Playing OncoGenex's ASCO Data

OncoGenex (NASDAQ:OGXI) - Phase II data preliminary presentation at Tuesday's ASCO meeting indicates that OGX-427 plus prednisone offered a 71% progression free rate at the 12 week mark in chemotherapy naïve metastatic castration resistant prostate cancer (mCRPC) compared with a 40% progression free rate in the prednisone placebo group. Further, the OGX-427/prednisone treatment arm showed 50% reduced prostate-specific antigen (NYSE:PSA) compared to a 20% reduction with prednisone alone. A phase II study investigating the efficacy of OGX-427 and Johnson & Johnson (NYSE:JNJ) subsidiary Janssen Biotech's Zytiga, an androgen blocker, is planned for later this year.

OGX-427 is in partnership with anti-sense pioneer Isis Pharmaceutical (ISIS). The agent inhibits Heat Shock Protein 27, a protein necessary to cell survival and the development of cancer, which is resistant to current chemotherapy targets and often is over expressed in response to these cancer treatments. The nature of this agent makes it applicable to trial for a variety of cancers. Oncogenex's second partnership drug, in concert with Isis and Teva (NYSE:TEVA), OGX-011, acts to inhibit the cell survival protein clusterin. Phase III studies for both a variety of prostate cancer types and non-small cell lung cancers is expected near term. Two additional cancer agents are in earlier pipeline stages.

There is little doubt OGXI's science has promise but is it worth your investment? OncoGenex shares took an 18% hit in March when it provided a share offering selling over 4 million shares at $12. The stock remains near its $12 mark today. OGXI is still a strong buy on many analysts' lists, but events such as the recent share offer and a limited pipeline may make investors cautious. Despite strong ASCO news, shares of OGXI were down over 3% as of this writing.

Investors interested in the OncoGenex would be wise take their due diligence to Isis, which offers a history of strong management and a diverse pipeline with a variety of partnership. Shares of Isis have been steadily ticking up in Q2 2012 and reached 52 week highs at the end of May. Isis earned its $25 million milestone payment from Genzyme (NYSE:SNY) for its hypercholesterolemia drug Kynamro gained NDA filing acceptance from the FDA May 29th. Playing the ASCO attention from OGXI and anticipating the Kynamro PDUFA in January 2013 make this option interesting. If the key to investing is diversification, consider diversifying your OGXI investment with its partner, ISIS.

Disclosure: I am long ISIS.