As a research scientist and writer of mystery thrillers, solving puzzles is my life’s work. In both vocations, the devil is in the details. Scientific theories can live or die by measurement accuracy in the third decimal place, while a novel’s plot can turn on the minutest detail. So it is not unusual that small things others might ignore catch my attention, and quite frankly, can nag at me for weeks until I’m able to explain them ... at least to my satisfaction.
I also enjoy the challenge of "reading" people. Face-to-face conversations involve more than oral communications, with body language an important adjunct to the exchanges taking place. That said, listening to someone speak without the benefit of looking them in the eye makes it more difficult - but not impossible - to acquire additional "color," or "fidelity," relative to what is being said.
So it was with some interest that I listened to Mr. Vijay B. Samant, President and Chief Executive Officer of Vical (NASDAQ:VICL), when he was interviewed at the Stifel Nicolaus Healthcare Conference 2011 on September 8, 2011. (This interview and other recent presentations are available on the Vical website. In particular, you may want to listen to the presentation at the JMP Securities healthcare Conference on September 27, 2011). At the Stifel Nicolaus conference, Mr. Samant seemed especially energized when talking about Allovectin-7® (Av-7). His responses to the interviewer, together with his enthusiasm for the treatment, spoke volumes to me.
Which got me wondering: What, if anything, could Mr. Samant, or for that matter, anyone know at this point regarding the outcome of the Phase 3 pivotal trial? After all, the database for the study will not be locked until the first quarter of 2012, with top-line results available in the second quarter. Further, and importantly, the study data are blinded. Individual patients participating in the trial know if they are getting Vical’s drug the control treatments dacarbazine (DTIC) or temozolomide (TMZ), because each is administered differently. Physicians participating in the study know which patients at their individual sites got which drug. But the data from all the study sites are not available in a consolidated form to either patients or doctors, nor to Vical. So, let’s examine the trial and see what, if anything we can "divine" regarding what the outcome might be.
First, some facts. According to the National Cancer Institute, metastatic melanoma is one of the fastest growing cancers in the United States, with approximately 70,000 new cases and 9,000 deaths reported each year. According to a WHO report, about 48,000 melanoma-related deaths occur worldwide each year. The commercial opportunity in this indication is more than $500 million in the U.S. alone, annually. Currently, among the treatments employed are BMS’s DTIC (9.1 months median survival), BMS’s Yervoy® (10.1 months median survival), Yervoy® + DTIC (11.2 months median survival). For comparison, Vical’s Av-7 achieved 18.8 months median survival in the Phase 2 study (VCL-1005-208).
Let’s look at the Phase 3 trial. From the FDA’s site for the Av-7 trial, we have this:
1. Official Title: A Phase 3 Clinical Trial to Evaluate the Safety and Efficacy of Treatment With 2 mg Intralesional Allovectin-7 Compared to Dacarbazine (DTIC) or Temozolomide (TMZ) in Subjects With Recurrent Metastatic Melanoma
2. Condition: Metastatic Melanoma
- a. Biological: Allovectin-7
- b. Drug: Dacarbazine (DTIC)
- c. Drug: Temozolomide (TMZ)
4. Detailed Description: Eligible patients will have a 66% chance of receiving Allovectin-7 alone (an investigational product designed to train your body's immune system to recognize and destroy tumor cells) vs. a 33% chance of receiving standard chemotherapy (either dacarbazine or temozolomide). The treatment course recommended for patients who receive Av-7 is a minimum of 16 weeks. Each cycle will consist of weekly injections of Av-7 alone for six weeks followed by two weeks of observation and assessments. For patients who receive the chemotherapy alone, their treatment course will follow standard dosing. During the trial all patients' tumors will be closely monitored. Patients whose melanoma does not clinically progress will be encouraged to continue on the treatment and be assessed for up to two years.
5. Estimated Enrollment: 375
6. Study Start Date: October 2006
7. Estimated Study Completion Date: June 2012
8. Estimated Primary Completion Date: February 2012 (Final data collection date for primary outcome measure)
Let’s examine the study in more detail. This will provide additional background into this study as well as to how such trials are conducted. First, Vical was informed as each new patient was enrolled, but did not have access to the randomization assignments for those patients. Again, the study was completely blinded to Vical.
In North America, Vical monitored sites directly. Overseas, Vical used third-party contract research organizations (CROs) for monitoring visits, but also visited sites directly from time to time. Vical has direct, on-going oversight of the CROs. Further, Vical uses a data management CRO for all data globally. Importantly, all data are blinded as to treatment arm. Put another way, at no time was Vical aware of the treatment provided to any given patient at any one of the 88 study locations.
All sites, globally, were provided with the same initial allocation of drug supply by Vical prior to enrollment of a patient at the site. This allocation was two cycles of Av-7. Vical shipped the Av-7 directly to sites in North America and through third parties for delivery to overseas sites. Because of site-specific ordering practices, this information would provide at best an approximation of the number of patients on the treatment arm at any given site. Drugs for the control arm were ordered locally by each site, so Vical did not have information that would allow a comparison between the two arms.
A cycle of Av-7 treatment consists of one injection per week for six weeks, followed by a two-week observation period, for a total of eight weeks per cycle. These cycles can be repeated as long as (1) the patient is alive, (2) does not have progressive disease, (3) has not withdrawn consent, and (4) has injectable lesions, up to a maximum of two years in the Phase 3 trial. This is important. As long as these four conditions are met, the patient not only remains alive (per condition (1)), but also continues to receive injections of Av-7.
So, at the first visit, and for a patient randomized to the Av-7 arm of the study, the physician identified up to 10 target lesions to track throughout the trial period. The full 2 mg dose of Av-7 is injected directly into a single target tumor lesion. The same target lesion is injected repeatedly in subsequent weekly visits unless it becomes too small to inject. At that point, another target tumor lesion may be substituted, and injected repeatedly in weekly visits unless it becomes too small to inject. Av-7 is injected into the same target lesion each week as long as that lesion remains injectable.
As reported by Vical in its financial results for the year ending 2010, the trial completed enrollment with a total of 390 patients in February 2010. Further, the company announced completion of the Phase 3 trial's fourth scheduled safety analysis by an independent Safety Monitoring Board (SMB) and the recommendation that the trial continue per the protocol. Shortly after reporting the year-end results, Vical reported a positive review on the Phase 3 trial’s fifth scheduled safety analysis.
These are important events, but not something that necessarily creates a lot of excitement (unless a safety monitoring board recommends that a trial be halted). In the Stifel Nicolaus interview, Mr. Samant noted that the SMB had determined that no additional safety reviews would be conducted until after completion of the trial.
What about the Phase 2 VCL-1005-208 results? For review, published results from a completed Phase 2 trial of Av-7 in 127 chemo-refractory or chemo-intolerant patients with metastatic melanoma compare favorably with historical controls from other studies. Among the 15 responders (11.8%), four had complete responses and 11 had partial responses. The median duration of response was 13.8 months, and all responses were durable, lasting at least six months. The median survival for all patients was 18.8 months. Impressive, especially given how devastating this disease is. But this is old news ... yesterday’s "hurrah."
Perhaps the fact that as we get closer to the New Year and the anticipation of locking the Av-7 database is spurring Mr. Samant’s enthusiasm for his pipeline in general and Av-7 in particular. Hardly. Corporate officers are almost universally the most vocal advocates of their products and services.
No, I think something else is at work here. So ... what is it that’s nagging at me - something hiding in plain sight - that makes me think there’s more going on here with the Av-7 Phase 3 trial than meets the eye?
Put simply, I think the people at Vical are cheered by the fact it continues to ship their lead drug to participating trial locations. Let me be absolutely clear: this hypothesis is NOT supported by any information Vical has disclosed. Vical has noted that it is still shipping SOME drug, but the corporation has never indicated the amount. So while the implication is that, at the least, SOME patients in the Av-7 arm continue to live, there is no indication that ALL patients in the Av-7 arm are still alive.
Consider this. We know that 260 of the 390 patients in the study have received or are now receiving Av-7. In addition, for these 260 patients, Vical knows (1) how the usage of Av-7 ramped up in the course of the Phase 3 study, (2) how Av-7 usage is varying as a function of time, and (3) how much of the drug has been shipped, and continues to be shipped, in the study. So, if the lives of patients on Av-7 in the Phase 3 trial have been extended, then the call for the drug should remain at somewhat elevated levels - "hang," if you will - and start to drop slowly with time (versus dropping precipitously) as some patients on Av-7 die or leave the trial for any one or more of the other reasons cited above. Again, this is my speculative hypothesis not directly supported by information Vical has provided.
Of course, patients in the other arm could be thriving as well, but their treatment does not portend as good an outcome as the Phase 2 Av-7 results would suggest.
In short, I’m speculating that it may (and I emphasize the word "may") be their knowledge of Av-7 shipments that Vical management finds encouraging about the Av-7 arm of the Phase 3 trial. There is nothing whatsoever in the public record that I have been able to find to indicate this is the case ... no statements on conference calls, at analysts meetings, or in papers or abstracts at symposia or conferences.
Now, a knowledgeable friend with an extensive background in trial data analysis (and who requested anonymity) was quick to play devil’s advocate. His comment to me was terse and to the point: “There is a deep danger in projecting the success of a trial just because you think the trial arm is doing better. More often than not, a trial drags on because the control arm is doing well. If control patients die at the rate that they are supposed to die, the trial probably would end just where the company projected it.”
Point taken. As we learned in the case of Dendreon’s (NASDAQ:DNDN) Phase 3 Provenge study, immunology trials can try the patience of Job. The time needed for the Kaplan-Meier curves to separate sufficiently to support an argument for approval is measured in years. This is one of the reasons more than three years elapsed between the May 8, 2007 FDA call for more data on Provenge’s efficacy and the treatment’s final approval in April 2010. (see here and here)
Further, in all fairness to the bears, corporate officers are, if anything, among the more vocal advocates for their products and services. And when it comes to the pharmaceutical industry in general and the biotech industry in particular, failures of new drugs in Phase 3 trials can be spectacular. Who can forget the spectacular Phase 3 implosion of Novacea's Asentar for androgen-independent prostate cancer due to an imbalance of deaths between the two treatment arms? This not only scuttled the study, but also, the $440-million co-development deal that Novacea had, strangely enough, signed with Schering-Plough (now Merck, Schering-Plouth) just three weeks after the FDA had turned down Dendreon’s application for the approval of Provenge.
I can’t say with certainty that what I have pondered regarding shipments of Av-7 to the study sites is what actually is happening. But certainly, this is the ONE variable in the "equation" that seems ripe for speculation. After all, the longer the patients in the study who are on Av-7 live, the more call there is for the treatment.
VICL currently is recovering from a precipitous drop in share price early this month when the shares, following a break of the 200-day moving average at $3.20, dropped below $3, triggering an avalanche of margin calls. After dropping to a low on the order of $2.30 and touching oversold levels, the stock has recovered minimally, and now stands just below $2.50. The Daily MACD line is still negative and dropping.
Disclosure: I am long VICL.
Additional disclosure: Disclosure: I am long VICL and will not alter my position within 72 hours of the time of publication of this article.