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Research Background- I only invest in areas of interest that are familiar.
  • The Cost-Effect Of Chemotherapy Favors Chemoenhancer PegpH20 17 comments
    Feb 8, 2014 2:13 PM

    Dr Leonard Saltz, chief of gastrointestinal oncology at Sloan-Kettering, co authored a 2012 NY Times Op-Ed article which contributed to Sloan-Kettering's decision to drop the Sanofi colon cancer drug Zaltrap due to its high cost benefit ratio. His efforts led Sanofi to halve the cost of the drug. His current cost-effect target is Abraxane. He has recently written in the New England Journal of Medicine that the added 1.8 mos in median overall survival it brings to its combination with Gemcitabine does not justify its $6000-$8000/month additional cost. Justify to whom? This is not an easy judgment. The patient, if they could, would likely pay $11,000 for an extra 7 weeks with their family However, since most patients are not paying their own medical bills, the question becomes: is worth $11,000 to keep a terminal cancer patient alive and how much does this end of life care add to the burden of the health care system? Is that amount justified in a society struggling to increase the scope of insurance coverage? From Dr. Saltz's perspective, there must be some amount of added survival which would justify the additional expense. Certainly a complete response would justify the cost. So, to paraphrase Bernard Shaw, we've established that cost benefit analysis would dictate that it's worth paying for a cure-so we're just haggling over how much less than total life expectancy is "worth"reimbursing?

    Gemcitabine has been the chemotherapeutic standard of care in pancreatic cancer. In Metastatic Stage 4b, it yields a median overall survival (NYSE:MOS) of 6.5months. When Abraxane is added, that becomes 8.5 months. The combination of Abraxane and Gemcitabine is relatively well tolerated. Folfirinox is a less well tolerated generic combination of

    FOL = Leucovorin Calcium (Folinic Acid)
    F = Fluorouracil
    IRIN = Irinotecan Hydrochloride
    OX = Oxaliplatin

    In the same setting of Pancreatic Stage 4b, this combination yields an MOS of 11.1 months. However adverse effects of Folfirinox have led many oncologists to first employ Abraxane-Gemcitabine, despite the difference in MOS.

    So the chemotherapeutic treatment of metastatic pancreatic cancer poses two dilemmas: The most effective agent is least tolerated, and the agent which adds moderate effect to the best tolerated combination therapy is most costly.

    This is where pegpH20 fits in like sunscreen at a nudist colony. In the usual (85%) setting of high hyaluron pancreatic cancer, pegpH20 infused with Gemcitabine in a Ph1b study has extended MOS from the 6.5 mos seen with Gem alone to roughly 18 mos- as reported by Halozyme at ESMO in September 2013. This effect is more than double the added MOS achieved with Abraxane. This would be impressive enough taken at face value, however since 4 of the patients were still alive at ESMO, that value will continue to grow for as long as at least three remains so. Since one of the 1b patients experienced a complete biochemical response, having their tumor marker CA19-9 level normalized, the likelihood of additional MOS seems high.

    If pegpH20 does for Abraxane-Gem what it did for Gem alone, Celgene will have its answer to Dr Saltz's letter- 2 year survival, an improvement no practitioner of cost-benefit analysis could criticize. In this way Halozyme technology may very well rescue Celgene from the fate of Sanofi, or worse.

    PegpH20 actually promises to do more than just extend the MOS of Abraxane-Gem. It is also being studied by Halozyme and the NCI in combination with a version of fofirinox modified by the elimination of a 5FU infusion in order to improve its tolerability. This is being done under a CRADA, meaning Halozyme is awarded full patent rights for the combination, granting a license to the US government on those patents. If pegpH20 triples mFolfirinox's MOS- the number of patients who will be able tolerate the strongest combination will increase, and we may see more 5 year survivors of metastatic pancreatic cancer. This combination would also be very promising for at least 1/4 of all colorectal tumors also found to contain high hyaluron concentrations. Fortunately, Halozyme is planning to market a Diagnostic Hyaluron Tool to identify from biopsy samples which tumors contain high hyaluron content.

    Both combinations are currently being studied in Phase 2 trials. The mFolfirinox trial is being funded by Halozyme's co Collaborator- NCI. It is being performed by SWOG, an NCI supported consortium of oncologists. Given the likelihood that the Ph1b results will be proven out in one or both trials, an early halt and the treatment of the control group is quite possible. This would lead Halozyme to file its BLA with the FDA, based on Ph2 data and simultaneously apply for Breakthrough status.

    Halozyme also plans to initiate a Ph2 pegpH20 study at a second anatomical site by year end. My educated guess is that it will be done in the site with the second highest- 56%- percentage of high hyaluron tumors- the breast. Abraxane is also approved for breast cancer treatment. Recently insurers have been adding obstacles to its use over generic paclitaxel due to, yes, it's added cost. Halozyme's recent secondary offer was in part justified by the needed acceleration of the pegpH20 program. Adding breast cancer as a target makes Halozyme a bigger player in the chemoenhancement market and a more valuable asset to whoever profits from the sale of Abraxane. It seems Celgene's in that nudist colony with Halozyme selling the lotion.

    Disclosure: I am long HALO.

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Comments (17)
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  • cmblanch
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    Comments (77) | Send Message
    Concise and on the mark. Thank you.
    8 Feb 2014, 04:39 PM Reply Like
  • fezziwig2008
    , contributor
    Comments (153) | Send Message
    Author’s reply » Thank you, and let's both thank Dr. Saltz.
    8 Feb 2014, 11:34 PM Reply Like
  • Frankpleonard
    , contributor
    Comment (1) | Send Message
    Good info. Thanks for sharing. I am long HALO as well.
    9 Feb 2014, 11:04 AM Reply Like
  • fezziwig2008
    , contributor
    Comments (153) | Send Message
    Author’s reply » My pleasure- that's a good position to be in.
    9 Feb 2014, 11:51 AM Reply Like
  • vireoman
    , contributor
    Comments (1269) | Send Message
    Very illuminating, fezz. Thanks for taking the time. You have a talent for this. I thought I fully appreciated the promise of HALO, which was why I recently added shares at $12.99. However, now I have a deeper understanding. Kudos.
    9 Feb 2014, 02:13 PM Reply Like
  • fezziwig2008
    , contributor
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    Author’s reply » Thanks Vireoman- Yes The more I read about cancer, the more I believe Greg Frost will win a Nobel Prize in Medicine one day- for his discovery of rhupH20 and its pegylation. He'll help millions of diabetics as well.
    9 Feb 2014, 03:22 PM Reply Like
  • Phisher12
    , contributor
    Comments (2) | Send Message
    Clear Concise and telling even for a dummy like me ...
    9 Feb 2014, 08:35 PM Reply Like
  • JMKwins
    , contributor
    Comment (1) | Send Message
    Just good as usual :=)
    9 Feb 2014, 09:37 PM Reply Like
  • fezziwig2008
    , contributor
    Comments (153) | Send Message
    Author’s reply » Thanks Phish/JMK- I'm glad this message- important to $HALO Longs (and Shorts actually) as well as to patients- comes across clearly.
    10 Feb 2014, 07:06 AM Reply Like
  • TraderPoe
    , contributor
    Comments (6) | Send Message
    I am long HALO and look to you to understand the value of HALO. Thank you.
    10 Feb 2014, 09:30 AM Reply Like
  • fezziwig2008
    , contributor
    Comments (153) | Send Message
    Author’s reply » Well since I am long $HALO too, and I'm sharing my own research with you, I believe that, with the secondary offer closed, the data emerging this Q on all three proprietary products will put you in an excellent position going forward.
    11 Feb 2014, 05:10 AM Reply Like
  • jeepdrew22
    , contributor
    Comments (26) | Send Message
    Great read! Thank you.
    11 Feb 2014, 08:24 PM Reply Like
  • fezziwig2008
    , contributor
    Comments (153) | Send Message
    Author’s reply » Glad you liked it- I am teaming up on a series of articles on Halozyme, hopefully to be released here on Seeking Alpha soon- so stay tuned.
    The truth moves the needle on $halo.
    11 Feb 2014, 09:45 PM Reply Like
  • Grant Payne
    , contributor
    Comments (337) | Send Message
    One thing I don't think really makes since is how can the high HA group be that much better off?
    If what the company says is true, HA matrices around the tumor cell act as a shield, and all pegpH20 is stipulated to do is 'deplete' it and 'improve perfusion and drug delivery to the tumor bed'(their words).


    Without this HA shield, wouldn't the High HA patients' treatment merely be on par with that of the mid to low HA patients, being that the mid to low HA patients were without the 'shield' to begin with?
    HighHA[(6/24) PFS:219, OS:529]
    LowHA[(11/24) PFS:108, OS:174]
    The overall group or intent to treat
    [(24/24)PFS:154 OS:200]
    Also, the sub group is only 6 people, and the low HA is only 11, leaving, what, 7 mid HA people? According to the Sept report it was only 'available biopsies' that yielded HA data, so maybe some high HA people died before they could biopsy. Even one of those would skew the data a lot given the very small population in the study.


    On top of that, the HA levels were never taken at a baseline, so we don't know anything about HA from beginning to end.


    I am, however, happy with recent earnings report which stated about $10 million more in revenue, and I'm cautiously optimistic going forward. PegpH20 seems to have some potential, but then again so do all new drugs.


    Position: Long dated option straddle.
    28 Feb 2014, 08:58 PM Reply Like
  • fezziwig2008
    , contributor
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    Author’s reply » Halozyme has developed a test for hyaluronan content in biopsy samples- so they can quantifty the amt present at time of treatment- the important determining factor in how pegpH20 works. In high Hyal. tumors, HA acts as a stuffing that raises the interstitial (intratumor) pressure- causing arteriole constriction- so little chemo gets to the cells and they resist cell death. In low HA tumors, the target of pegpH20 is missing- perhaps they are filled with a different GAG-glycosaminoglycan- that peg does Not dissolve- so no improvement in chemo delivery in these after Peg is given- get it? Luckily for patients and HALO future earnings - 87% of pancreatic ca patients do have high hyal. tumors- 56% of Breast- around 1/4-1/3 of ovarian, bladder, prostate, colon, and lung (nscs variant do as well.
    1 Mar 2014, 01:29 AM Reply Like
  • Grant Payne
    , contributor
    Comments (337) | Send Message
    Yeah it definitely makes sense I understand the theory behind it. I guess it depends on the properties of the other GAGs in the tumor micro environment, if they're indeed there in prevalence at all. If they don't cause interstitial pressure, however, then that would mean they're maybe as free flowing as a sulfated HA tumor environment anyway. That'd mean they should have responded roughly equally to Gemcitabine.
    There are some academic papers that go into HA targeting and outline its merits with data in proof of concept studies, but a meta analysis of all research is probably warranted.


    I guess the next study with baseline HA readings will be more illuminating, and a larger patient pop, with randomization and blinding will definitely help.
    1 Mar 2014, 02:36 AM Reply Like
  • fezziwig2008
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    Author’s reply » AACR 14 Abstract- Upcoming American Association of Cancer Research-


    Abstract Number: 3646
    Presentation Title: Pegylated recombinant human hyaluronidase PH20 (PEGPH20) enhances cetuximab efficacy in BxPC-3/HAS3 human pancreatic cancer xenografts
    Presentation Time: Tuesday, Apr 08, 2014, 8:00 AM -12:00 PM
    Location: Hall A-E, Poster Section 26
    Poster Board Number: 19
    Author Block: Ryan J. Osgood, James F. Skipper, Susan Zimmerman, Rebecca C. Symons, Harold M. Shepard, Daniel C. Maneval, Curtis B. Thompson, David W. Kang. Halozyme Therapeutics, Inc., San Diego, CA
    Abstract Body: Hyaluronan (HA) over-accumulation in the extracellular matrix (ECM) of many solid tumors is associated with tumor progression and poor prognosis (Tammi 2008). In preclinical animal models, enzymatic removal of ECM HA with pegylated recombinant human hyaluronidase PH20 (PEGPH20) is associated with remodeling of the tumor stroma, reduction of tumor interstitial fluid pressure, expansion of tumor blood vessels and facilitated delivery of chemotherapy (Thompson 2010, Jacobetz 2012, Provenzano 2012). Additionally, epidermal growth factor receptor (EGFR), a tyrosine kinase essential for cell division and tumor growth, has been implicated in multiple epithelial malignancies and is over expressed in ~60% of human pancreatic carcinomas (Frolov 2007). Cetuximab (CET), a chimeric monoclonal antibody (mAb), targets EGFR preventing tyrosine kinase mediated phosphorylation and subsequent signal transduction (Enrique 2012). As pancreatic ductal adenocarcinoma (PDA) has been identified as a cancer type that expresses high levels of HA (~87%; Jiang 2010), studies were conducted to evaluate PEGPH20 enhancement in anti-tumor activity of CET in an EGFR positive HA-overexpressing PDA BxPC3/HAS3 xenograft model (Kultti 2013). In brief, NCr nu/nu mice were inoculated with PDA BxPC3/HAS3 cells adjacent to the tibial periosteum, and tumor growth was monitored with 3D high resolution ultrasonography. When tumors reached ~200 mm3, mice were treated with: (1) vehicle control; (2) PEGPH20 alone, 1 mg/kg; (3) CET alone, 0.03 mg; (4) CET alone, 0.1 mg; (5) PEGPH20 plus CET, 0.03 mg; or (6) PEGPH20 plus CET, 0.1 mg. Vehicle control or PEGPH20 was given intravenously while CET was administered intraperitoneally starting on study day 0, and then dosed twice weekly for 3 weeks (BIWx3). At study termination, the average tumor growth inhibition (TGI) of CET (0.03 mg) was not significantly different from vehicle-treated animals; however, PEGPH20 alone (78%, p<0.05) and CET alone at 0.1 mg (61%, p<0.05) inhibited tumor growth. The addition of PEGPH20 to the 0.03 mg and 0.1 mg CET groups increased TGI to 88% (p<0.05) for both treatments, relative to vehicle. In a second study, when tumors reached ~200 mm3, mice were treated with: (1) vehicle control; (2) PEGPH20 alone, 37.5 µg/kg (3 µg/kg human equivalent dose); (3) CET alone, 0.03 mg; or (4) PEGPH20 plus CET. Animals were dosed as described above. At study termination, the average TGI of CET alone was not significantly different from vehicle-treated animals; however, PEGPH20 alone significantly inhibited tumor growth (47%, p<0.05). The combination of PEGPH20 and CET increased TGI to 70% (p<0.05) relative to vehicle. In conclusion, PEGPH20 treatment of HA-overexpressing tumors potentiates the subsequent anti-tumor activity of mAbs, such as CET.


    SO- PegpH20 demonstrated a significant effect on Pancreatic Ductal Tumor Inhibition ALONE- it's more than Chemoenhancement- It's Chemotherapy- Adding to the effect of Gemcitabine in Ph1b trials. It will further potentiate Abraxane and Folfirinox in current Ph2 trials.
    23 Mar 2014, 08:51 PM Reply Like
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