Roche Has Aphinity For Perjeta Trial Success, But Not Puma

| About: Roche Holding (RHHBY)
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Roche’s (OTCQX:RHHBY) Aphinity trial of Perjeta will affect not only the fortunes of the Swiss company’s breast cancer franchise but also could determine whether the upstart Puma Biotechnology (NYSE:PBYI) has much of a future at all.

Expectations are high for this trial, testing Perjeta in combination with Herceptin and chemotherapy in post-surgical patients, and a substantial part of Perjeta’s $5bn peak sales forecast must be ascribed to its success. Conversely, Puma’s neratinib, which is seeking regulatory approval in a broadly similar setting, could be rendered irrelevant by Aphinity because of Perjeta’s shorter treatment duration and lower toxicity.

Company

Roche

Project

Perjeta

Market cap

$208.6bn

Product NPV

$34bn

% of market cap

16%

Event type

Phase III data

Date

Q1 2017

Extending the franchise

Perjeta is already US-approved in combination with Herceptin in metastatic disease, and earned accelerated approval in the pre-surgical, or neoadjuvant, setting, where it has been shown to reduce the size of tumors before procedures. Aphinity tests Perjeta’s performance at preventing recurrence for women who have undergone surgery, or “adjuvant” treatment, which if successful would substantially expand the number of patients eligible for the combination of Her2-blocking agents.

Herceptin, approved broadly in Her2-expressing breast cancer, was used in 30,972 US breast cancer patients in 2015 while Perjeta was used in 10,130, according to EvaluatePharma data – although Perjeta is a comparatively young agent. Its relative youth means, however, that it figures more prominently in Roche’s valuation – at $34bn in net present value its fortunes will move the needle on the Swiss group more than Herceptin’s $18.6bn.

Expected readout of the event-driven Aphinity trial has slipped from late 2016 to early 2017, which has rattled some investors. However, some observers have noted that enrollment of lower-risk patients in the early part of the trial resulted in a slower than expected event rate.

As a drug with a fairly benign side effect profile, Perjeta might not need to show a huge benefit in invasive disease-free survival duration, the primary endpoint, Harvard University breast cancer specialist Harold Burstein told an audience of investors hosted by Bernstein. A minimum threshold would be a 2-3% improvement over Herceptin and chemo alone, Dr Burstein said.

A decision to cap the share of patients with lymph-node-negative disease at 40% could raise the odds of success as patients with node involvement are at higher risk and could show a more pronounced benefit; it also would give Roche an opportunity to score a subgroup win if there is a miss on the primary endpoint in the overall analysis.

Failure would likely result in a share price decline of SFr11, estimates Berenberg analyst Alistair Campbell. Roche shares stood at SFr240.20 in morning trading today.

Success for this combination also could help Roche fend off Herceptin biosimilars, which have been submitted to regulators in the US and Europe. Bundling Perjeta and Herceptin together at an attractive price point could be preferable to payers than negotiating separately with Roche and biosimilar manufacturers.

Puma love

Even with the slip in the readout, the timing could not be more awkward for Puma. Aphinity’s results will almost surely emerge before the FDA’s May 19 deadline on neratinib’s application.

Puma is seeking approval in an “extended adjuvant” setting, which means one year of treatment following Herceptin. The California-based group is basing its application on results of the Extenet study – begun in 2009 by neratinib’s previous owner, Wyeth – which found a 93.9% invasive disease-free survival at two years for neratinib compared with 91.6% for placebo. That is a statistically significant difference, and would be considered clinically relevant for Perjeta according to Dr Burstein’s criteria.

But the Extenet findings have several caveats caused by the change in control, especially the number of patients lost to follow-up when Wyeth/Pfizer believed that a successful outcome was unlikely (Puma files, and the battle begins, July 22, 2016).

FDA reviewers should be well aware of the Aphinity results before they make their final decision. If data are positive, they could feel less urgency to deliver neratinib to the market if it has similar benefit and a worse side-effect profile.

Moreover, Perjeta has the benefit of already being on the market, and some specialists would probably begin using it off-label in the adjuvant setting if Aphinity hits its endpoints – some insurers already authorise it here – providing headwinds to a neratinib launch.

Despite this apparent confidence, Aphinity carries with it all the binary risk of any major phase III trial. With so many betting on success, failure would lead to a volatile trading day for both Roche and Puma.

Study

Trial ID

Aphinity

NCT01358877

Extenet

NCT00878709

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