug, which is just entering late-stage trials. Nevertheless, the unprecedented activity coupled with a huge untapped market opportunity makes Exelixis a BUY even with a market cap of over $1B.

Disclosure: I am long EXEL.