Sesen Bio Looks Better Than Ever - An Update

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About: Sesen Bio, Inc. (SESN)
by: Ting Peterson
Summary

The company meets with the FDA on May 20 to discuss manufacturing aspects.

A pre-BLA meeting is scheduled for June 6; products that get through BLA submission have approval probability of 82%.

The company continues to strategize for commercialization and globalization.

The continuing BCG shortage may be a boon for Sesen.

Additional time for tracking patients improves Phase 3 data.

In February and March, I wrote about Sesen Bio’s (SESN) vast potential. Dr. Thomas Cannell, President & CEO, conducted a conference call on May 13 that presented information pretty much as I anticipated: directionally, timewise & strategically.

Brief Background

In our world of unrealistic expectations and instant gratification, it is easy to understand how many would deride a drug that achieved a scant 15% Complete Response Rate ((CRR)) at 12 months. Bladder cancer is the 4thmost prevalent cancer among men in the U.S.; 80% of patients are diagnosed with non-muscle invasive bladder cancer (NMIBC). There are currently 3 options for NMIBC: Bacillus Calmette-Guerin (BCG), cystectomy and Valstar (valrubicin). The first line of defense is BCG, many do not respond to it, and it will eventually fail most who responded. Physicians will recommend radical cystectomy to remove the entire bladder and surrounding tissues as the next course. Cystectomy is a procedure so complex, risky and profoundly detrimental to the quality of life that reports cited as many as 50% of patients refuse it and instead live with the likely progression of this highly aggressive disease. For those unable to withstand the surgery, Valstar is prescribed only as the last recourse solution. That’s it, there have been no other approved treatments for 20+ years. I wonder if the scoffers have a different perspective now. I further wonder, if they knew that the need for an alternative was so pressing that the federal Food and Drug Administration (FDA) approved Valstar with an 8% to 10% CRR despite the 4 deaths (out of 90 total patients with BCG-refractory disease) from metastatic bladder cancer during the trial that were reported in the drug developer's submission to the FDA. At the wrap-up stage of the Phase 3 VISTA trial for its lead drug candidate Vicinium, micro-cap Sesen is sprinting for the finish line. Vicinium is pursuing second line status to replace cystectomy. Please keep in mind that the CRR here refers to patients with Carcinoma in Situ ((CIS)), considered the most difficult-to-treat population.

Confirmed Catalysts in the Very Near Future

The company has 2 confirmed meetings with the FDA. A Type C CMC meeting is scheduled for May 20 to discuss the best path for the transfer of technology to Fujifilm to ensure that product quality and integrity are maintained. Per the press release, the recently completed full-scale GMP manufacturing run at Fujifilm’s facility yielded “encouraging preliminary results”. The June 6 pre-BLA meeting’s primary objective is to obtain feedback from the agency as to whether the efficacy and safety data, benefit-risk profile and overall information that has been compiled is adequate for BLA submission. Among oncology products reviewed by the FDA between 2006 and 2015, the approval rate for those that get through BLA filing is 82%, significantly higher than the 33% that get through Phase 3.

FDA Approval, Commercialization and Global Expansion

Dr. Cannell is confident of regulatory and commercial success. Vicinium’s Fast Track Designation is highly advantageous in terms of constant and frequent communication with the FDA and the benefit of working closely with the Agency to maximize approval odds.

The relative simplicity & lower cost of Vicinium’s production, ease of patients’ transition from BCG and the unique situation, where all key customer segments (payers benefit from less expense, patients preserve their quality of life & doctors are able to offer a far better alternative to cystectomy) have a vested interest in its success, should help to drive rapid uptake and strong growth of Vicinium after approval and launch. Cannell’s expectations of significant spillover opportunity for expansion beyond on-label use, as well as limited restrictions and minimal challenges to reimbursements by payers should further enhance commercialization prospects.

The company is planning for 6 to 10 global regional partnerships that cover 60 to 80 countries, specifics are expected to be disclosed around early 2020, as the partnering process outside of the U.S. can take a minimum of 6 to 12 months.

BCG and Vicinium Interaction?

Patients who received 7 to 10 instillations of BCG prior to treatment with Vicinium achieved a CRR of 25% at 12 months, compared to the 15% overall CRR which included the results of 73 patients (of a total of 93) who received over 10 instillations of BCG, with the average enrolled patient receiving 15 instillations of BCG prior to starting the VISTA trial. This would seem to indicate that too much BCG actually decreased Vicinium’s efficacy, as Cannell pointed out during the May 13 conference call. In fact, the CRR for those treated with 2 courses of BCG is significantly higher across all timeframes than those treated with 3 or more courses. Vicinium is significantly simpler to produce than BCG, with its long history of production woes. Once again, Merck (MRK), the sole manufacturer of BCG, announced a global shortage, increasing the urgency & pressure for viable solutions for treatment of NMIBC. These factors could potentially be compelling incentives to reduce BCG administration and facilitate Vicinium’s approval and commercialization, as well as increase its subsequent utilization.

Improved Data for Primary and Secondary Endpoints & Commercial Implications

Durability of response is a primary endpoint measure, the March 1 data cut estimated that, of those who achieved a complete response at 3 months, 54% will remain disease free at 9 months or longer, a slight improvement over the 49% of the previous readout. The odds of maintaining complete response into the future increase significantly the longer the patient has been in complete response. To clarify: patients in complete response at 3, 6 & 9 months have the probability of remaining in complete response at 12 months of 54%, 75% & 94%, respectively.

Based on the Kaplan-Meier method, time to cystectomy is projected to be 28 months, up from 18 months as reported on the company’s 12-31-2018 SEC Form 10-K. This is a key secondary endpoint as the FDA states that the goal of therapy in patients with BCG-unresponsive NMIBC is to avoid cystectomy. From a commercial perspective, Cannell feels this will be the most motivating endpoint for payers, as the 3-month cost of radical cystectomy is estimated at around $40,000; and escalates with the high morbidity and readmission rates associated with this surgery. It would seem obvious that delay to cystectomy (without detriment to the patient) is a clear benefit for payers. Sometimes we get so caught up in the therapeutic prospects of a drug that offers so much hope that we neglect to empathize with the patients and their families/caregivers, but they are the ones who will benefit, by far, the most. Patients are determined to preserve their bladders, committed enough to suffer through numerous courses of BCG administration, which has been described as “like having hot lava in your bladder”. Cannell believes this will also “be a very motivating factor”.

Progression-free survival is another important secondary endpoint, over 85% of patients treated with Vicinium will remain progression-free at 2 years based on the Kaplan-Meier estimate.

Another 40 patients (cohort 3) with tumor stages Ta or T1 without CIS also treated with Vicinium were specifically excluded from evaluation of the primary endpoint per FDA guidance. However, the 50% and 36% probability of remaining disease-free for at least 1 year and 2 years, respectively, along with the safety profile represent robust data toward achieving key secondary endpoints.

Partial Response Rate Is Important Too

During Phase 2 of the trial, bladder mapping after 3 months of treatment showed 40% and 43% had complete and partial responses, respectively. Partial response rates are often trivialized or even disregarded during trials. This is warranted in many cases, but NMIBC patients with CIS are so difficult to treat that partial responses are very meaningfully positive. Stopping the progression of the tumor or shrinking it opens the possibilities for alternatives and extends the time for other options. There is no partial response data for Phase 3 as it was not required by the FDA, and the company, presumably, directed its resources toward aligning & complying with the agency’s guidance.

Consistent Safety & Tolerability

The ability to demonstrate favorable and consistent safety and efficacy data across Phase 2 and Phase 3 is significantly advantageous from a regulatory viewpoint; it should enhance the company’s position for the BLA submission. Cannell attributes Vicinium’s safety profile to its specificity in targeting only cancer cells; he believes that the drug’s strong risk-benefit profile will be a critical consideration for FDA approval.

Cash Position

Cash of $42.4M, with no outstanding debt at the quarter ended March 31, 2019, is anticipated to finance operations into 2020.

Risks

As always, there is inherent risk in investing in any company. Small bios, in particular, carry the most risk. Another risk with small companies is the ever-present potential for dilution, as they may lack other resources to finance operations.

Author’s Note

In order to avoid undue redundancy from my previous write-ups on the company, some essential background information has been deliberately omitted from this article, as this is only an update. Much more detailed and in-depth analyses can be obtained in 2 articles I recently wrote: "Why Institutions Own 48% of Tiny, Obscure Sesen Bio" & “Big Moves for Micro Sesen Bio in the Future - An Update”.

Disclosure: I am/we are long SESN. 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.