Arqule (NASDAQ:ARQL) had a quiet 2011 with only two meaningful events, both occurring in January: Initiation of Phase III in lung cancer and a public offering. With respect to clinical data, the last meaningful data set was announced in March 2010 in the form of positive Phase II results in lung cancer for Arqule’s lead agent, tivantinib (ARQ197). Almost two years later, Arqule returns to investors with more good news, this time in liver cancer. Actual data will be announced only at ASCO in June, however, the limited information provided by the company already positions tivantinib as one of the most promising agents in development for liver cancer.
The Phase II study included 107 patients who failed 1st line treatment (Nexavar in the vast majority of cases) and were randomized to receive Arqule’s tivantinib (2 different doses) or placebo. Tivantinib led to a 56% increase in time to progression (TTP), with compelling hazard ratio and p value (HR=0.64, p-value = 0.04). The company did not disclose actual numbers but the difference appears to be very strong from a statistical standpoint, which is particularly impressive given the small size of the trial and the inclusion of all patients in this analysis (no subgroup analysis).
Liver cancer is a notoriously difficult indication, with only one proven drug- Onyx’s (NASDAQ:ONXX) Nexavar. The fact patients on the control arm received placebo and not any form of active therapy demonstrates the lack of good options for 2nd line patients. On top of the aggressive chemo-resistant nature of the disease, safety is a cardinal issue in liver cancer patients, who have very low tolerability of side effects. This is where tivantinib’s benign safety profile could be critical, although even with tivantinib investigators encountered side effects that forced them to change the protocol and reduce the dose as the trial progressed.
Open questions- Survival and biomarkers
Positive randomized data sets in liver cancer are very hard to find, however, there are still a lot of open questions regarding tivantinib’s future in this indication. The absolute benefit in TTP is still unknown, let alone its effect on overall survival. Based on other Phase II trials, TTP for 2nd line liver cancer is typically 2-3 months. Therefore, if the control arm had a median TTP of ~2.5 months, tivantinib added only ~1.4 months. Even if Arqule manages to replicate this achievement in Phase III, it is unclear whether this benefit is enough for approval. A more important question is this difference will lead to a clinically meaningful survival benefit.
But the most intriguing piece of data would be biomarker analysis, especially such that is related to the pathway inhibited by tivantinib (cMET). The two usual suspects are expression levels of cMET or its ligand, HGF. If Arqule can show retrospectively an association between expression of any of these proteins and clinical benefit, it will probably focus on this subgroup going forward. This will decrease the theoretical market potential but it will also substantially improve probability of success and market acceptance.
Right drug, right strategy
A good clinical program is comprised of 2 important ingredients: A good drug and a good development strategy. The tivantinib program has both, and Arqule and its partner, Daiichi-Sankyo (OTC:DKSHF), are now reaping the fruit of a well planned, well executed clinical program that sets an example of how targeted agents should be developed in oncology.
Arqule’s strategy is based on using robust randomized Phase II trials powered for demonstrating a clinical benefit (progression free survival or TTP) as go/no-go decision points. Randomized Phase II trials are long, expensive and difficult to run, but their results have tremendous value, especially if the drug has to be given in combination or when overall survival is the endpoint needed for approval.
This was complemented by careful selection of three relevant clinical settings that make sense biologically, hence, where cMET signaling plays an important role either alone or in combination with other pathways. Arqule chose three settings: (i) 2nd line NSCLC with Tarceva (ii) 2nd line liver cancer alone and (iii) 2nd line colon cancer with chemotherapy and Erbitux. Each of these settings represents an unmet need as well as a lucrative commercial opportunity.
So far Arqule got it right in two out of two data readouts - the third trial is expected to generate results towards mid-2013. Assuming the liver cancer data will include at least 1 good biomarker for patient selection and a survival trend, a Phase III will start towards the end of 2012. Having two Phase III programs based and designed using positive readouts from large randomized Phase II studies is a remarkable achievement, let alone for a small biotech company.
Portfolio holdings as of January 22nd 2012
Disclosure: I am long ARQL.