Idera Drops On Melanoma Data, But The Unattainable Goal Should Not Penalize It

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About: Idera Pharmaceuticals, Inc. (IDRA), Includes: BMY, MRK
by: Terry Chrisomalis
Summary

Idera Pharmaceuticals announced results from its phase 1/2 study that caused the stock to trade lower. However, the data was misinterpreted.

In the phase 1/2 ILLUMINATE-204 study, the response rate was 32.4% which is not easily attainable in a PD-1 refractory melanoma population.

Patients treated with tilsotolimod and Yervoy combination also achieved a disease control rate of 76.5%, which also is a difficult feat for this refractory population.

Yervoy alone as a monotherapy used in this PD-1 refractory melanoma population typically only obtains between a 10% to 13% response rate.

Idera has cash and cash equivalents of $82.5 million as of Sept. 30, 2018, which means that it has enough to fund its operations into the first quarter of 2020.

Recently, Idera Pharmaceuticals (IDRA) announced results from its phase 1/2 study treating patients with PD-1 refractory melanoma. The day the results were revealed, the stock closed lower by 40% to $3.98 per share. I believe that the results were good, especially when you consider the population that was treated. There's no logical reason why the stock should have tumbled by as much as it did after the release of the data.

Phase 1/2 Data

This phase 1/2 study is known as ILLUMINATE-204, and it recruited patients with PD-1 refractory melanoma. The study dosed approximately 37 patients with 8 mg of tilsotolimod in combination with Yervoy. However, there were only 34 evaluable patients with data. There are two notable results in the study that show that this combination is successful in its intended goal. The first is that 11 out of 34 evaluable patients responded to the combination treatment, with a 32.4% response rate. At least two of the responses obtained were complete responses. I would like to point out that I think the reason why this data was perceived the way it was is due to an unattainable goal. By that I mean there may have been an expectation that the response rate would be higher. I think this is a huge trap to perceive because of the context surrounding these patients. It must be noted that these were patients who had failed on prior PD-1 therapies alone. Thus the PD-1 refractory melanoma patients needing another treatment option. This was a very hard population to treat, when not even an anti-PD-1 therapy alone is successful at instigating a response. The second noteworthy result is the ability for the combination to stabilize the cancer from advancing further. At least 76.5% of the patients (26 patients out of 34 patients) taking the tilsotolimod and Yervoy combination exhibited disease control. On top of that, there are still four patients who are being dosed where data has not yet been revealed. That means this data can further be enhanced depending upon the outcome of these additional patients. The final point with respect to the data is that two of five patients with prior Yervoy treatment achieved responses. Why is this data important to point out? That's because this proves that adding tilsotolimod in combination with Yervoy can allow patients to generate a response, where otherwise they wouldn't on Yervoy alone.

Financials

According to the 10-Q SEC filing, Idera Pharmaceuticals has cash and cash equivalents of $82.5 million as of Sept. 30, 2018. It believes that this cash should be sufficient to fund operations into the first quarter of 2020. However, when a biotech states that it has enough cash until then, it may have to raise cash earlier than anticipated. This means that the company may have to possibly raise cash by mid 2019.

Conclusion

In my opinion, Idera's results are substantially good for the population that was being targeted. Especiall, when you consider it in the context for Yervoy therapy alone. The response rate for Yervoy alone, when treating this PD-1 refractory melanoma population, is between 10% to 13%. This is additional proof that the combination achieves a far superior outcome over Yervoy alone. In essence, Idera's tilsotolimod is responsible for enhancing T-cell response, when it's generally low with Yervoy alone. Further proof of efficacy lies with the current status of this program. That being a phase 3 study, known as ILLUMINATE-301, is being tested with this combination to treat patients with melanoma. These will be melanoma patients who have been treated and progressed on treatment with Merck (MRK) Keytruda, and Bristol-Myers Squibb (BMY) Opdivo. Results from this study are expected to be released by November 2021. The risk is that this study is enrolling 308 patients, which is a much larger patient population compared to the current phase 2 study. The good news is that the combination proved to elicit a response in these PD-1 refractory melanoma patients when otherwise there wouldn't be one. This leads me to believe that the results should come out better than expected.

Overall, 26 patients out of 34 evaluable for efficacy (76.5%) experienced disease control (CR, PR, or Stable Disease).

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.