Genmab (OTCPK:GNMSF) and GlaxoSmithKline (NYSE:GSK) were always going to have a hard task establishing a significant foothold for their anti-CD20 antibody Arzerra in the face of entrenched competition from Roche’s (OTCQX:RHHBY) similar product Rituxan, which generated sales of $5.7bn last year and has been on the market for 12 years.
Data announced late last night suggest the new drug still has much to prove. A pivotal trial in Rituxan refractory patients with non-Hodgkins lymphoma (NHL) generated a disappointing overall response rate of 10%; the company was banking on at least 20% whilst many analysts were hoping to see 30% or 40%. With plenty of data still to come on Arzerra an accurate picture of its efficacy has yet to be painted, but investors are becoming increasingly nervous. Shares in Genmab plunged 32% to a three-and-a-half year low today on concerns about lost milestone payments, slower sales and the ultimate value of the drug.
The results announced yesterday do not look good enough to win approval in NHL, even in this refractory setting where patients are very ill. This is disappointing in itself, however adding to that disappointment is that the read out has dashed hopes of early off-label sales in NHL.
Arzerra is not on the market yet; the companies are waiting to hear on FDA approval by October 31 in chronic lymphocytic leukaemia (CLL), again in a refractory setting. Once on the market, doctors may have been tempted to try the drug with refractory NHL patients, had the trial shown encouraging response rates.
Many analysts believed that refractory NHL, in a second or third line setting, was likely to be a key revenue generator for Arzerra. Consensus data from EvaluatePharma has Glaxo booking sales of $536m in 2014, a figure that might now creep down.
For Glaxo this is not a huge concern, but for Genmab the set back in NHL has a tangible impact, and not just because of lost royalties. The Danish company lowered full-year revenue guidance by Dkr450m to Dkr750m ($142m) today mainly due to the exclusion of a milestone payment that would have been received had the trial succeeded. This implies a chunky payment, much higher than many analysts were anticipating, and highlighting how valuable the companies saw this opportunity.
Larger and longer
It seems likely that a much larger pivotal trial will now be needed in NHL before a filing can be made to regulators, suggesting a significant delay. Lisa Drakeman, chief executive of Genmab, told EP Vantage this afternoon that talks with Glaxo about further development are underway and plans should be announced “in the near future”.
Ms Drakeman agreed that the results do not look adequate to support a filing, but said she does not expect a read through to other NHL studies. A phase II trial in front line NHL patients is due to report this quarter.
“These patients were extraordinarily refractory. We were very encouraged by the activity in patients refractory to prior rituximab monotherapy, where the response rate was 22%,” she said.
The impending phase II front line study will now be watched with added interest. However, the results today prompted many analysts to reiterate a belief that a head-to-head trial between the two drugs might be required.
Ms. Drakeman said there is a plan to look at such a trial in NHL, but neither Glaxo nor Genmab has yet committed to such a move. This would be a bold and expensive step, not to say high risk, but ultimately might be needed if Arzerra is to grab a significant foothold in front line NHL. The partners need to prove that the drug has at least the same efficacy as Rituxan if doctors are to be persuaded to give the drug a go.
There is a raft of data due on Arzerra over the next few months, in both NHL and RA, and much more promising results are going to be needed to reinject some confidence into this project. The ultimate question for Arzerra has always been, will the product be a bio-better, or a bio-similar, to Rituxan? Investors appear to be taking the position that the latter now looks more likely.