On March 30, 2011, the Centers for Medicare and Medicaid (CMS) released its draft decision memo, in which CMS proposes that the evidence is adequate to conclude “the use of autologous cellular immunotherapy with PROVENGE improves health outcomes for Medicare beneficiaries with asymptomatic or minimally symptomatic metastatic castrate resistant (hormone refractory) prostate cancer (CRPC)” (Dendreon Statement on CMS). More to the point, Dendreon’s (NASDAQ:DNDN) Provenge is reasonable and necessary for that indication.
It did not take the "nattering nabobs of negativism” long to pounce on both CMS and Dendreon for various and sundry reasons, either to defend the naysayers’ previous now-overturned predictions that CMS would limit significantly the use of Provenge, thereby limiting Dendreon’s out-year revenues, or to drive the price of the stock down, for any one of many nefarious reasons. I will not comment on the latter, but insofar as limiting the use of the treatment, CMS explicitly found the treatment “reasonable and necessary”. For example, Michael Yee, an analyst at RBC Capital Markets in San Francisco, noted: “This is a positive decision memo that clearly supports reimbursement for Provenge.” It also leaves “the door open to the local carriers to even consider, on a case-by-case basis, other possible off-label non-covered uses as well.” (Dendreon Prostate Cancer Drug Proposed in Medicare Coverage) To this end, two ongoing studies at Dendreon, NeoACT (Sipuleucel-T as Neoadjuvant Treatment in Prostate Cancer, Phase II trial) and PROTECT (Provenge for the Treatment of Hormone Sensitive Prostate Cancer, Phase III trial), will play pivotal roles in determining the efficacy of Provenge in earlier-stage disease settings.
Some, in looking forward, have decried the fact that Dendreon appears to have only Provenge in its kitbag at this time, and as a ‘one-trick pony’, lacks the robust pipeline that would give investors the confidence they need to invest in the company’s future.
Nothing could be further from the truth!
The pipeline of a pharmaceutical company is simply its ability to provide treatments for different disease types. In turn, from an investing point of view, a robust pipeline simply means a robust way to grow future revenue.
Now, note that prostate cancer has different stages that currently require different modes of treatment. In this sense, prostate cancer can be thought of as multiple disease types. Therefore, Provenge, itself, is a major part of the pipeline to grow revenue by achieving usage in different prostate cancer stages. In fact, as I will discuss next, this development has been at work for many years.
The current FDA-approved label for Provenge is to treat patients only in a subset of patients in their last stage of prostate cancer, Hormone-Refractory Prostate Cancer (HRPC), who already have distant metastasis. As mentioned, the phase III trial PROTECT is testing Provenge for an earlier indication, Androgen-Dependent Prostate Cancer (ADPC). Early data from PROTECT published in 2006 showed a statistically significant 35% increase in PSA Doubling Time (PSADT) and a 27% delay in Time To Distant Metastasis (TTDM). PROTECT is continuing to track data for TTDM as well as Overall Survival (OS). Both endpoints are event-driven. Although the company has not published when they expect sufficient events will be collected for TTDM or OS, I believe that for TTDM, the results could be seen as early as this or next year.
The CMS draft decision has pointedly not forbidden the off-label use of Provenge, and stated: “Thus we are hopeful that unlabeled uses in the near future will take place only in the context of bona fide clinical studies.” If the TTDM endpoint of the PROTECT trial indeed achieves statistical significance, that will provide solid evidence that Provenge is effective at stopping the disease in its track when patients are treated early, while their immune systems still are strong and not yet compromised by cancer. In turn, that could constitute “bona fide” evidence of Provenge working in ADPC and lead to CMS to allow off-label use of Provenge in this indication. The US market of Provenge can easily triple or grow even more if this outcome is realized.
Beyond Provenge, even a casual reading of the academic and popular literature reveals that Dendreon’s pipeline is the envy of Big Pharma. This pipeline is best summarized on Dendreon’s own Web site. And for those who think that what’s posted there contains bloated views of a management seeking to enhance the company’s share price, think again. Law firms are all too eager these days to attack public corporations through class-action lawsuits for even the slightest mistakes regarding statements made by corporations, their officers, and representatives.
So, what can be found on Dendreon’s site regarding its pipeline? (Product Candidates). First and foremost is Neuvenge to treat cancers testing positive for the Her2/neu antigen. Neuvenge, based on the same Dendreon’s Antigen Delivery Cassette™ Technology (Glossary) used to develop Provenge, was originally developed for breast and ovarian cancers. After two successful phase I trials, testing of Neuvenge was stopped when Dendreon was forced to focus its limited resources on running IMPACT, the pivotal trial of Provenge. With Provenge now approved, the development of Neuvenge has been restarted. An Investigational New Drug (IND) application for trial DN24-02 was filed in December 2010 with the U.S. Food and Drug Administration (FDA). DN24-02 is a blinded randomized Phase II trial to evaluate the safety and efficacy of DN24-02 in patients with HER2+ invasive transitional cell carcinoma (TCC) of the bladder following cystectomy. (Announcement)
In addition to Neuvenge, Dendreon has in-licensed two additional antigen targets, carbonic anhydrase IX (CA9) and carcinoembryonic antigen (CEA), for the development of active cellular immunotherapy (ACI) candidates for various cancers including kidney, colon, cervical, lung and breast cancers. Dendreon management has repeatedly stated on its conference calls that the corporation intends to file one new IND each year with the FDA for a new indication employing its Antigen Delivery Cassette™ technology.
Beyond development efforts involving its proprietary cassette technology is the corporation’s work on TRPM8 (also known as TRPP8), a calcium ion channel triggered by cold temperatures, menthol, and other small molecule agonists. (TRPM8). When you hear the term ‘small molecule’, think ‘pill’. What we have here, then, is nothing less than a treatment focused on an oral agent for treating cancer! Phase I trials for TRPM8 were initiated in the spring of 2009 (TRPM8 - Phase I Initiation). The lead investigational molecule, D-3263 HCL, is for patients with solid tumors.
The information above should give serious investors the information they need to begin their due diligence. Meanwhile, in ways that seems to emulate the management philosophy and methodology I so long observed in the officers of another very successful go-it-alone biotech, Gilead Sciences (GILD), Dendreon’s corporate officials simply go about their business, say little, execute their plan, and enhance shareholder value. European Plans for the commercialization of Provenge continue apace, with the company expecting that data from the IMPACT study, supported by data from D9901 and D9902A, will be sufficient to seek regulatory approval in the EU Further, Dendreon plans to use the clinical data described in its U.S. Biologics License to file its marketing authorization application (MAA) to the European Medicines Agency (EMA) in late 2011/early 2012. The company anticipates a regulatory decision in the first half of 2013.
If Big Pharma is looking over its shoulders and wondering who is about to pass it by in the treatment of cancer, it look no further than the upstart in Seattle, Washington: Dendreon Corporation…the Little Engine that not only could, but did!
Disclosure: I am long DNDN.
Additional disclosure: I will not alter my existing position in DNDN for 24 hours from the time of publication.