Tyme's Radical Approach To Fighting Cancer Could Be A Blockbuster

| About: Tyme Technologies, (TYME)


Tyme, Inc. is a clinical stage pharmaceutical company developing highly targeted cancer therapeutics to treat a wide range of oncology indications.

The company’s lead product, SM-88, is a drug cocktail of four drugs (three of which are FDA approved) that work synergistically to target unique metabolic features of cancer cells.

SM-88 was tested in a proof-of-concept clinical study in 30 Stage IV metastatic cancer patients; results showed a 20% overall response rate and 72% with stable disease.

Tyme is currently assembling an Investigational New Drug (IND) filing to conduct a Phase 2 clinical trial in 80-120 metastatic breast cancer patients.

We view Tyme as an intriguing play in the oncology space and rate the shares a ‘Buy’ with a $12 price target.

By Jason Napodano, CFA & David Bautz, PhD

We are initiating coverage of Tyme, Inc. (OTCQB:TYMI) with a Buy rating and a price target of $12. Tyme is a pharmaceutical company that is developing unique oncology therapeutics designed to exploit the aberrant metabolic characteristics of cancer cells that make them susceptible to subtle shifts in nutrient availability. The company's lead candidate, SM-88, is a propriety drug cocktail that was developed to attack the altered metabolic profile of cancer cells while sparing normal tissue. The company is initially targeting metastatic breast cancer patients who have exhausted all traditional chemotherapeutic and "targeted" treatment options.


Globally, approximately 14 million people are estimated to develop cancer in 2015, with roughly six million in developed countries and eight million in developing countries (American Cancer Society). This number has been projected to grow to approximately 22 million cancer cases and 13.2 million deaths worldwide by 2030, driven by the aging of the global population and continued prevalence of environmental factors, such as tobacco consumption, which represent known drivers of cancer. It is estimated that roughly 1.7 million individuals develop one or another form of cancer each year in the U.S., and that approximately 600,000 deaths occur each year in the U.S. from these various malignancies. The National Cancer Institute (NCI), which was originally established in 1937 with an annual budget of $700,000, currently spends approximately $6 billion each year to research and develop cures for the different types of cancer that are now known to develop. Virtually every organ and tissue type in the human body is potentially prone to the development and uncontrolled proliferation of aberrant cells, which is the hallmark of cancer.

While there are an estimated 15 million Americans currently living with cancer or who have survived cancer (i.e., achieved remission from disease), the continued increase in incidence rates and the fact that cancer remains one of the leading causes of death globally mean that cancer remains a significant unmet medical need and a considerable public health problem. One in every eight deaths is due to cancer; it is the leading cause of death in developed countries and the second-leading cause of death (after heart disease) in developing nations (World Health Organization). Existing therapeutic approaches are often either only palliative (addressing the symptoms without meaningfully enhancing survival) or marginally effective (adding a few months or even only weeks to the patient's expected survival time), while remaining highly burdensome from a safety and tolerability perspective. The consequences of chemotherapy and radiation are well known to the public as most people know of someone who has received either treatment. Safe, effective treatment of cancer today remains more of a challenge than ever.

Cancer Survival Rates Highly Dependent on Cancer Stage

Staging refers to determining how much cancer is in a patient's body along with where it is located. Oncologists use staging to help plan treatment and to predict a patient's prognosis. While most cancers are staged, some, such as leukemia (cancer of the blood), are not staged as they are spread throughout the body.

While many staging systems have been developed, the most widely used is the TNM Classification of Malignant Tumors, which is maintained by the Union for International Cancer Control (UICC) such that there is one globally recognized standard for classifying cancer. In the TNM system, each cancer is assigned a letter or number to describe the tumor, node, and metastases.

  • T stands for the original (primary) tumor.
    • Tx = tumor can't be measured.
    • T0 = no evidence of a primary tumor.
    • Tis = carcinoma in situ (cancer cells only growing in superficial layer of tissue with no growth into deeper tissues.
    • T1, T2, T3, T4 = describes tumor size and/or amount of spread; the larger the T number, the larger the tumor and/or more it has grown into nearby tissue.
  • N stands for nodes. It tells whether the cancer has spread to the nearby lymph nodes.
    • Nx = lymph nodes can't be evaluated.
    • N0 = no cancer in nearby lymph nodes.
    • N1, N2, N3 = describes the size, location, and/or the number of nearby lymph nodes with cancer; the higher the N number, the greater the cancer spread to nearby lymph nodes.
  • M stands for metastasis. It tells whether the cancer has spread to distant parts of the body.
    • M0 = no sign of distant cancer spread.
    • M1 = cancer has spread to distant organs or tissues.

Once the T, N, and M values have been determined they are combined to assign an overall stage. For most cancers, the stage is a Roman numeral from I to IV, where stage IV is the highest and means that the cancer is more advanced and has spread.

  • Stage 0. Also known as carcinoma in situ, this is an early form of cancer where there is a flat lesion but no invasion of malignant cells into the surrounding tissue. Although this can develop into full-blown cancer, some doctors do not consider this as cancer but "pre-cancer."
  • Stage I. Tumors in this stage are usually smaller than 2 centimeters (CM) in diameter and are localized to their site of origin. Lymph nodes are not affected and there is no sign of metastasis (spreading to other parts of the body).
  • Stage II. Tumors in this stage measure 2-5 cm, but are still localized to their site of origin since they have not invaded other tissues or metastasized. Local lymph nodes may be affected. Stage II tumors are considered to be locally advanced tumors.
  • Stage III. Tumors in this stage are fairly large, measuring more than 5 cm in diameter. This late, locally advanced stage affects nearby lymph nodes and it may be difficult to differentiate from stage II cancer.
  • Stage IV. Tumors in this stage may be of any size, affecting nearby lymph nodes and showing evidence of metastasis to other organs or regions of the body. A secondary cancer may develop during this stage. The overall physical and mental health of the patient may be affected and the historical survival rate is very low. The outlook for patients diagnosed at this point in the disease represents the most clarifying indication of the importance of catching cancer early, before metastasis has occurred and prior to the possible development of drug resistance-conferring mutations.

Cancer stage is assigned when a person is first diagnosed before any treatment is given. An important point to remember is that the stage does not change over time no matter if the cancer shrinks, grows, spreads, or reappears after treatment. The cancer is still referred to by the stage when it was first diagnosed; however, additional information may be added to better describe the current situation. For example, a woman diagnosed with Stage II breast cancer that had the cancer respond to treatment and disappear only to return and spread to her bones still has Stage II breast cancer. The current diagnosis would just be amended to say "Stage II breast cancer with bone metastases".

Cancer survival rates are often used to describe what percentage of patients with a certain cancer would be expected to be alive after a given length of time. Cancer statistics are often expressed in terms of five-year overall survival. For instance, if the five-year survival rate for a given cancer was 78%, that means 78 out of 100 people diagnosed with that cancer would be alive after five years, while 22 out of every 100 would be dead.

The survival rates for patients diagnosed with Stage IV cancer are decidedly sobering. The following chart shows what percentage of lung cancer diagnoses are made for each stage along with the five-year survival rates for those stages (Localized is considered Stage I or II, Regional is Stage III, and Distant is Stage IV). The survival rates plummet for patients diagnosed with late-stage disease.

The above chart demonstrates that, while the prognosis for surviving lung cancer if it is caught in the early stages - before it has metastasized (i.e. spread from its initial location to other sites in the body) - is relatively good, the likelihood of remaining alive five years post-diagnosis if the cancer is already Stage IV is very poor (only 4%). This underscores the significance of the problem remaining today despite the fact that cancer patients overall are living six times longer now than they were in the 1970s (NIH Factsheet on Cancer).

Essentially all Stage IV cancers are associated with a grim prognosis compared to earlier stages of the disease. While the five-year survival rate is only an estimate, as many factors influence the progression of disease, the following table summarizes the very low five-year survival rates for different types of Stage IV cancers, with the data showing a clear need for better treatment options for these patients.

Current Treatment Options Insufficient for Late Stage Cancer Patients

The standard-of-care treatment for cancer diagnosed at its earliest stages involves localizing the problem. Typically, patients will undergo surgical intervention to remove a tumor with the hope that the cancerous tissue can be removed entirely before it has a chance to spread. Surgery is often accompanied by radiation (external beam, intraoperative, or brachytherapy). Both surgery and radiation can be deployed in combination with chemotherapy. Treatment of cancer if detected early is typically successful, as judged by the high five-year survival rates for early stage cancers. This has been aided by the huge advancements made in the development of successful cancer treatments, as shown in the chart below.

While a multitude of anti-cancer agents has been developed and commercialized over the past 50 years, they remain relatively ineffective when deployed against late-stage cancers and their side effects can be considerable and highly debilitating. In addition, patients with Stage IV cancer and their physicians choose treatment options to extend life, not to find a cure, as there remain few treatment options that offer the possibility of a complete response in a late stage cancer patient. Different types of chemotherapy remain the standard of care for late stage cancer patients, however the side effects of chemotherapy can be substantial and these side effects can impact quality of life, functional independence, and overall well-being. Therefore, we believe that therapeutics that target late stage cancer are desperately needed as there is a total lack of safe and effective treatments for patients suffering from late stage cancer.

SM-88 Overview

Tumor cells are metabolically distinct from normal cells as a direct result of the modulation of intracellular signaling pathways that are altered by different genes through mutation and/or increased expression. Altered signaling pathways not only enable cells to adapt to tumor cell metabolism, but several of these metabolic alterations are also essential for malignant transformation (DeBerardinis et al., 2008). However, these altered signaling pathways also represent opportunities for therapeutic intervention, as a slight perturbation in nutrient availability is enough to send the cancer cell into distress. SM-88 is based on attacking various points of a cancer cell's unique metabolic profile, and - as opposed to most current cancer treatments that target one or two signaling pathways - it is designed to attack at least three separate metabolic pathways that render the cancer cell incapable of acquiring the necessary nutrients to rapidly divide. This ultimately pushes the cell into senescence or cell death.

Unlike most cancer treatments, which are developed by trained medical researchers and tested in animal models, SM-88 was developed by an engineer - Steve Hoffman (Tyme's current CEO) - who became interested in the manner by which electromagnetic radiation killed tumor cells. He scoured the medical literature in a way that was different from the approach typically taken by classically trained cancer investigators. In this approach, tumor cells were viewed to be vulnerable due to the aberrant nature of their metabolism, and mechanisms defined in the literature were invoked both serially and in parallel to attack tumors using already developed agents. Also unusual was the conscious decision to eschew the use of any preclinical models to test the underlying assumptions in animals. Rather, based upon extensive reading and an effective understanding of the medical literature, a theoretical approach was developed to attack and kill tumor cells selectively while sparing normal cells; and this was then tested in people. Thus far results have been quite encouraging - all while sparing late-stage cancer patients the debilitating side effects associated with chemotherapy, most of which are directly linked to chemotherapy's lack of specificity (i.e., its targeting of any rapidly-proliferating cells).

SM-88 Proof-of-Concept Trial

In November 2011, Luminant Biosciences (the precursor company to Tyme) filed for approval of a clinical trial for SM-88 (then known as SMK) with the Institutional Review Board (IRB) of New York Downtown Hospital. The company enrolled 30 patients with advanced metastatic cancer in the single-center, open-label, proof-of-concept clinical trial. The purpose of the trial was to determine the safety, tolerability, and efficacy of SM-88 in subjects with advanced metastatic cancer. Additional exploratory endpoints were the assessment of progression free survival, objective response rate, duration of response, overall survival, and patient reported outcomes including health-related Quality-of-Life ((QoL)) and disease/treatment-related symptoms. Between January and December 2012 30 subjects were enrolled into the study. The patient population was comprised of 14 breast cancer, 4 non-small cell lung cancer, 3 pancreatic cancer, 2 prostate cancer, and one each of small cell lung, hepatic, tongue, appendix, thyroid, colon, and cancer of an unknown tissue of origin. The patients had failed all available anti-cancer treatments and each was given less than one year to live.

Patients received one to 10 courses of therapy, with each course consisting of daily SM-88 administration, five days per week, for a total of six weeks. The therapy was well tolerated, with all drug related adverse events occurring within the first treatment cycle, with the exception of hyperpigmentation, which eventually occurred in all patients. Drug-related or possibly drug-related adverse events (AES) were mild-to-moderate, self-limiting, and did not require therapy and are shown in the following table.

It is noteworthy that common side effects of chemotherapy - such as nausea, vomiting, various other gastrointestinal side effects (e.g., GI tract bleeding, constipation, etc.), hair loss, anemia, neutropenia, thrombocytopenia, immune system compromise, and neurotoxicity - were noticeably absent in this trial. The safety profile alone appeared to indicate that the therapy does not adversely impact normal physiological processes or harm normal cells or tissues. Long-term repeat dosing did not appear to increase the toxicity of the regimen, which is also a substantial differentiator compared to chemotherapy.

In this study, the most striking findings were on the level of tumor response and patient survival. The last assessment of tumor responses was performed on November 15, 2013 and at that time 25 of 30 treated subjects were evaluable according to the Response Evaluation Criteria In Solid Tumors (RECIST) classification guidelines (Therasse et al., 2000). The results are presented in the following table.

Evaluation of target lesions according to RECIST is defined by the following:

  • Complete Response (CR): Disappearance of all target lesions
  • Partial Response (PR): At least a 30% decrease in the sum of the longest diameter (LD) of target lesions, taking as reference the baseline sum LD
  • Stable Disease (SD): Neither sufficient shrinkage to qualify for PR nor sufficient increase to qualify for PD, taking as reference the smallest sum LD since the treatment started
  • Progressive Disease (PD): At least a 20% increase in the sum of the LD of target lesions, taking as reference the smallest sum LD recorded since treatment started or appearance of ≥1 new lesions

Evaluation of non-target lesions according to RECIST is defined by the following:

  • Complete Response : Disappearance of all non-target lesions and normalizing of marker levels
  • Incomplete Response/ Stable Disease : Persistence of one or more non-target lesion(s) or/and maintenance of tumor marker level above the normal limits
  • Progressive Disease (PD): Appearance of one or more new lesions and/or unequivocal progression of existing non-target lesions

There are a number of ways to report clinical trial data for cancer therapies (Kogan et al., 2008). Objective response rate (ORR) is defined by the FDA as the "proportion of patients with a tumor size reduction of a predefined amount and for a minimum period of time", in other words CR + PR. For the SM-88 trial, there was an ORR of 20%. Perhaps the most striking piece of data from the SM-88 trial was the 72% of patients who achieved stable disease . Interestingly, while most companies (and investors) focus on CR and ORR, a 2009 study from Japan in 602 patients with lung cancer showed very little difference in overall survival between those patients with CR/PR (16.1 months) compared to patients with SD (15.2 months) (Watanabe et al., 2009).

In recent years a number of studies have been reporting the Disease Control Rate (DCR), which is the ORR + SD. For the SM-88 trial, the DCR was 92%. The DCR was shown to be a more powerful predictor of survival than ORR in a lung cancer study (Lara et al., 2008) and in analysis of three separate breast cancer studies (Liu et al., 2011).

It should be noted that the five of the 30 patients that were not evaluable were excluded not because they were deceased, in fact they are all still alive, but because of the strict criteria that must be met for inclusion that includes having a certain number of scans available for evaluation. The excluded patients were typically missing one of the necessary scans. If included in the last assessment, the five excluded patients included three complete responses and two partial responses. Including these patients in the final analysis lifts the ORR to 33% (10/30) and the DCR to 93% (28/30), results that are quite impressive for a group of patients with Stage IV cancer.

It is impossible to directly compare the data from the SM-88 study to those generated in other oncology trials with different experimental or approved therapies, particularly since there was no control arm in the SM-88 trial. However, it is interesting to compare the data to other studies in patients deemed refractory to at least one line of chemotherapy prior to study entry. In such settings, there are examples such as the following:

Perjeta: 3.4% ORR (Zagouri et al., 2013).

Another intriguing aspect of the data from the first proof-of-concept clinical trial of SM-88 was the long-term survival of the patients from this study. As of June 2014, more than two years after the trial began, 17/30 patients were still alive and 8/14 breast cancer subjects remained alive. Accordingly, median survival had still not been reached either in the overall group or the cohort of patients with breast cancer. In an environment where next-generation therapeutics typically provide only a few extra months or weeks of survival benefit, an approach that seemingly adds years to patients' lives seems to be substantially differentiated. The charts below depict the Kaplan-Meier curves of this population.

While there is no current long-term follow-up data from this study available, it is worthwhile pointing out that even if the survival results had not improved at all from the last recorded time point, survival of >2.5 years for patients with Stage IV, disseminated disease that had been heavily pre-treated is unprecedented. The meager survival-promoting effects of currently-marketed anti-cancer agents is well-documented - a notable example is that of the Roche / Genentech drug Avastin® (bevacizumab), which has achieved the following survival results in various heavily pretreated, refractory patient populations:

  • Advanced breast cancer: no survival benefit
  • Advanced cervical cancer: ↑ 3.7 months
  • Advanced colorectal cancer: ↑ 2.2 months
  • Advanced lung cancer: ↑ 4 months
  • Advanced glioblastoma: no survival benefit
  • Advanced renal cancer: no survival benefit

Avastin® has been associated with a litany of side effects, including potentially life-threatening blood clots in the lungs, hemorrhages, nausea, vomiting, diarrhea, headaches, dizziness, abdominal pain, and reduced white cell counts. The drug's cost is also a substantial drawback - currently, Avastin® costs over $50,000 per patient for only four to five months of therapy.

Virtually all patients manifested dramatic and rapid improvements in Eastern Cooperative Oncology Group (ECOG) performance status (PS), European Organization for the Research and Treatment of Cancer (EORTC) quality-of-life (QoL) measures, and self-reported pain scores during the first six-week course of treatment. These changes were rapid, dramatic, and durable in nature, as shown in the following charts for all treated patients and for just breast cancer (BC) patients. Once these improvements had occurred, they persisted. Only one patient in this trial entered with an ECOG PS of 0, and 14 patients had a PS of 0 after six weeks of therapy. It is worth noting that the patient with an ECOG PS of 4 improved to a PS of 1 during this time. A dramatic improvement in self-reported pain was seen in all patients. Four patients entered the trial with no pain, which improved to 12 patients by the end of the initial six weeks. The impact of SM-88 therapy on these outcome measures could be considered even more differentiating than the impact on survival, because there are virtually no therapeutic agents currently marketed to treat cancer that are capable of providing these kinds of benefits to patients.

The EORTC QLQ C30 quality of life assessment tool incorporates nine multi-item scales, five functional scales (physical, role, cognitive, emotional, and social), three symptom scales (fatigue, pain, and nausea and vomiting), and a global health and quality-of-life scale. Unlike the pain and performance status scales in which low scores are good, the EORTC QoL goes from 0 = worst QoL to 7 = best QoL. Eleven of the 30 treated patients entered the study with excellent or near-excellent QoL ratings; by the end of the first six weeks, 23/30 patients fell into this category.

Anecdotal evidence of efficacy has also been gathered from additional patients, who were treated on a compassionate use basis. Among the more striking cases were:

  • The report of an 18-year old male with Stage IV Ewing's sarcoma and bone metastases, who had previously been treated aggressively with surgery - including the removal of a kidney - to no avail, and who was also treated with various chemotherapeutic drugs (cyclophosphamide, vincristine, doxorubicin, irinotecan, and temozolomide), without success and who was given weeks to live, yet who exhibited a dramatic response to SM-88 treatment and who is still alive roughly nine months post-SM-88 dosing;
  • A 22-year old male with Stage IV non-Hodgkin's lymphoma (NHL), who was refractory to radiation, chemotherapy, and targeted therapy (brentuximab vedotin, known by the trade name Adcetris®) at the time of treatment with SM-88, who achieved a complete response after less than two months on treatment;
  • A 56-year-old male with Stage IV prostate cancer, who experienced normalization of prostate-specific antigen (PSA) levels after only two weeks of treatment with SM-88. The compassionate access experience provides further evidence of the broad-spectrum activity achieved with this approach, as well as the activity across both solid and liquid tumor types.

In summary, SM-88 appears to be a safe and well-tolerated therapeutic regimen that induced unexpected increases in survival in a variety of Stage IV patients with many different tumor types, along with rapid and profound improvements in performance status, quality-of-life, and pain outcome measures in all treated patients. It is noteworthy that these responses occurred in "salvage" patients with fully disseminated Stage IV tumors who had failed all prior therapies - many of whom were referred by Memorial-Sloan Kettering Cancer Center (MSKCC) in New York City, as no approved treatment options remained for these patients.

Mechanism of Action Hypothesis

Tyme has a fundamentally different approach to thinking about the origins of cancer that in turn guides the approach taken to both better understand and treat the disease. The insights developed by Tyme are based on the well-established understanding that tumor cells have an altered metabolic profile compared to normal tissue. Cancer cells do not use the typical method of energy production to generate adenosine triphosphate (ATP) from glucose, in which 32 molecules of ATP are produced from each glucose molecule (oxidative phosphorylation) and about 2% of the utilized oxygen gives rise to free radicals, also known as reactive oxygen species (ROS). Rather, cancer cells rely solely on glycolysis, an inefficient process that only generates two molecules of ATP from each glucose molecule and which gives rise to significantly higher levels of ROS. As a result, cancer cells are continually taking-up nutrients while simultaneously existing on the edge of free radical damage. They require a very high level of nutrients to burn for energy and for biosynthesis of proteins, lipids, and nucleic acids due to their hyper-proliferative state. Cancer cells have a preferred order to their diet, starting with available glucose and in absence of sugars, the cancer cell will switch to amino acids and ultimately lipids.

Cancer cells' hunger and aberrant energy metabolism create an opportunity to intervene in the tumor cell life cycle in a manner that kills cancer cells without damaging normal healthy tissue. Tyme accomplishes this by using combinations of approved drugs at lower doses than usual and with novel amino acid isomers that have never before been used in man. Tyme has developed a drug methodology that compromises the unique metabolic attributes of cancer cells that ultimately weakens the cancer leading to repeatable induced necrosis of the cancer cells.

In summary:

  • The first component of Tyme's proprietary regimen creates an artificial ketogenic state in the body. The cancer cells respond to this signal of loss of available glucose as a food supply and the tumor cells in turn increase their uptake of amino acids. Cancer cells have a preference for certain amino acids, and because the same agent potentiates a system in the cancer cell called LAT1 transfer, the cell can be compelled to less selectively consume nutrients during this induced starvation reaction.
  • Tyme provides modified amino acids as part of the treatment regimen that the cell uses avidly, but which are actually non-nutritive. The effect is to impair protein synthesis, thus resulting in an inability for the cancer cell to perform a variety of cellular functions.
  • A third component of the regimen stimulates the liver to produce increased cholesterol and related molecules. These lipids are the source of much of the free radical generation in the body, and with the increased uptake of cholesterol and lipids by cancer cells to support the hyper-proliferative state they gain entry into the cell and can be exploited to generate an abundance of free radicals.
  • Fourthly, another catalytic molecule is contained in Tyme's SM-88 product that increases the availability of electrons to be used in the generation of free radicals. This has a number of effects, which include:
    • Free radical damage to the cell membrane itself, making the cell leak its contents,
    • Free radical damage to "lipid rafts" in the cell membrane which are scaffolds that anchor a variety of membrane receptors and signaling molecules that regulate cell function,
    • The stimulation of high levels of free radicals in the mitochondria, where ATP is produced and which are sensitive to free radical damage. Polar lipids produce more free radicals than the mitochondria can neutralize and the resultant damage to the mitochondria results in a catastrophic loss of energy production and rapid cell death.

Cancer cells are thus killed in a process that has little effect on healthy tissue, and, with natural agents as the inducers of necrosis, these agents are able to cross the blood-brain barrier (BBB) and other difficult-to-access, boundary-protected organs and tissue.

Since three of the four components of the regimen are based on "repurposed" agents - drugs that have been approved and marketed for many years to treat non-cancer-related conditions - and since these agents are deployed in the context of SM-88 at dosages far below the levels that they are marketed and used at currently, there are unlikely to be safety issues associated with them in the current cancer treatment context. The fourth component of SM-88 is a modified version of an existing, naturally occurring amino acid. The only modification made involves rendering this version non-nutritive. Given these considerations, it appears reasonable to assume that SM-88 can be advanced through clinical development and regulatory review without the safety considerations attendant upon de novo compounds. The multi-factorial nature of SM-88 and the fact that it targets the principles underlying cancer itself - regardless of the cell type or tissue of origin - should enable this therapy to provide benefit across multiple forms of cancer, including both solid and liquid tumors, and evade resistance.


In the Phase 1 clinical trial, 14 of the 30 patients had metastatic breast cancer, thus Tyme has elected to initially focus on this cohort of patients for the Phase 2 trial. The company is currently in the process of finalizing an Investigational New Drug (IND) application for submission to the NDA. The trial will likely be a multi-center study involving 80-120 Stage IV breast cancer patients who have failed multiple prior chemotherapeutic/targeted treatments. The IND is scheduled to be filed during the summer of 2015 with the Phase 2 trial initiating in the third quarter of 2015.

According to the American Cancer Society, there were approximately 230,000 cases of invasive breast cancer diagnosed among women in 2013. It is estimated that between 6-10% of those cases are Stage IV at the time of diagnosis, and of the cases that are diagnosed as Stages I-III, approximately 25% will have recurrence with metastases (Metastatic Breast Cancer Network). This represents an initial target population of approximately 76,000 patients.

Substantial Growth Potential

One of the most important findings from the Phase 1 study was the fact that SM-88 appeared to have activity against a wide range of cancers regardless of the tissue or organ of origin. This means that Tyme could generate significant peak sales with SM-88, given the drug's possible deployment in both solid and liquid tumor types. While most oncology drugs are being targeted towards smaller and smaller patient populations, usually with the aid of diagnostic biomarkers that are designed to predict responsiveness, the Tyme approach appears to be universal to all forms of cancer, irrespective of the tissue of origin or immune status. It exploits the aberrant metabolic characteristics that differentiate all cancer cells - regardless of tissue type or organ of origin - from normal tissue.

In addition to the wide potential applicability, SM-88 has already demonstrated a more favorable safety profile vs. Avastin® and similar "targeted" therapeutics. Since it is based on existing approved agents being administered at low doses there does not seem to be a significant likelihood of greater toxicity being revealed in future clinical trials.

Several of the world's top-selling drugs are anti-cancer agents, e.g. Avastin® (bevacizumab). Sales of Avastin® are projected to exceed $7.5 billion by 2018. Herceptin® (trastuzumab) is a breast cancer drug specifically for patients that harbor overexpression of the cell surface receptor HER2, which occurs in approximately 20-30% of breast cancers (Bange et al., 2001). Even with the limited patient population, Herceptin® still generated approximately $6.6 billion in revenue in 2013. Herceptin® was originally approved in part based on data showing that it increased overall survival in HER2 overexpressing metastatic breast cancer patients who had received no prior treatment for metastatic disease from 20.3 months to 25.1 months (Herceptin Prescribing Information). Another study involving patients with HER2 overexpressing metastatic breast cancer that had relapsed following one or more prior chemotherapy regimens for metastatic disease reported an ORR of 14% with a 2% CR rate and a 12% PR rate. The results from the Phase 1 trial of SM-88 far exceeded results seen with Herceptin®, thus replication of those results in a larger patient cohort could potentially drive SM-88 to be not just a treatment for late-stage metastatic cancer patients, but a front-line therapy for early stage patients. This scenario could make SM-88 a potential blockbuster drug while not even factoring in additional indications.

Valuation Methodology

We have chosen to conservatively model potential sales of SM-88 solely in late-stage, metastatic breast cancer patients. However, based on what appears to be a broad applicability across multiple tumor types this analysis may ultimately be too restrictive if the results seen in the Phase 1 trial are replicated in a larger clinical trial. The possibility of broader applicability into other types of cancer - e.g., renal cell carcinoma, Ewing's sarcoma, lymphomas and leukemias - could represent sources of upside to our estimates. No revenue from an expanded access program is assumed, which may be conservative - companies like Pharmion and Celgene generated tens of millions of dollars from such programs prior to the actual formal approval of several of their anti-cancer drugs.

We are estimating pricing of SM-88 in relation to the per cycle cost of Tykerb® (lapatinib), a tyrosine kinase inhibitor developed and commercialized by GlaxoSmithKline that is currently deployed as second-line therapy in metastatic breast cancer. Tykerb® is priced at roughly $6,000 per 30-day cycle. We estimate SM-88 will cost $10,000 per cycle in the U.S. and $8,000 per cycle in the E.U. In addition, we are projecting a median seven cycles of therapy to be administered per patient. The combination of Tykerb® and Xeloda® (capecitabine), another broadly-utilized chemotherapy drug, carries a per-cycle cost of nearly $11,000, thus our pricing appears to be in-line with other widely used agents. However, given the relatively low survival benefit typically associated with Tykerb® in late-stage patients - not to mention its side effect profile - there may be the possibility for higher per cycle pricing, particularly in light of the pharmacoeconomic benefit argument that may be made for an agent that both provides substantial survival benefits as well as enhancement of patient well-being, thus reducing reliance on supportive care, painkillers and other cost drivers.

We model for Tyme to initiate a Phase 2 trial in late 2015, a Phase 3 trial in 2017, with an NDA filing in 2018 and approval in the U.S. in 2019, with approval in the E.U. coming in 2020. It should be noted that exceptional results, like those seen in the Phase 1 trial, in a larger group of patients could warrant expedited approval of SM-88 after the Phase 2 trial is completed under the FDA's accelerated approval program (perhaps through evidence of tumor shrinkage in patients). While this is certainly a possibility, we choose to conservatively estimate that SM-88 will go through the normal approval process and all three phases of clinical testing.

Given a 20% discount rate, a 30% chance of approval, peak revenues in the U.S. and E.U. of approximately $3.3 and $3.0 billion, respectively (with a 15% royalty generated through a partnership on sales in the E.U.), we arrive at a net present value for SM-88 in metastatic breast cancer of approximately $1.1 billion. We add in the company's current cash total ($5 million) and an estimated $50 million in capital requirements to arrive at a present value of approximately $1.05 billion. The company currently has 86 million shares outstanding, thus equating to a fair value for the stock of approximately $12 and we are assigning a 'Buy' rating to the shares.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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