LOXO's ESMO Update On Larotrectinib - Changing Treatment Paradigms

Oct. 25, 2018 8:15 AM ETLoxo Oncology (LOXO)ARRY-OLD, BAYZF, MRK, RHHBY6 Comments
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  • LOXO presented an supplementary dataset for it lead compound larotrectinib at ESMO 2018 Congress.
  • The dataset was nearly identical to the initial data, with an ORR of 81% in patients with NTRK fusion cancers.
  • Competitor Roche revealed data on their TRK inhibitor entrectinib, which showed an ORR of 57.4% in patients with NTRK fusion cancers.
  • The FDA's approval of pembrolizumab based on biomarkers instead of tumor type paves the way larotrectinib to be approved as a "tumor-agnostic" therapy under this new paradigm.


Many investors were eagerly awaiting the update that LOXO Oncology (NASDAQ:LOXO) announced they would provide on their lead candidate larotrectinib, an inhibitor of three TRK proteins. This update was presented on 10/21/18 at the European Society for Medical Oncology (ESMO) 2018 Congress. This analysis includes data from three separate studies: the Phase I trial in adults, the SCOUT pediatric phase I/II trial, and the Phase II NAVIGATE adult/adolescent “basket” trial. What makes this situation even more interesting is that LOXO’s competitor Genentech, a subsidiary of Roche (OTCQX:RHHBY), would be presenting data on their lead TRK protein inhibitor entrectinib at the same venue, providing us a chance to compare and contrast these two compounds seeking the same indication. This piece will briefly outline the science of these agents, how a change in therapy paradigm can benefit LOXO, and an evaluation of LOXO’s fundamentals and outlook moving forward.

TRK Proteins and a Paradigm Change

Tropomyosin receptor kinases (TRK) have three forms: TrkA, TrkB, and TrkC. The genes that encode for these proteins are the NTRK genes. Genetic mutations to the NTRK genes can result in the TRK protein being fused with another protein causing the enzyme being continuously active or overexpressed. Why is this constant activity or overexpression bad? An active TRK protein results in the proliferation and survival of a cell. In normal cells these enzymes may be present at a lower level, or can turned on and off as needed in an organized fashion. When this regulation is lost, as in NTRK fusion cancers, cells grow unregulated and unchecked, out of control. This is essentially the definition of cancer. It is difficult to estimate the exact frequency of NTRK fusions, which would help estimate the market size, however it is estimated that 1 to 2% of solid

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DrStangC profile picture
A young investor. I focus on developing biotech companies that provide large growth opportunities. This sector is very risky, please use caution and do your own additional due diligence before investing. I also secondarily focus on small security and defense companies that also provide growth opportunities. I focus largely on fundamentals and rely less on technicals. I closely follow clinical trials and development leading up to approval.

Disclosure: I am/we are long ARRY. 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.

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