ArQule (ARQL) has doubled in less than two months, following two years of weakness. While tivantinib’s phase III liver cancer is the company’s most visible asset, investors are starting to notice ArQule’s early stage pipeline and its potential to generate meaningful data in the coming year. Both ARQ 092 (Akt inhibitor) and ARQ 087 (FGFR inhibitor) are being tested in biomarker-enriched trials with the potential to have clear efficacy signals during 2015.
ARQ 092 – Fast follower in oncology but leading in rare diseases
ARQ 092 is in phase Ib in patients whose tumors harbor relevant mutations (Akt, PI3K). The drug appears to be a high quality, potentially differentiated Akt inhibitor but the primary risk here is related to Akt as a target for cancer.
To date, Akt inhibitors generated preliminary efficacy signs in biomarker-defined patients but were not effective enough to justify single agent development. As a result, development of Akt programs shifted to combination studies in an attempt to identify the right combination regimens and patient populations. Roche’s GDC-0068 (licensed from Array Biopharma [ARRY]) is being evaluated in three large trials in breast, gastric and prostate cancer. AstraZeneca’s (AZN) AZD5363 is in several randomized trials that are funded predominantly by research institutes.
Since ArQule is evaluating ARQ 092 as monotherapy, expectations from the current trial should be modest. When I spoke with the company’s management earlier this week, they acknowledged the limited activity observed to date with other Akt inhibitors but still felt the drug deserves a chance to demonstrate an effect in relevant patient populations. In that sense, being a fast follower plays to ArQule’s favor as it can use information generated by competitors to optimally design the expansion cohorts. ARQ 092 may also have advantages over other Akt inhibitors such as prolonged target coverage due to long half-life, better safety profile and different isoform selectivity.
ARQ 092 in Proteus Syndrome (PS) – The more interesting angle in the ARQ092 story is Proteus Syndrome, an ultra-rare indication (~100 patients in the US) where ArQule has a clear lead. Enrollment in the PS study (will be run by the NIH) is expected to start in the coming months.
Proteus Syndrome is caused by a mutation in Akt1, making it an ideal indication for Akt inhibitors (I discussed Proteus Syndrome and related disorders in my previous write up on ArQule). In contrast to cancer, Proteus Syndrome is a monogenic disease (all cases are driven by Akt), making the likelihood of success higher.
At a recent medical meeting, ARQ092 demonstrated shutdown of aberrant Akt signaling in cells and biopsies from PS patients. This, coupled with the good exposure and safety profile observed in cancer patients, bodes well for the drug’s prospects to modulate Akt signaling in these patients.
Source : Biesecker, ASHG 2014
As ARQ092 is the first disease-modifying agent to be evaluated in PS, it is hard to predict if and how the drug will exert a therapeutic effect. As an initial readout, investigators will take pre- and post-treatment biopsies and assess Akt pathway inhibition. Assuming this endpoint is met, the next step will be looking for an effect on lesion growth rate and other quality of life parameters.
PS represents a small but meaningful commercial opportunity – PS represents a modest commercial opportunity (~60$M) that could increase several fold by expansion to other similar rare diseases. Despite the limited market potential, I view the PS program as an important value driver given the potentially fast route to market and ArQule’s low market cap ($142M). As a shareholder I would like ArQule to pursue this path even if it proves commercially unfeasible merely for the sake of helping a small group of patients who are living with a debilitating disease with very limited treatment options (ARQ092 is in development in oncology so incremental costs are modest).
ARQ087 – first potential route to market identified
ARQ087 is in phase I with a focus on FGFR-driven tumors. It recently became an important asset following ArQule’s disclosure of two intrahepatic cholangiocarcinoma (ICC) patients who are deriving clear benefit (a minor and a partial response) from ARQ 087. In both cases, patients’ tumors harbor FGFR2 fusions.
ArQule is accelerating the ICC program with the aim of recruiting more FGFR2+ patients during 2015. ICC is a rare (~3500 cases in the US annually) tumor type with a poor prognosis and no approved drugs. Therefore, if the signal is corroborated in additional patients, the company will be in a position to pursue a pivotal phase II with response rate as an approvable endpoint. At the recent TAT 2015 meeting, investigators presented a case of FGFR2+ ICC patient who had a dramatic response to another FGFR inhibitor. This further validates the signal observed with ARQ 087 and implies activity is indeed FGFR-mediated.
Source : Massard, TAT 2015
FGFR is a highly competitive space – FGFR is one of the hottest target in early stage oncology drug development, based on a growing body of scientific literature implicating mutations in the four family members (FGFR 1-4) in various tumor types as well as preliminary signs of efficacy with FGFR inhibitors.
There are over ten active programs in development which can be divided to dual VEGFR/FGFR and FGFR-selective compounds. Each subgroup can be further divided based on selectivity profile against additional targets beyond FGFR and VEGFR.
Dual FGFR/VEGFR inhibitors are more advanced but they suffer from safety issues characteristic of broad-spectrum kinase inhibtors. Clovis’ (CLVS) lucitanib is the only FGFR/VEGFR inhibitor that has generated promising results to date (discussed here). FGFR-selective inhibitors proved more efficacious against tumors with FGFR fusions where FGFR is a primary growth driver.
The leading FGFR-selective programs are J&J’s (JNJ) JNJ-42756493, Novartis’ (NVS) BGJ398 and AstraZeneca’s AZD4547, all of which are in phase II. Additional programs are in phase I (Chugai, ArQule) or pre-clinical testing (Incyte [INCY], Loxo [LOXO], Blueprint).
Differentiation is an open question but ARQ 087 has a real fighting chance – With so many drugs in development it is still early to pick winners as every drug has different pharmacologic and clinical profiles. Objective responses were observed with multiple inhibitors across various tumor types and so far no program has been terminated due to safety issues.
From a selectivity standpoint, ARQ 087 started the race as an inferior drug but there are preliminary indications that ARQ 087 has a real fighting chance. First and foremost, the drug has clear activity in FGFR-mutated tumors with durable responses in two out of two ICC patients with FGFR2 fusions. ARQ 087’s manageable safety profile at clinically relevant doses enables continuous as opposed to other drugs that require intermittent dosing. In addition, initial exposure data show exposure is numerically higher (sometimes dramatically) compared to other FGFR inhibitors.
ICC represents ARQ 087’s fastest route to market – The clear efficacy signal merits pushing ICC aggressively despite the selectivity overhang. In an effort to accelerate its ICC program, ArQule plans to expand the ARQ 087 to additional clinical sites. Novartis is also pursuing FGFR2+ ICC as part of a phase II that started recruiting in the summer of 2014. Although ArQule is one year behind Novartis, it is already in touch with many of the leading centers that treat ICC as part of tivantinib’s liver cancer study, which may enable it to shorten timelines. If the preliminary signs of efficacy are corroborated in 10-15 patients, ArQule may start a pivotal phase II in 2016.
Milestones for 2015
Portfolio holdings – April 5, 2015