Among the questions I'm most frequently asked by e-mail and Seeking Alpha's private message portal is: "Why hasn't Vical (NASDAQ:VICL) locked and adjudicated the database on their pivotal Phase 3 trial for their lead drug Allovectin-7 ('Allovectin') for metastatic melanoma?" Let's see if I can't provide some answers below, but first let's review where we are today.
I have discussed Allovectin in several Seeking Alpha articles, most recently here and here. The protocols for the pivotal Phase 3 trial were developed using the experience gained from the Phase 2 trial, the results of which are summarized in the Kaplan-Meier data below (courtesy Vical Incorporated).
The median overall survival was 18.8 months. Unfortunately, more than 60% of the subjects did not complete more than one treatment cycle. This was because of the need to adhere strictly to the Response Evaluation Criteria in Solid Tumors, or RECIST, criteria, which were designed for chemotherapies, not immunotherapies such as Allovectin. One particular limitation here is that if a patient receiving the treatment develops a new lesion, however small it may be, that patient must leave the trial, even if the patient is benefitting from the therapy.
That said, 11.8% of the patients treated with Allovectin achieved an objective response. (Again, more than 60% of those in the Allovectin arm did not complete more than one treatment cycle.) But what is even more impressive to my mind is the fact that at the time these data were published, the median survival could not be determined for the responders. Put another way, less than half of the responders had died at the time the study follow-up was ended (80 months from trial inception). At the least, even the most bearish Vical analyst would have to begrudgingly have to admit that the evidences bode well for Allovectin prolonging the survival of skin cancer patients. As of the last update (June 20, 2012), 8 years after the Phase 2 study was initiated, the responder curve finally achieved a median overall survival of 8 years, or 96 months.
The major reason, no doubt, that the database for the Phase 3 study has not been locked has to do with the fact that the study is using healthier patients. This can be seen in the slide below (from the 2012 Wells Fargo Securities Healthcare Conference (courtesy Vical Incorporated):
Note, again, the relaxation in the RECIST criteria, allowing a patient's doctor to continue treatment if the patient is responding, even if a new lesion appears. Even though the narrowing of the treatment population may eventually translate into a limitation on those eligible for the treatment, Vical estimates that at least 30% of the some 30,000 new metastatic melanoma patients who present with the disease each year will be candidates for Allovectin treatment, providing a significant patient population for their product. Moreover-and this is important-recent mouse studies sequencing Allovectin with the mouse equivalent of Bristol-Myers' (NYSE:BMY) Yervoy demonstrated the two treatments are synergistic. According to Vical's president Vijay Samant, the presumption is that if this synergy is proven effective in clinical trials, Allovectin would be administered first to take maximum advantage of the patient's immune system. The concern would be that if Yervoy is administered first, it might compromise the patient's immune system to the point where Allovectin might not provide a significant, if any, benefit.
The Phase 3 Allovectin trial enrolled January 2007-February 2010 with 390 patients: 260 in the treatment arm, and 130 in the placebo arm. Final treatments on the study were completed in February 2012. Full details are in the slide below:
The efficacy endpoints are shown below.
One may wonder, with all of the safety boards conducted, why the trial has not been stopped by now, especially given the Phase 2 results. The fact is, the safety board monitoring the Allovectin Phase 3 trial has had access only to safety data, not efficacy data. They have completed five interim safety analyses with no issues. Importantly, they have determined no additional safety reviews are required until the trial has been completed. Put another way, the board did not have the ability to halt the trial except for serious safety issues.
So, where do we stand? The first question scientists at Vical are asking is: "Are patients in the control arm living longer?" With the use of dacarbazine (DTIC) or temozolomide (TMZ) in the control arm, a review of all available data shows patients given this treatment have a median overall survival in the range 6-11 months. Given that the Allovectin Phase 3 trial is using healthier patients and any therapies given patients in the control cohort post-progression from the trial have no expected synergies, the median overall survival in the control arm could certainly be greater than 11 months.
The next question to be asked is: "Are patients in the treatment arm living longer?" Recall that the original assumption, based on the Phase 2 trial, was that the median overall survival for Allovectin survivors was 18.8 months. But if we consider only the healthier patients, that number now climbs to 22.5 months. And if we add in the factor related to having modifying the RECIST criteria-meaning patients in the treatment arm are getting more Allovectin-and consider the possible synergy with Allovectin of other therapies given patients in the treatment arm post-progression, then the median overall survival could be greater than 22.5 months.
The bottom line (literally!) is:
1. With respect to the Primary Endpoint of Response Rate, the Data Audit, which began 2 years after the last enrollment, is complete, and Data Adjudication is underway.
2. With respect to the Secondary Endpoint of Survival, we await the Target Death Events needed to determine the Survival Results.
Vical expects to announce results for both endpoints at the same time, in late 2012.
The Daily chart, courtesy StockChart.com, shows the stock, after dipping below $2.80 in May, has recovered and begun a new uptrend. The Relative Strength and MACD are positive.
Turning to the Weekly technical data, the stock, after dipping slightly below the 200-week moving average, has turned up and broken through the 50-week moving average. Relative Strength has turned up, as well, and the MACD is positive.
Additional disclosure: I am long VICL and will not alter my position within 72 hours of the time of publication of this article. I am not a registered investment advisor and do not provide specific investment advice. The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. It is up to investors to make the correct decision after necessary research. Investing includes risks, including loss of principal.