This is the second part of an article I posted back in April. The final list includes only 9 candidates in total, as one of the candidates (Seattle Genetics’ SGN-75) was taken off the list after generating fairly disappointing results at ASCO.
Micromet (MITI), who is developing antibodies for cancer, definitely has a potential game changer in its hands. The company’s lead agent, blinatumomab (Bmab), belongs to a new class of antibodies called BiTE (Bispecific T cell Engagers). These antibodies harness the patient’s immune system to attack tumors by redirecting T cells-- the most potent immune cells in the body-- against cancer cells. BiTE antibodies achieve this by simultaneously binding a cancer cell on one side and an immune cell on the other. This unleashes a potent anti-tumor immune response.
Bmab is Micromet’s lead BiTE antibody, currently in pivotal phase II in acute lymphoblastic leukemia (ALL). Due to the unique properties of Bmab, Micromet decided to evaluate this antibody in a setting where the disease is cleared from the blood, but there is still a small amount of leukemia cells in the bone marrow (minimal residual disease or MRD). This setting is perhaps the most crucial setting in the natural history of ALL, as MRD cells ultimately lead to disease relapse and death. Therefore, eliminating them as part of front line therapy could have a real impact on patient outcome, as shown in several studies.
Earlier this year, the company published final results from a 21 patient trial evaluating blinatumomab in MRD+ ALL. The antibody converted 16 of the 21 patients to MRD negative status, an impressive achievement given the fact most of these patients could not reach this status with prolonged regimens of aggressive chemotherapy. Most importantly, all 16 patients enjoyed durable hematologic remissions (no disease in the blood), with a relapse free survival rate of 76% after over a year. This represents a dramatic improvement compared to historical data, even though this was a small single arm trial.
The ongoing pivotal trial, which is taking place mainly in Europe, is very similar to the phase II trial. It is also a single arm trial with MRD conversion as the primary endpoint in 130 patients. The fact that the European regulators agreed for this design validates the clinical relevance of MRD conversion as an endpoint. The similarity with the first phase II trial also bodes well for eventual approval (at least in Europe) based on the ongoing pivotal trial.
Last month, Micromet presented an even more impressive data set, this time in relapsed / refractory ALL patients. Unlike MRD+ patients, who have only disease remnants in the bone marrow, these patients have full blown disease and have a very dismal prognosis. Of 12 evaluable patients, 9 (75%!!!) achieved a complete response, which included disappearance of leukemic cells from the blood and more importantly from the bone marrow (conversion to MRD negative). Despite the low number of patients, this degree of responses in heavily pretreated patients is very unusual and cannot be reached with the most aggressive chemo regimens.
Although Bmab appears much safer than alternative approaches for these patients, the antibody led to a notable amount of toxicity in some patients. It appears that investigators found a way to mitigate most of the side effects using an alternative treatment regimen and pretreatment but this has to be validated in future trials. In December, the company is expected to present an update which will include more patients as well as durability of responses.
It is hard to stay unmoved by the ALL data from the two studies, which position Bmab as a phenomenal drug for patients who have very few treatment options. More importantly, Bmab is one of the few drugs that actually have the potential to change the entire treatment landscape of ALL and induce durable remissions and even cures in some patients. This again exemplifies the unique profile of cancer immunotherapy, which could have a dramatic impact for certain patients and not just extend survival by a few months.
Micromet is enrolling patients in a pivotal trial in MRD+ ALL, which is expected to have data in 2013. This could support registration in Europe and potentially in the U.S. Next year the company intends to start another pivotal trial in relapsed / refractory ALL. Although no details were released, it is easy to assume that given the unmet medical need and the impressive activity, a fairly small and short trial could be the basis for accelerated approval in the U.S. and Europe.
The direct market opportunity for MRD+ ALL is limited (~1500 patients per year in U.S.+EU). Even assuming the premium pricing for orphan disease drugs, the commercial opportunity is in the $150M-$250M range. Label expansion to relapsed / refractory ALL could double sales (depending on the amount of cannibalism between the two indications). Migration to first line ALL-- where there is still no data-- or to pediatric ALL (very good anecdotal data), which is more prevalent than adult ALL, could easily bring the market opportunity to $1-1.5B, depending on label and penetration.
Blinatumomab has also generated excellent data in NHL, which is a multi-billion $ indication. However, the heterogeneous patient population and multiplicity of treatment options make this indication very difficult to navigate. Unlike ALL, where there are very few promising agents in development, Micromet’s blinatumomab will have to compete with highly effective oral agents from Pharmacyclics (PCYC) and Calistoga (recently acquired by Gilead (GILD)). One option for Micromet to differentiate itself in NHL is by pursuing blinatumomab for NHL patients with MRD, similarly to the ALL program. The importance of MRD is becoming widely accepted as an important factor for evaluating benefit and prognosis (see this 2010 paper as an example).
Although the company has not guided for any partnership deals around Bmab, Micromet could license Asian rights for the program or do a lucrative co-development deal. At the moment there is no pressure on the company to bring additional funds, as it has the resources to pursue approval in ALL. In order to accelerate development in NHL-- which requires a lot of resources and a large footprint-- a licensing deal is inevitable, the only question is when.
Micromet and its partners are developing several other BiTE antibodies. MT110, wholly owned by Micromet, is currently in phase I in solid tumors. In contrast to blood cancers, where the BiTE platform is considered validated, it is unclear whether it is suitable for solid tumors. The main obstacle is the need to administer higher doses, which might lead to severe side effects. The market still awaits initial proof of concept and it is hard to predict if and when this will happen, as each target will probably result in a unique clinical profile.
Pharmacyclics’ (PCYC) lead agent, PCI-32765, is in mid-stage development for a variety of blood cancers. To date, the drug has generated impressive results, mainly in CLL (chronic lymphoid leukemia) and MCL (mantle cell lymphoma). Although there are several effective treatments for these indications, most patients cannot be cured and require new treatment options. On top of its strong efficacy, two important advantages of PCI-32765 are its excellent safety profile and the fact it is given orally. These could be important differentiators as there is now more emphasis on maintaining quality of life throughout the different treatment lines and not just treating the disease. This is particularly relevant for elderly patients, or patients who cannot tolerate chemotherapy.
At ASCO last month, the company presented results from a phase II trial in CLL. The drug demonstrated impressive activity, with a response rate of 67% and 48% in 1st line and pretreated patients, respectively. The drug initially leads to an increase in leukemia cells in the blood, originally viewed as an alarming sign that could be interpreted as disease progression. But as patients were followed up it became apparent that this phenomenon is part of the drug’s mode of action. The data at ASCO was very important in showing that the spike in the blood was actually a good and transient sign for activity. A similar profile was observed with Calistoga’s drug as well.
The company also presented results from the phase I NHL trial, where 7 out of 9 (78%) mantle-cell lymphoma (MCL) patients and 6 out of 13 (46%) follicular lymphoma patients responded to the drug. Responses appear to be durable, although larger trials are obviously needed. It remains to be seen whether larger trials will corroborate these results, but even a response rate of ~50% should be viewed as very promising, especially in light of the mild safety profile.
PCI-32765 is currently in three phase II trials as single agent in CLL, MCL and diffuse large B cell lymphoma (DLBCL). Results from these studies will guide Pharmacyclics in defining a registration path.
The CLL study is recruiting relapsed / refractory patients or elderly patients who had no prior treatment. The MCL trial will enroll 100 patients who will be stratified based on prior treatment with Velcade. Velcade was approved for MCL in 2006 and is the only agent approved specifically for this indication, although many other regimens are regularly used. If PCI-32765 proves highly effective in Velcade failures, this might open the door for accelerated approval based on a single arm study. As a benchmark, Velcade was approved based on a response rate of 31% and time to progression of 6 months in a single arm phase II in 155 MCL patients. Since the FDA has become more stringent regarding accelerated approvals, it might take more than that to get PCI-32765 approved based on a single arm trial.
The DLBCL trial is much more risky than the CLL and MCL studies. DLBCL is a highly aggressive type of NHL and is considered the most attractive market due to its size and the unmet need. Pharmacyclics will stratify patients into two groups based on their disease subtypes (ABC and GC). The company hopes to see more robust efficacy in the ABC subgroup, which has more aggressive disease and is believed to be more dependent on the target PCI-32765 inhibits.
Pharmacyclics concluded Q1 of 2011 with $54M in cash, which should support the ongoing phase II program together with several combination studies. Nevertheless, advancing PCI-32765 towards approval in CLL and MCL will require a broad development program. The company could leverage the ASCO data to strike a partnership deal for the ex-U.S. rights for the drug or wait for the next major catalyst: Data in Velcade-pretreated MCL patients. This is the only study which has a reasonable chance to define a path for accelerated approval using a relatively small single arm study.
Synta’s (SNTA) lead agent, ganetespib, is currently in a broad phase II clinical program in multiple tumor types. Ganetespib inhibits Hsp90, a protein involved in the stabilization and proper folding of proteins. Although Hsp90 is believed to have a pivotal role in various cancers, it still remains an elusive target for drug companies for various reasons (discussed here and here). Today, based on data from Synta and other companies, it appears that Hsp90 inhibitors are finally ready for prime time.
Synta has the most advanced Hsp90 program in development with over 10 phase II studies across various indications. To date, ganetespib has demonstrated signs of activity in cancer patients with lung, breast, colon, gastric and skin cancers. In some cases, the drug led to dramatic and durable tumor regressions in patients with very aggressive disease. Nevertheless, these responses were observed only in a small minority of patients, which is typical of targeted therapies that are viewed as more subtle and cytostatic (as opposed to cytotoxic).
Because tumor shrinkage does not reliably reflect the real anti-cancer potential of targeted therapies, they require two complementary approaches for development. The first component involves selecting patients who are more likely to benefit from the drug based on the biology of their tumors. This approach limits the addressable market but creates a fast route to market with high likelihood of success. For unselected patient populations, targeted therapies are evaluated (alone or in combination) in large comparative studies that look at survival and lack of progression as endpoints. These studies are long and expensive but represent a larger market potential.
For the past two years, Synta and investigators have been gathering information on the patients who responded to ganetespib as a single agent in an attempt to identify biomarkers for patient selection. Finding these niche indications is particularly crucial for small cash-burning biotechs as a way to mitigate risk and shorten development timelines.
At ASCO last month, Synta presented results in lung cancer, which identified the first niche indication for ganetespib: Lung cancer with ALK mutations. Of eight patients with the mutation, 6 saw their tumors shrink including 4 patients who had durable objective responses. This finding was not utterly surprising given similar experience with another Hsp90 inhibitor in this patient population.
ALK is getting headlines thanks to Pfizer’s (PFE) crizotinib, an ALK inhibitor which has generated impressive data in ALK+ lung cancer. Crizotinib is expected to become approved next year in ALK mutated lung cancer, representing a $0.5B opportunity in the U.S. alone. This adds another layer of complexity to the development of ganetespib in ALK+ patients, as there is already a dominant drug for this indication. On the other hand, Pfizer is paving the way with respect to identifying ALK+ patients, which account for only ~4% of lung cancer cases.
Synta’s Ganetespib and Pfizer’s crizotinib work in different mechanisms, which bodes well for combining them. As a result, the two drugs should not be viewed as direct competitors. Synta is looking at three potential routes to pursue this indication: As single agent in crizotinib pre-treated patients, as combination with crizotinib in crizotinib-naïve patients, or as a combination with crizotinib in crizotinib-pretreated patients. The company is expected to announce its strategy in the near future, which could include more than one option. A combination trial with crizotinib (or another ALK inhibitor for that matter), will probably not be financed by the company but by a partner or a non-profit consortium.
The most attractive aspect in a drug like ganetespib is the high likelihood of identifying additional biomarkers for patient selection. In contrast to most targeted therapies, Hsp90 affects many cancer related proteins, so it could be potentially applicable in a myriad of niche indications. Each of these niches typically represents a $100-500M opportunity, depending on the prevalence of the mutation.
One potential niche indication could be BRAF mutated tumors across several indications (primarily lung and melanoma based on available clinical data), representing a market opportunity larger than ALK. There appear to be other undisclosed biomarkers in breast cancer (could be BRCA mutation) and pancreatic cancer. The ASCO data set also included intriguing findings in lung cancer patients with KRAS mutations, which represent a very large patient population. Although 8 of 13 KRAS mutated patients experienced tumor shrinkage, the effect was not durable enough to merit pursuing this indiction with ganetespib alone.
Synta is expected to announce at least one deal around ganetespib this quarter. It is still unclear whether the deal will include a geographical element (licensing of Asian rights) or collaboration with companies who would like to combine their drugs with ganetespib.
The collaboration model is suitable for companies who would like to differentiate their products and fend off competitors by combining them with ganetespib. One obvious example is Pfizer, who could pursue the combination of crizotinib and ganetespib as a way of blocking competing drugs from Roche (OTC:RHHBY), Ariad (ARIA) and GSK (GSK). This combination could also increase the duration of treatment with crizotinib, resulting in higher sales per patient. The advantages of this model to Synta are in retaining the rights for its drug while someone else is paying for certain clinical trials. The disadvantage in these deals is that they do not include substantial cash payments that are typically involved in classic outlicensing deals.
With a market cap of ~$200M, Synta is one of the cheapest biotech stocks on the market. Its lead program has a clear route to market in ALK mutated lung cancer, a niche worth more than $1B globally. Beyond ALK, there are multiple other biomarkers that could represent a substantial market opportunity, not to mention combination with chemotherapy and radiation in unselected patient populations. In contrast to other agents on this list, ganetespib’s primary focus is on solid tumors, which represent a higher unmet need and less saturated markets.
Synta has two main active competitors in the field of Hsp90 inhibitors. Infinity (INFI) is focusing development of its first generation inhibitor (IPI-504) also on lung cancer and ALK+ tumors in particular. IPI-504 appears as active in ALK+ patients (see this paper) but is considered more toxic than ganetespib. Another competitor is Debiopharm, who is developing Debio-0932, originally developed by Curis (CRIS). Although no data have been published for this agent, it appears to be active and safe based on remarks by Curis’ CEO earlier this year. Financial details of the deal were not disclosed but based on the published milestone payments, this deal is lucrative enough to be an important driver for Curis. Recently, a third competitor, Exelixis (EXEL) terminated its Hsp90 program, which was in phase I.
Of the agents on this list, YM Biosciences’ (YMI) lead program (CYT387) is the most controversial one. CYT387 is in development for myelofibrosis (MF), a rare blood disorder that represents a ~$1B global opportunity according to estimates. CYT387 is similar in its mode of action to Incyte’s (INCY) and Novartis’ (NVS) ruxolitinib, as both drugs are JAK1/2 inhibitors. Ruxolitinib is expected to reach the market next year, become the first ever drug to be approved for MF and generate sales of several hundred millions of dollars. Label expansion to two other blood disorders is expected to drive sales beyond $1B by 2015, according to some analysts.
CYT387 originally appeared as a me-too drug, lagging behind ruxolitinib. But based on recent clinical data, some claim it could have an important advantage. While Incyte’s ruxolitinib treats two important hallmarks of MF (spleen enlargement and disease symptoms) it does not treat the third hallmark: Anemia. In fact, anemia is one of the side effects of ruxolitinib, which more than doubles the rates of severe anemia compared to placebo.
YM Biosciences claims that not only does treatment with CYT387 is anemia-sparing, it in fact improves existing anemia in MF patients. This claim is backed by a growing body of clinical data which suggests that the drug deals with all three hallmarks of MF. Last month at the ASCO conference, investigators presented data for 60 MF patients, where CYT387 demonstrated a clear effect on spleen size and disease symptoms. Of the 42 patients who started the trial with anemia, 21 (50%) experienced an anemia response. This is in bright contrast to results with ruxolitinib, which had no positive anemia effect and even showed deterioration of anemia in some patients. If the anemia effect is real, CYT387 could easily replace ruxolitinib as the market leader when approved-- although there is still a lot of skepticism among investors and physicians.
Critics of CYT387 claim the drug’s anemia effect is unproven and could be artificial. Most of the criticism is directed at the fact that CYT387’s data set is immature, lacks a control arm as well as the flexible and vague definition of anemia and anemia response. For example, because anemia is a common co-morbidity in MF patients and can be treated with blood transfusions, it should be analyzed in the context of patients’ historical data. In addition, anemia is a chronic condition that needs to be analyzed over long periods of time. Lastly, the company has not provided a single scientific explanation for CYT387’s anemia effect, although it is hard to ignore the clinical data.
YM Biosciences plans to present updated results from its clinical trial at ASH in December. The data will include more patients from multiple clinical centers and longer follow up. If the anemia effect holds up, CYT387 could become an attractive asset for partnering. Any partner that will acquire rights to the drug will do it knowingly that the anemia effect can be proven only in phase III trials. From YM’s perspective, a partner is urgently needed to roll out pivotal trials and reach the market as soon as possible.
Regardless of the anemia question, CYT387 is clearly active with what appears to be comparable efficacy to Incyte’s ruxolitinib. It is 2-3 years behind ruxolitinib, so the worst case scenario for CYT387 is being a fast follower that will have to compete with an established market leader. The market for myeloproliferative diseases is big enough for several compounds and could also expand to rheumatoid arthritis and blood cancers. Sanofi- Aventis (SNY) also has a JAK inhibitor in mid stage clinical development with clear activity but a less benign safety profile.
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Portfolio Holdings as of July 3rd 2011