Learn How To Invest Against Acute Myeloid Leukemia, One Of The Fastest-Growing Cancer Markets

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Includes: ABBV, AGIO, ALPMY, ARGX, AST, ATNM, BLRX, BMY, CELG, CTIC, CYAD, CYCC, DSKYF, GERN, GILD, IMNP, JAZZ, KIADF, MBRX, MEIP, NLNK, NVS, PFE, RHHBF, SLS, SNY, SYRS, TKPYY
by: Zach Hartman
Summary

Acute myeloid leukemia is the subject of major research and development.

Investors interested in cancer should definitely be aware of AML and the ongoing developments.

This article focuses on the basics of AML, recent approvals, and gives an overview of the drugs in development.

The most important weapon we as investors have in our arsenals is knowledge. Many of the people I've spoken with on Seeking Alpha and other forums have demonstrated keen awareness of the clinical pipeline for their company of interest. However, it is often difficult for them to place the results within a framework that helps them rationally gauge the real risk.

Today, I want to help you get up to speed on a particularly hot area that is getting hotter: acute myeloid leukemia. I will also be providing you with a rundown of most of the companies currently operating in that space.

So if there is anything that confuses you about this disease, or if you have never heard of AML, keep reading! At the end, I will be describing how I'm delivering other material that will be useful for anyone interested in investing in this space.

Note: I have developed a short list of key terms that you will run into frequently in AML. Click here if you are interested in seeing that.

What is this disease?

According to the American Cancer Society, in the United States cancers of the blood, bone marrow, and lymphatic system (the hematologic malignancies) account for roughly 10% of all new cases of cancer as of 2018. The major classifications of hematologic malignancies include lymphoma, myeloma, and leukemia, and they are sorted out based on the cells of origin.

Acute myeloid leukemia (AML) accounts for roughly one-third of all new cases of leukemia in the United States, with 19,520 new diagnoses in 2018. But in terms of deaths it remains a serious unmet need, accounting for just over 10,000 of the 24,000 deaths from leukemia (44%). In essence, it’s not the most common form of leukemia, but it causes the plurality of leukemia-associated deaths.

You will often see two distinct forms of AML described in the literature: primary and secondary.

  • Primary AML: Arises spontaneously, not due to a previous condition
  • Secondary AML: Arises after progression of a myelodysplastic syndrome or myeloproliferative neoplasm (eg, myelofibrosis)

AML has the distinction of being mainly associated with older adults, with incidence maxing out as you get to age over 70 years:

Source: Juliosson, et al. 2009, statistics from a Swedish patient registry

Older age corresponds with worse outcomes from cancer therapy in general, and this can be particularly challenging in the case of AML (more on that later).

This form of leukemia is also one of the more common “treatment-related” malignancies. That is, cancer arising from other treatments the patient may have received, such as immunosuppressive therapy for a rheumatoid condition, or chemotherapy/radiation for cancer treatment.

How is it currently treated?

Management of AML overall is undergoing a profound evolution at this time, most notably due to a rush of drug approvals starting in 2017. In addition, clinical research is catching up to other forms of cancer in terms of risk assessment and diagnosis. Crucially, we now have a much better understanding of what drives AML’s “risk” status on the molecular level, and the European LeukemiaNet put out revised recommendations for evaluation in late 2017, to much fanfare in the clinical oncology community. Now, clinicians can classify patients into “favorable,” “intermediate,” and “adverse” risk groups based on the kinds of mutations they see in the leukemic cells. And this can help to guide the clinicians on how aggressively to attack the cancer.

The European LeukemiaNet recommendations also now include criteria for detecting so-called “minimal residual disease.” This is based on over a decade of work showing that if you can destroy the leukemia past a certain level of detectability, then patients have a better chance of surviving for longer periods of time. This might mean that we can tailor therapy to exactly how well a patient is responding in the near future, but it is also a challenging technique to implement on the wide scale, and clinicians are not quite yet sure how trustworthy it is when it comes to making decisions.

Induction therapy

Therapy for AML has generally been the same for decades, especially in the first-line setting. If you’re not too old and frail, you undergo a multiagent chemotherapy regimen. The standard treatment option here is the “7+3” regimen, which consists of two chemotherapies, cytarabine and daunorubicin, given for 7 days and 3 days, respectively. Following 14-21 days of this therapy, the clinician re-evaluates the disease to see how it is responding. If there is significant residual disease, then the patient will be hit again with cytarabine or cytarabine plus daunorubicin, depending on the patient’s condition (Note: now, we also have an alternative option that may be better tolerated with similar efficacy, which we’ll get to later). However, if the patient achieved a pretty good response, then attacking again with cytarabine-daunorubicin is the recommended step, with the hope of achieving a complete response.

After these rounds of induction chemotherapy are complete, the clinician will look for evidence of a complete response. This is defined as a total elimination of the cancer cells from the blood, and a greater than 95% reduction of cancer cells in the bone marrow. In addition, the bone marrow has recovered in function, indicating a return to normal biology. Anything other than a complete remission is deemed a failure, at which point clinicians will have to decide how aggressively they want to attack in order to achieve a remission.

Consolidation therapy (particularly stem cell transplants)

But despite its name, complete remission is not enough to ensure long-term control. In younger patients (those under 60 years of age), clinicians will often opt to deliver “consolidation” therapy, an attempt to wipe out any remnants of the cancer. This is where the risk factors come into play. Patients with higher risk of relapse due to mutational or other molecular features will be treated more aggressively. This can go as far as performing an allogeneic hematopoietic stem cell transplantation (abbreviated allo-SCT).

Now, an allo-SCT is worth discussing on its own, and it is in fact an entire field of therapy unto itself, with certain clinicians and treatment centers devoted to this technique. It is an incredibly important tool in the arsenal of hematologic cancers, but it’s also a very risky tool.

The treatment is a two-step procedure. First, patients receive a conditioning regimen consisting of high-dose cytotoxic therapy, which can be chemotherapy or radiation delivered to the entire body. The patient’s bone marrow is one of the most sensitive tissues to radiation and chemotherapy (which is why anemia and low platelets are so often adverse events of concern in patients who are undergoing cancer therapy). This round of treatment nukes the entire bone marrow, with the hope of pushing cancer deeper into the depths.

Now, the patient won’t survive long without a blood factory. So if the clinician can find a suitable donor (such as a close relative with as much genetic matching as possible), the patient can get a transplant of bone marrow. This does 2 things. First, it has the potential to rescue the patient’s blood cell production, and since his/her bone marrow has been wiped out, there’s no possibility of an immune response from the patient’s cells, reducing the likelihood of rejection that we see with other organ transplants.

The second thing it does is provide a “graft-versus-leukemia” effect, whereby the donor’s immunology kicks in and fights the leukemic cells, since the disease has not yet adapted to avoid the donor’s immune system. In essence, allo-SCT is both a rescue therapy and a form of immunotherapy.

The downside is the risk of complications, which can be severe. First, hitting patients with high doses of chemotherapy and/or radiation can cause a lot more toxicity than to just the bone marrow. End organs like the liver can also be severely damaged, sometimes beyond repair. In addition, there is a critical window where the patient has no immune system, making benign viruses and bacteria into deadly enemies.

Furthermore, there are issues with the donor. On one hand, it may not be possible to find a suitable donor in the time frame of therapy. On the other hand, unless you’re dealing with a donor who is an identical twin, there will be some differences in the bone marrow transplanted. This provides therapeutic effect by scavenging for traces of leukemia, as discussed above. But it can also lead the donor’s immune cells to attack the patient’s body. This is a complication called “graft-versus-host” disease, and it remains a major concern in the realm of bone marrow transplantation. We won’t get into it in this guide.

Suffice to say, although allo-SCT is one of the most powerful options we’ve had in managing blood cancers, it is highly risky. Complications from transplantation kill between 7% and 27% of patients within 100 days of treatment.

What are the unmet needs?

The unmet needs in AML are many. But they can be grouped largely into one of three groups:

  1. Better-tolerated first-line treatment options
  2. Effective options for relapsed/refractory disease, particularly in patients who cannot undergo stem cell transplantation
  3. Treatment options for mutational subgroups, such as FLT3-mutant and IDH-mutant disease

Of course, these aren’t the only areas that are being focused on, but for the purpose of investment and analysis, these provide enough meat for discussion. On point #1, it is important to remember that AML is generally a disease of old age, and with old age comes a higher likelihood that the patient is frail. In these cases, patients are unlikely to be able to handle that standard “7+3” induction regimen, and clinicians have to resort to less-effective options with a lower likelihood of achieving a durable remission.

On the second point, we run into this same issue of patient fitness, but magnified. Once a patient relapses or fails to achieve a complete remission, we quickly run out of options. More chemotherapy generally won’t help that much in these cases, so where can clinicians turn? Before a few years ago, this was basically a dead end, particularly if the patient was not eligible for allo-SCT, as is the case with many.

Third, researchers into AML disease biology have known for years that there are molecular abnormalities that contribute to the initiation and progression of AML. But for the most part they have been unsuccessful in capitalizing on these abnormalities. This is in stark contrast to diseases like breast cancer and lung cancer, where molecular characterization has driven the discovery of a boatload of effective targeted therapies that help patients, often without the need for chemotherapy.

This has not been the case with AML, at least not until recently.

Recent approvals

It’s hard to capture just how much progress has occurred in just the last few years. We went decades without a major improvement in treatment options beyond chemotherapy (the 7+3 regimen has been in use since the 1970s). In the United States, we didn’t see any approvals of targeted agents, with only a smattering of somewhat-effective chemotherapy agents that could provide marginal benefit. And if you relapsed? You might benefit from aggressive therapy, at high cost in terms of toxicity.

Then came 2017, ushering in a wave of targeted therapy for AML:

  • Enasidenib (Idhifa, approved 2017), developed by Agios Pharmaceuticals (AGIO)
  • Gemtuzumab ozogamicin (Mylotarg, approved 2017), developed by Pfizer (PFE)
  • Midostaurin (Rydapt, approved 2017), developed by Novartis (NVS)
  • CPX-351 (Vyxeos, approved 2017), developed by Jazz Pharmaceuticals (JAZZ)

Each of these drugs is approved for specific subgroups of patients, really driving home the increasingly personalized nature of the treatment of this disease.

Gemtuzumab ozogamicin

PFE's CD33 antibody-drug conjugate gemtuzumab ozogamicin has an interesting, fraught history. It rode the initial wave of hype surrounding this then-new class of therapies, getting approved in the year 2000 for patients with CD33-positive AML.

It was only available for patients over the age of 60 and who could not receive other kinds of cytotoxic chemotherapy.

However, in 2010, PFE and the FDA decided to discontinue the drug because the benefit did not outweigh the risk; a confirmatory trial called SWOG S0106 showed that patients were no better off receiving a combination of gemtuzumab ozogamicin and chemotherapy than they would have been with chemotherapy alone. Moreover, there was a serious risk of fatal toxicity with this agent. So the drug was removed from the market at the dose originally approved in 2000.

For most therapies, that would be the end of the story. But PFE pressed on with studies, particularly in healthier patients who could receive intensive therapy. Findings from the ALFA study showed that "fractionating" (dividing up) the dose of gemtuzumab ozogamicin could help improve the tolerability of the drug, and that when you add this strategy to standard therapy, you can delay disease relapse.

The FDA agreed. And gemtuzumab ozogamicin was granted approval for adults with CD33-positive, newly diagnosed AML, or for adults or children with CD33-positive, relapsed/refractory AML.

CPX-351

Standard 7+3 chemotherapy has been around for a long time because it works rather well as a first-line treatment approach. However, it comes along with the major challenge of toxicity. For older patients, in particular, this means that standard therapy is not a viable treatment option, even though it might provide disease control, in theory.

One strategy for helping to mitigate toxicity is to package the chemotherapy inside a cage of some kind, to help regulate how quickly it can reach the bloodstream. Celator Pharmaceuticals, later acquired by JAZZ, had the idea of packaging both of the agents used in “7+3” into liposomes. The interesting part is that they took the idea a step farther than just changing how the body processes the chemotherapy. Instead of aiming for the “maximum” dose of each chemotherapy agent, the scientists here took a different approach.

CPX-351 is a very specific dosing combination of cytarabine ad daunorubicin. For every 1 molecule of daunorubicin inside the liposome, there are 5 molecules of cytarabine. This was selected based on careful cell biology and animal studies, as the 5:1 ratio showed the best synergy in these models. By packaging this ratio in a liposomal, you can ensure a near-constant exposure of the cancer cells to a highly controlled dose of the two chemotherapies. This allows the oncologist to deliver treatment on a much more favorable schedule:

7+3 versus CPX-351 dosing schedule

In essence, you can theoretically achieve the same efficacy with less chemotherapy, thus improving the tolerability of the therapy! After a series of early-stage studies, CPX-351 was the subject of a phase 3 trial comparing against standard therapy for “high-risk” AML. This includes patients with “secondary” AML, meaning their leukemia was a complication of another treatment. The phase 3 trial showed that CPX-351 was able to improve overall survival rates at 12 months (41.5% vs 27.6%) and 24 months (31.1% vs 12.3%), in addition to improving the rate of patients achieving a complete response (37.3% vs 25.6%).

Based on these findings, CPX-351 was approved for newly diagnosed treatment-related AML, as well as for AML with myelodysplasia-related changes. Ongoing studies have taken a look also at patients who were at high risk for death during induction therapy. At ASH 2017, we saw some promising results in these older, riskier patients who cannot handle standard therapy. Out of 52 patients, 38% achieved a response, with median survival time of 5.9 months. This doesn’t sound like much, but considering patients in this age range don’t usually live longer than 30 days without intensive treatment

Enasidenib

Enasidenib is an inhibitor of an enzyme called isocitrate dehydrogenase 2 (IDH2), which is normally involved in helping convert sugar into energy in the body. It was developed by Agios (NASDAQ:AGIO) in partnership with Celgene (NASDAQ:CELG).

Figure 1

Source: Medeiros, et al (2017)

Mutations in the IDH 1 or 2 genes occur in around 20% of all patients with AML, with mutant IDH2 tending to be a little more common than IDH1. The enzyme product of mutated IDH1 or IDH2 causes an elevation in the level of an “oncometabolite” called 2-HG, which helps cancer cells to grow more quickly. It has been unclear for a long time how this mutation ended up affecting prognosis.

As it turns out, though, this is a good target for attack. Enasidenib was shown to be well tolerated, and it led to a response in 40.3% of patients, and these responses lasted a median 5.8 months. Patients with relapsed/refractory disease had a median overall survival of 9.3 months. Patients who achieved a complete remission had median overall survival of 34 months!

The FDA approved enasidenib for relapsed/refractory, IDH2-mutant AML in 2017. Now enasidenib is the subject of two important clinical trials. One involves using the drug as “maintenance” therapy after allogeneic stem cell transplant. The other is a phase 3 trial comparing enasidenib to conventional treatment in older (≥60 years) patients with IDH2-mutant, relapsed AML after low-intensity therapy. AGIO has also indicated that they will be running a large pivotal study to assess the use of IDH1/2 inhibitors as part of first-line therapy for AML; however, as of July 2018, this study has not been initiated.

Midostaurin

Mutations in the FMS-like tyrosine kinase 3 (FLT3, pronounced “flit 3”) occur in between 13% and 27% of all cases of AML, with older age reflecting a higher likelihood of having this mutation. Unfortunately, however, unlike its cousin blood cancer, chronic myeloid leukemia (NYSE:CML), targeting this kinase hasn’t had the same success as we’ve seen with drugs like imatinib (Gleevec).

Part of the problem has been an inability to discover FLT3 inhibitors that are active enough, so even though we’ve known about the commonality of FLT3 mutations for over 20 years, we haven’t had any tools to exploit the mutations. All we knew was that for many patients, FLT-3 mutation meant they would have a worse prognosis.

Note: FLT3 mutations come in two main varieties. The first is a “point mutation” in the kinase domain, which is where a single amino acid is switched, causing a change in the activity of the enzyme. The other is called an “internal tandem duplication,” abbreviated “FLT3-ITD.” This causes part of the FLT3 receptor to stretch out, messing with the natural regulator of FLT3 activity and allowing it to turn on more often. FLT3-ITD is general considered worse for patients, and it is still an unmet need.

Midostaurin (Rydapt) was the first FLT3 inhibitor to show clear activity in FLT3-mutated AML. The phase 3 RATIFY study was first presented at ASH 2015, and it was subsequently published in the New England Journal of Medicine. RATIFY included patients with newly diagnosed, FLT3-mutated disease, and therapy consisted of either standard induction and consolidation with chemotherapy, plus either midostaurin or placebo.

While it did not significantly improve the rate of complete remission, midostaurin improved both event-free survival and overall survival in patients. Overall, the risk of death was 22% lower in patients receiving the targeted therapy.

Findings from RATIFY led to the approval of midostaurin in April 2017; however, because it is relatively nonspecific for FLT3, there remained an unmet need for more selective and potent inhibitors, which remain under development (see below).

The most important ongoing study for midostaurin is a phase 3 study adding the drug to standard therapy for newly diagnosed disease. In this case, however, patients must NOT have FLT3-mutated disease. The primary endpoint of this study is event-free survival. This trial is being conducted based on preliminary evidence of midostaurin in this population.

Ongoing developments (and key players)

Obviously, the research and development does not stop there. There are, of course, new generations of FLT3 inhibitors being worked on by a number of different companies. Here is a list of the current drugs that have been approved or are in development for AML.

CPX-351

Jazz Pharmaceuticals (JAZZ)

Approved

Gemtuzumab ozogamicin

Pfizer (PFE)

Approved

Enasidenib

Agios (AGIO)

Approved

Midostaurin

Novartis (NVS)

Approved

Glasdegib

Pfizer (NYSE:PFE)

NDA

Gilteritinib

Astellas Pharma (OTCPK:ALPMY)

NDA

Ivosidenib

Agios (AGIO)

NDA

ATIR101

Kiadis Pharma (OTC:KIADF)

3 (MAA in Europe)

Ceplene

Immune Pharmaceuticals (OTCQB:IMNP)

3 (Approved in Europe)

Idasanutlin

Roche (OTCQX:RHHBF)

3

Oral azacitidine

Celgene (CELG)

3

Pevonidstat

Takeda (OTCPK:TKPYY)

3

Pracinostat

MEI Pharma (MEIP)

3

Quizartinib

Daiichi Sankyo (OTCPK:DSKYF)

3

Sapacitabine

Cyclacel Pharmaceuticals (CYCC)

3

Venetoclax

AbbVie (ABBV)

3

Tosedostat

CTI BioPharma (CTIC)

3

BL-8040

BioLineRx (BLRX)

2

CX-01

Cantex Pharmaceuticals

2

Dilanubicel

Nohla Therapeutics

2

Alvocidib

Sanofi (SNY)

2

AST-VAC1

Asterias Biotherapeutics (AST)

2

Crenolanib

AROG Pharmaceuticals

2

Entospletinib

Gilead Science (GILD)

2

HDM201

Novartis (NYSE:NVS)

2

Ponatinib

Takeda (OTCPK:TKPYY)

2

Imetelstat

Geron Corp (GERN)

2 (for MDS and MF)

Nivolumab

Bristol-Myers Squibb (BMY)

2

Lenalidomide

Celgene (CELG)

2

SY-1425

Syros Pharmaceuticals (SYRS)

2

Galinpepimut-S

SELLAS Life Sciences Group (SLS)

2

Actimab-A

Actinium Pharmaceuticals (ATNM)

2

Annamycin

Moleculin Biotech (MBRX)

2

ARGX-110

argenx (ARGX)

2

CYAD-01

Celyad (CYAD)

2

JTCR016

Celgene (CELG)

1

Indoximod

NewLink Genetics (NLNK)

1

If you're interested in a file with better formatting, I am offering this spreadsheet as a free download on my website, Invest Against Cancer.

More detail available on the Total Pharma Tracker

This article provides a fairly in-depth look at the current treatment options for patients with AML. However, there is a lot more we can go into, which will help potential investors identify key ideas. You can absolutely use this resource for generating new investment ideas, or just to see what the field currently looks like.

Subscribers of the Total Pharma Tracker will be gaining access to a document that provides the following information:

  • Mechanisms of action for each drug
  • Important news items
  • Key clinical trial data presented most recently
  • Important ongoing trials
  • Insights into whether now is a good time to buy each company based on these developments.

Subscribers to the Total Pharma Tracker can also pose more questions to Avisol Capital Partners or me with respect to these or any other companies you might be curious about. One of our readers recently divulged gains equal to double the membership price of the Total Pharma Tracker based on our recommendations.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.