Cougar Biotechnology (CGRB) is a publicly traded company focused on developing novel treatments for cancer. The company is developing CB7630 (Abiraterone Acetate), a small molecule for the treatment of hormone refractory prostate cancer [HRPC], and has completed several clinical trials demonstrating its efficacy. The National Cancer Center reports that there are over 186,000 new cases of prostate cancer a year. Of these, 20 percent will be diagnosed as metastatic and will become hormone refractory.
So let's put this into some tangible numbers. This means that the market for HRPC encompasses 37,200 patients per year. Assuming pricing inline with most cancer biologics, ~$40,000 a year, and using a basic model of risk adjusted net present value we hit $825 million, for a $40 dollar value per share. Not too shabby.
Let's try to understand prostate cancer and how abiraterone fits into the treatment scheme. Prostate cancer is characterized by malignant cells which are both androgen-dependent and androgen-independent. For those cells that are androgen-dependent, a critical level of androgen is required to activate a sufficient number of androgen receptors (ARs) so that transcription of death-signaling genes is repressed. Ninety percent of androgens are produced by the testes, with 10 percent produced by the adrenal glands or the cancer cells themselves.
Prostate cancer is treated basically in two phases which are based on the stage of prostate cancer: a prehormone therapy phase, followed by a hormone therapy phase. The prehormone therapy treatments include surgical removal of the prostate gland, radiation therapy with or without hormone therapy, and "active surveillance" (also known as watchful waiting). Stage IV is known as advanced metastatic prostate cancer and is treated with primary androgen deprivation therapy, which may include castration, and therapeutic disruption of the normal androgen production regulatory pathways. At this point the cancer cells can become androgen ablation insensitive (also called hormone refractory). There are only three therapeutics approved by the FDA to treat HRPC (docetaxel, mitoxantrone, and estramustine) all of which are chemotherapeutics with debilitating side effects, but show an increase in survival to 20 months vs. 10 months when PSA levels drop 50%.
Other commonly used HRPC therapeutics include steroids such as hydrocortisone, estrogens, and ketoconazole. These treatments achieve similar decreases in PSA levels with concomitant survival benefits, although there are severe liver toxicity issues.
Cue the Entrance of Cougar
Results of a phase II trial started in December 2006 of abiraterone in chemotherapy naiive patients announced in February 2008 detailed a 50 percent drop in PSA in 61 percent of patients. A phase II trial started in December 2006 in patients having failed first-line chemotherapy with docetaxel showed 48 percent of patients having 50 percent decrease in PSA and 53 percent experiencing on-going stable disease. Another phase II trial and a phase I trial, started in July 2007 and June 2006 respectively show similar promise with patients who have failed other treatment regimens including chemotherapy, leutenizing hormone analogs and other hormonal therapies. Cougar is definitely doing there homework.
So What Does Abiraterone Do?
Andorgen-independent cells in prostate cancer are not getting their growth boost from androgens produced in the testes, which at treatment levels drop to nil. Ten percent of the normal levels are produced in the adrenal glands, but theories point to cancer cells producing their own testosterone, thereby fueling their own growth. Abiraterone, like ketoconazole, interferes with the cells machinery for adrenal steroid synthesis, but through two very specific pathways, P450 enzymes 17-alpha hydroxylase and C17,20-lyase. This results in far fewer side effects and also inhibits androgen synthesis with tumor cells.
Financially Cougar is Stable
(See report here.) Their burn rate for last year was a little over $18 million. They predict they will need up to $85 million in capital to make it to FDA approval. They have over $96 million in the bank.
Where is Cougar's Competition?
There are no second-line hormonal treatments approved for hormone refractory prostate cancer. Current presecribed therapeutics are manly composed of steroids and anti-androgens.
AstraZeneca (NYSE:AZN) - Casodex (Bicalutamide)
Studies with bicalutamide, an antiandrogen, show about a 23% PSA reduction. Side effects are milder with impotence observed only in 5% and hot flashes observed in 51%. Casodex has pretty much replaced other antiandrogens as the drug of choice because of its improved side effect profile and has generated blockbuster revenue for AstraZeneca, surpassing $1.2 billion in sales for 2006. It should be noted that there has been no survival statistics calculated for second-line hormone therapies alone. Bicalutamide goes off patent in October 2008
Sanfois Aventis (NYSE:SNY) - Nilandron (Nilutamide)
Studies with nilutamide, an antiandrogen, show about 29% of patients reaching >50% PSA reduction. Side effects include nausea (25%), hot flashes (67%), and impotence (52%). Nilutamide went off patent in 2001.
Schering-Plough (SGP) - Eulexin (Flutamide)
Another anti-androgen, flutamide has a similar PSA reduction efficacy, but side effects include gynecomastia (42%), impotence (100%) and hepatic dysfunction. Flutamide went off patent in 2001.
What Competitors Are in Development?
The table below outlines certain competitors and their respective phases (click to enlarge):
What Does It All Mean?
Results from their phase III trials will be important to determine whether endpoint efficacy will be significant when compared to placebo. Abbott's (NYSE:ABT) Xinlay showed great PSA responses during their trials but showed no significance with tumor radiological responses (shrinkage, decrease in number or events) and showed significant cardiovascular side effects. This lead to a non approval from the FDA. Sartraplatin has been having some trouble as well. Spectrum Pharmaceticals (NASDAQ:SPPI) platinum based chemotherapy showed no significant survival benefits in clinical trials.
Cougar is well placed to take a large share of the premium priced market for prostate therapies if its phase III enpoints are met satisfactorily. There is a huge unmet need for an efficacious therapy with minimal side effects that has significant survival benefits. With the dismal performance of Abbott's Xinlay and Spectrum Pharmaceuticals' Sartraplatin, Cougar Biotechnology may take the lion's share.