Biotech portfolio update – Clovis, Array, ImmunoGen

Clovis Oncology

Clovis (CLVS) lost 75% of its market cap last week after disclosing a disappointingly low response rate for rociletinib in T790M+ NSCLC patients. Updated response rates were 28%-34%, dramatically lower than the 54-60% response rate reported at ASCO 2015. According to the company, the dramatic difference stems from analyzing the same data set based on more stringent criteria (confirmed response rate).

When a patient achieves a response (30% reduction in tumor burden), the response has to be confirmed by a subsequent scan (~6 weeks later). If the subsequent scan shows progression then the response is not considered a confirmed response. As companies report results of early stage in parallel to recruiting new patients, it is common to see unconfirmed responses as part of the efficacy evaluation.

From a clinical perspective, unconfirmed responses are far less attractive as they represent a transient benefit that is followed by disease progression after less than two months. When a drug leads to an unconfirmed response rate of 50% but the confirmed response rate is 30%, this means that almost of half of responders could not maintain their response for 2 months. This potentially impacts the overall clinical benefit including PFS and overall survival.

As data mature (typically in the context of P2 or P3) there is enough follow up to distinguish between confirmed and unconfirmed responses, making the latter irrelevant for assessing response rate. This is particularly important when companies file for accelerated approval based on response rates. In other words, at the end of the day an unconfirmed response rate is not considered a meaningful (let alone approvable) endpoint. This is why companies and investigators often distinguish between confirmed and unconfirmed responses. Below are two examples from Array Biopharma (ARRY) and Immunogen (IMGN) (I picked them simply because I am going to discuss them below, red arrows are my addition).

Bini+ribo IMGN853

I was very surprised to learn that Clovis has been consistently using unconfirmed response rates in its data analysis without ever telling investors a significant portion of these responses were transient. While the company presents the delta between confirmed and unconfirmed responses as an unexpected new finding, looking retrospectively at the results calls into question this claim.

Clovis started presenting data for therapeutic doses of rociletinib’s new formulation at ASCO (June) 2014, starting from a cohort of 40 patients with T790M+ NSCLC and a response rate of 58%. At the time, many patients had limited follow up so technically it was impossible to confirm most responses. The spider plot  below clearly demonstrates this.

roci - ASCO 2014Five months later at the EORTC meeting (Nov 2014), Clovis presented an update which included 27 efficacy evaluable patients treated at the doses the company decided to take forward (most responses had already been reported at ASCO 2014). Response rate was 67% and although many patients had significant follow up, there was still no breakdown of confirmed and unconfirmed responses. Based on this and the fact that patient recruitment picked up significantly in H2 2014, it is safe to assume that the company started 2015 with a ~60-patient database with sufficient follow up to get a reliable confirmed response rate.  

At ASCO 2015, Clovis had a 243-patient efficacy database. Response rate was 53% and again, despite the fact many patients had significant follow up to distinguish between  confirmed and unconfirmed responses, Clovis did not disclose anything about this issue.

Before last week’s announcement, Clovis never reported efficacy based on confirmed responses even though it is a common practice and despite the fact it had plenty of opportunities to do so. In addition, AstraZeneca started to report efficacy based on confirmed responses more than one year ago (see link). Clovis presented its data, sometimes back to back with Tagrisso (AZD9291), but still used unconfirmed overall response rate.

Using a confirmed response rate, rociletinib’s response rate of ~30% is inferior to that of Tagrisso, which has a confirmed response rate of 51%-59% in T790M+ NSCLC. Rociletinib appears to have a similar PFS to Tagrisso and the difference may be explained by a different patient population pursued by the two companies but for now Tagrisso looks like the undisputed winner.

As an investor, I find the behavior of Clovis’ management disturbing because I fail to see how the issue of response confirmation could be overlooked. Not only is distinguishing between confirmed and unconfirmed responses a common practice, Clovis knew AstraZeneca used confirmed response rate and did not bother to do so as well, thereby leading investors to assume the drugs are comparable in terms of response rate. To clarify, it is OK when an initial signal is not corroborated by a larger data set. My concern is that Clovis knew that responses are not durable in many of the patients but still covered this up. Clovis did not lie to investors, but it certainly did not provide the full picture.

Array Biopharma

Array’s recently announced partnership with Pierre Fabre for binimetinib and encorafenib was not well received by the market due to the limited size and scope of the deal. The market (myself included) expected a rich global deal with a leading pharma (I actually thought an acquisition makes more sense). Instead, Array did a limited deal (covering Europe and other markets) and retained full rights in US and Japan.

Financially, the deal itself does not look that bad at second glance as Array keeps US and Japan and retains a 20+% royalty rate in Pierre Fabre’s territories while offloading 40% of global development costs. Still, the fact Array could not land a richer and broader deal is disappointing because it implies there was limited interest from large biopharmas, who could easily acquire Array for under $1B.

Admittedly, MEK inhibitors haven’t lived up to expectations and BRAF+ melanoma is the only setting in which a clear benefit has been observed. Results in other indications were either negative (uveal melanoma) or not exciting enough even as combination with BRAF inhibitors (BRAF+ colon cancer). Nevertheless, there are still plenty of settings in which MEK inhibitors are being evaluated, which could translate to a significant commercial opportunity.

Extrapolating from the melanoma experience, MEK inhibitors may be used to enhance activity of BRAF inhibitors. Beyond melanoma, BRAF inhibitors may be applicable in niche indications with BRAF mutations. Two recent publications (see link #1 and link #2) evaluated Zelboraf in BRAF+ tumors (excluding melanoma) and reported responses across various tumor types including a 42% response rate in BRAF+ NSCLC and a 96-100% response rate in a rare leukemia. Based on experience in melanoma and colon cancer, adding a MEK inhibitor may augment efficacy and prolong treatment duration.

Larger indications such as RAS-mutated tumors may be relevant for other combination regimens with MEK inhibitors. These include KRAS+ NSCLC where AstraZeneca is evaluating Array’s selumetinib with chemotherapy. Companies are also exploring this indication, which represents a multi-billion opportunity, with PD-1/PD-L1 antibodies combined with MEK inhibitors.

There are also small indications in which MEK inhibitors may have single agent activity, with neurofibromatosis as a recent example (see press release). Array will soon report P3 results for binimetinib as single agent in NRAS+ melanoma. The study was initiated by Novartis at the time based on a single arm study that demonstrated modest efficacy (~15% response rate, PFS of 3.6 months) and since the P3 trial compares binimetinib with chemotherapy, I view the readout as a high risk event. Combination with a CDK4/6 inhibitor appears more promising but toxicity is an issue.

I plan to hold Array going into data readouts in 2016. Failure in NRAS+ melanoma could present an attractive entry point ahead of the 2016 readouts (especially Astra’s SELECT-1 in KRAS+ NSCLC).


Earlier this month, ImmunoGen got a step closer to breakthrough therapy designation with updated results for IMGN853 (mirvetuximab soravtansine) in ovarian cancer. Results provided only limited additional information in terms of number of patients and follow up but provided a strong indication regarding the company’s ability to select patients more likely to respond to the drug.

In the overall population, response rate was 50% (10/20 patients) vs. 53% (9/17) reported at ASCO but stratifying patients according to FRα (mirvetuximab’s target) expression demonstrated a striking correlation between FRα expression level and responses. Of the 10 patients with high expression, 7 (70%) had a confirmed response including two ongoing complete responses. Two additional patients had an unconfirmed response, bringing the unconfirmed response rate to 90%. In contrast, patients with medium and low expression had limited and no benefit, respectively (see figure below).

mirv - EORTC

Response duration in high expressors was encouraging as of the 7 responders, 5 stayed on treatment for 6 months or longer, including 4 patients who were still ongoing at the time of presentation. One patient received mirvetuximab for a year.

If corroborated by future results, the high response rate in high expressors is a clear positive for Immunogen because it increases likelihood of accelerated approval using a small P2. Obviously, the addressable market is smaller but still represents a $1B global opportunity (conservatively assuming 15,000 eligible patients). At ASCO 2015, the company will report data for 20 additional patients, which will be crucial for corroborating activity in FRα-high tumors. A confirmed response rate of 50% with a durability of 5-6 months in these heavily-pretreated patients will validate ImmunoGen’s clinical strategy and make mirvetuximab one of the most promising agents for ovarian cancer.

Portfolio updates

We are selling Clovis following the recent update and regulatory setback as well as Ocata (OCAT) following its acquisition by Astellas.

portfolio - 22-11-2015 - after changes

biotech etfs - 22-11-2015

89 thoughts on “Biotech portfolio update – Clovis, Array, ImmunoGen

  1. Hi Ohad

    Thanks a lot for your update.

    What do you actually think about BLUE at current levels?

    Many thanks

  2. After the report of futility in phase 3 for ganetespib, how do see the prospects
    for what remains with syntax pharma?

  3. Ohah, you had this in your write up in July of 2015 about TRVN:

    “Trevena’s (TRVN) modest market cap ($264M) despite a positive clinical signal, an ongoing phase 2b and a potential FDA approval within three years.

    And this:

    TRV130 may emerge as a best-in class opioid with a ~$2B potential globally.

    Now that they’ve had a successful phase 2b and their market cap is $614M, what is your new outlook on the stock?


  4. Alex (CLVS) – Yes I think there is value in rucaparib and lucitanib which could support the stock in 2016. My decision to sell CLVS was based on the lack of near term catalysts for these drugs.

    Kevin (BLUE) – I like it and would like to get in prior to ASH.

    Duane (SNTA) – I don’t think there is a lot of in ganetespib, perhaps their Hsp90 conjugates can become interesting when they enter the clinic because they have a reasonable likelihood of enhancing tumor accumulation.

    Dan S.(TRVN) – I still like the stock at the current valuation and think they have a high likelihood of success and a potentially differentiated safety profile.


  5. Hi Ohad,

    Ohad thanks for the commentary on Clovis – quite maddening. Alex read my mind on Luci and Ruci. What is not clear to me is does the unconfirmed responses also extend into any preliminary T790- response rate data? Can anyone confirm?


  6. Ohad, thanks for the write up on Clovis. It is quite discerning that Clovis chose to club confirm and unconfirmed responses together without really putting an asterisk on data. my question should we take that Clovis did the same with their other drug? I mean that would be simply devastating. What should we do w.r.t T790M- data where Roli is showing RR of 25-27%?

    It is unfortunate that this thing happened but then I think meeting organizers should ask for clear data , confirm and unconfirmed separated out so that even doctors/researchers don’t get fooled into believing forget about investors.

  7. CLVS
    I had contact with IR:
    “Regarding the response rates for rucaparib, our clinical team has confirmed that the majority of the responses for rucaparib are confirmed.”
    Majority can mean a lot…but better then minority, i guess?

    Regarding Lucitanib i was hoping for results at SABCS in december. There will be a poster presentation but not sure if there will be actual results or just trial design etc.
    “FINESSE – An open, 3-cohort, phase II trial testing oral administration of lucitanib in patients with FGFR1-amplified or non-amplIfied oestrogeN rEceptor poSitive metaStatic breast cancEr”
    Does anyone know what to expect there?

  8. $EXEL Do you think Opdivo’s approval means Cabo will get approved by April 2016. Exelixis seems to want to do wait out before making a deal based on their Stiffel comments. Do you think they will wait for revenues and other developments ? Does waiting affect them negatively or positively ? My own sense is that it is a good thing to wait as more catalysts might open up such as CS-3150 going into Phase 3, Cabozantinib showing good results in other indications such as TNBC, and perhaps even a positive read out in the Phase 1 combo’s of Cabo plus Nivo for RCC, and bladder cancer. Cobimetinib results will have to be communicated by Roche if they are to move into Phase 2 or Phase 3 direct for KRAS indications. I had noticed in one instance that Genentech delayed reporting to Cobimetinib related trials by 6 months on new indications so they might be doing some already without communicating them. My sense is that Exelixis is waiting for some of this signals to come out before making a deal. What do you think ?

    $KBIO Any comments on this, there are no results in Phase 1 or Phase 2 and yet the stock is going gangbusters. It can easily go down.

  9. $EXEL I think Roche is probably interested in Exelixis and the price is not right yet and will be next year upon further accumulation of results, and we might see Roche buyout of Exelixis sometime next year although I know you think it is not a good fit. Given further indications in MEK inhibitors that are yet to be explored publicly by Roche, I think Exelixis could be good takeover candidate. It might be a good takeover candidate for other companies as well such as BMY if the Opdivo plus Cabo trials prove positive.

    $KBIO What do you think is the next possible $KBIO ?

  10. $OXGN – What do you think of this company ? Do u see any possibility of partnerships ?

    $MEIP – What do you think of this company and their prospects ? The drug they have is approvable but toxic.

  11. The major problem with CLVS is its management team credibility. Presently, they lost it. Furthermore, the CEO behaves like nothing big happened. It is mind-boggling. Either he knows something or he is “smoking” something.

    The next (near term) very important events for the CLVS future are related to the FDA decisions about the PDUFA date. Specifically, whether it will be kept as it is or moved and by how much.

    Finally, although, ORR is a very important indicator of drug efficacy. At the same time, monotherapy is not the most used cancer treatment regiment. Some drugs are failures as a monotherapy but are very successful as a combo with other oncology drugs. Avastin is a good example. Consequently, the Roci vs. Tagrisso NSCLC game is just started.

  12. Hi folks,

    Regarding Array`s deal with Pierre, I would like to add that royalties start at 20% but quickly go up to 35% (if Pierre`s revenues from the product reach 100 million $). Also, milestones (partially tied to regulatory approvals from very advanced phase 3 studies/submissions) can potentially reach 460 million $. A very high amount.
    Is it possible that Array chose Pierre because it offered better terms than big pharma? (and because Pierre is trong in Europe).

  13. mike (CLVS) – From what I understand the confirmed response rate in T790M- is only slightly lower (~27%) than what is observed with T790M+ (~32%). This also calls raises the interesting question of whether the clinical activity of this drug is predominantly T790M related.

    Tim (NERV) – Sorry don’t know them well.

    dave (ANTH) – It’s been a while since I last looked at them. Blisibimod doesn’t look an impressive agent, I see they have a new program for pancreatic enzyme replacement, but I am not sure how they plan to differentiate their product from available ones.

    Amol (CLVS) – From what I heard the confirmed response rate in T790M- is similar to what the company reported in the past. Not sure about rucaparib although there they have PFS and the more important aspect is the BRCA-like subset, for which there is no data with other PARP inhibitors.

    Ike (CLVS) – Thanks for the update on rucaparib, good to know. I don’t think there will be actual data for luci at SABCS.


  14. Ohad, Hi, about Arqule, what do you think happened to the P2 trial of Tivantinib/Cetuximab (Colorectal Cancer)? Not mention in the CC. Results were expected by year end.

  15. Ike,

    I saw that the luci data in breast and squamous lung would be present at ASCO 16 from some brokerage. Saw on twitter but unsure the exact name. Sorry for ambuguity.

  16. Hi Ohad,
    Wondering if you have revisited CLDX since the news from last Friday (Nov. 20) re P-II ongoing data for Rintega (rindopepimut) in glioblastoma? I believe you have previously had positions but had sold pending P-III data(?). The price has rebounded this week following the news after getting hammered on FDA news about no early termination back in July.
    Thanks as always,

  17. curiousgeorge (EXEL) – I expect a quick review time for cabo as well as this is a straightforward data package with a clear PFS benefit and a drug which is already approved. One potential drawback vs.Opdivo is the lack of an OS benefit, which will probably take ~6 months to read out. My impression was that EXEL was eager to find an ex-US partner because they need someone who can sell cabo globally. Waiting for a partner could have an impact on sales ramp up in Europe for sure. Personally I am concerned about cabo+nivo combination given experience with other kinase inhibitors.

    Re KBIO – Don’t think recent action has anything to do with their programs.
    Don’t have a strong opinion on OXGN and MEIP.

    bob (CLVS) – I agree in general but my concern is around whether roci is as good as Tagrisso. If not, I don’t see a lot of value even as part of combination regimens.

    Peter (ARRY) – Hard for me to speculate but when large biopharma companies want something, they are willing to generously reward companies. My guess is that ARRY could not garner enough interest (in contrast to what I had expected).

    Luis (ARQL) – Don’t know but I don’t think this is meaningful as the true value drivers are 092 and 087 imo.


  18. $OXGN – What do you think of this company ? Do u see any possibility of partnerships ?

    $MEIP – What do you think of this company ?

  19. It looks like you are online right and answering the questions, and you already answered my questions, thanks.

  20. Hi Ohad
    Would like to hear your thoughts on SRPT after listening
    to the BMRN panel.
    Thanx for all your generous sharing.


  21. So far the panel is brutal for BMRN, FDA reviewers extremely critical of virtually every single BMRN argument and subset analysis. Not sure what is teh readthrough for SRPT, goes both ways, especially after the critical discussion on dystrophin (although SRPT may have a better set there).


  22. Thanks Ike and Ohad for the reply. I guess for now we will be in trading range. Who knows there might be a surprise in store.

    On the other hand Ohad what do you think of Blue given the drop in valuation? You had mentioned if its hits 70 you will be a buyer. In your opinion is it still a buy going into ASH?

  23. $EXEL NCCN update posted today: nivolumab and cabozantinib listed as category 1 options for met ccRCC after TKI
    How long do you they can afford to wait before signing an ex US deal or get bought out ? I also saw that on practice update roundtable 20 mg dose works with no side effects so i think if 20 mg to 40 mg of Cabo can make Opdivo better it might have a shot at Opdivo plus Cabo first line RCC.

  24. Oham,

    I still have a big problem with CLVS management credibility (and or stupidity) but let me remind you that:

    1. On Sep 8, 2015 at the 16th World Conference on Lung Cancer (WCLC), the results of AURA study Phase II extension n AURA study Phase II extension (n=201) results of AZD9291 in previously treated patients with EGFR T790M positive mutation positive advanced NSCLC were presented [Abstract 943. Oral Presentation].
    ORR was 71%; median DoR was 7.8 months and median PFS was 8.6 months. Yes, the latest PFS was 8.6 months and DoR = 7.8 months.

    2. On Nov. 13 2015, TAGRISSO™ (osimertinib) (AZD9291) was approved by the US FDA as treatment for patients with EGFR T790M mutation-positive metastatic non-small cell lung cancer with ORR of 59% and duration of response [ the time between the initial response to therapy and subsequent disease progression or relapse] of 12.4 months

    – I cannot understand why TAGRISSO’s FDA label on Nov.13, 2015 gives DoR = 12.4 months and the AZN results presented 2 month earlier at WCLC gives DoR = 7.8 months
    – CLVS still claims that their PFS = 9 months

    I am confused! Any help?

  25. Confirmed vs. unconfirmed responses.

    Roci and TAGRISSO have basically the same unconfirmed responses. However, TAGRISSO responses were more durable since more TAGRISSO’s responses lasted longer than 6 weeks between consecutive measurements. Why is the question. What role did trials Asian population differences contribute to the observed response duration differences?

    It is known that TAGRISSO’s DoR=7.8months. What was Roci’s DoR?

  26. Ohad, have you looked at SMMT in the DMD space? Full disclosure I am long. Market cap is only around $140M. They are working on targeting utrophin for DMD and, if successful, it could potentially treat all DMD patients, not just the very small subset that the leading BMRN/SRPT drugs target. BMRN was actually partnered w/SMMT 5 years ago before they walked because they didn’t think PK issues of their lead drug at the time could be solved. SMMT claims they have now solved the PK issues but they of course still have to prove that in the clinic and there are no guarantees.

    It’s interesting to me that SNY is actually working in the utrophin space for DMD as well. That at least gives some independent validation of the target. Also, BMRN and SRPT recently publicly said that they would look to acquire potential universal DMD drugs. No guarantees that means SMMT but also don’t think there are a lot of other potential universal DMD drugs out there (FGEN has potential one in FG-3019, CATB, and maybe there are private players I don’t know about). SMMT is certainly highly speculative but I’m willing to gamble a little at this valuation.

  27. Amol (BLUE) – I still like BLUE going into ASH, not sure about buying it today at 90.

    curiousgeorge (EXEL) – Thanks. Can you provide a link for the NCCN guidelines? Sounds like Exelixis can submit cabo in Europe without a partner but they need someone shortly after.

    bob (CLVS) – The difference may stem from using additional patients and different patient subsets that are included in the label and not in the WCLC data set or vice versa. From what I recall, CLVS’ 9 months is related to DoR, not PFS.
    Don’t know what was the contribution of geographic differences.

    mcbio316 (SMMT) – I am following it for the reasons you mentioned (utrophin as a universal treatment for DMD, oral small molecule, low valuation etc.). They seem to resolved some of the exposure problems but their approach is still risky. Plan to wait for next year to start a position.


  28. $EXEL Do you think that the NCCN approval will have any meaningful impact on the revenue ?

    $CLVS What do you of the bull case made by Kyle Bass ?

  29. Hi Ohad,

    Do you follow Halozyme? (HALO) what’s your opinion about their current valuation?

    Thanks as always.

  30. Hello ohad,
    I know you are bullish on trvn, but what about cara? They will have phase 2 oral cr845 data coming up by this year. You thought?

  31. curiousgeorge (EXEL) – Thanks, I couldn’t find any official release on that matter but assuming this is true it’s excellent news for EXEL because the drug is several months from approval and survival benefit needs to be confirmed.

    Re: CLVS – I think Kyle Bass is making valid claims and his presentation was coherent and elegant. I agree there is still value in rucaparib and lucitinib, not sure if patient population can explain the dramatic difference in response rate for roci vs Tagrisso.

    Chris (HALO) – Don’t have a strong opinion on them.

    Cloudy (CARA) – Their kappa agonist programs clearly demonstrate activity, I honestly don’t know them well enough to have a concrete opinion. I feel that there may be better alternatives in some indications (TRV130 in post operative pain, Trevi for uremic puritis). Their osteoarthritis trial with the oral formulation is intriguing (no placebo arm, strangely).


  32. Ohad,
    RE: CLVS

    Assuming that CLVS’s Roci data were/are legit, one may assume that good many patients initial responses were just above the 30%-threshold RR requirements. At the second 6-week followup check, good many of these patients fell just below the 30%-threshold RR confirmation requirement.

    The next assumption regarding to durability of initial response might come from
    – Differences in patients populations (Asians vs. non-Asians) of Roci 16% vs. Tagrisso 58% might also contributed to falling below the 30%-threshold RR for these borderline-response patients.

    Tomorrow, we expect to hear about the FDA interpretation and the future of Roci regulatory development roadmap. Due to a lack of info, I can only speculate that, at best, FDA will not approve Roci before March 30, 2016. Undoubtedly, FDA would like to have another 90-days meeting with CLVS and review a larger database preventing anymore “surprises”.

    Finally, in any case, it was a colossal CLVS management blunder by hiring an army of salespeople without having any product to sale. Their trial designs did not take into consideration their competition. They were too cocky and arrogant. It became obviously clear that CLVS has no appropriate expertise and capabilities to develop and market their pipeline by itself successfully and must develop appropriate partnerships ASAP.

  33. Hi Ohad,

    AUPH dropped to a low level. would you still recommend? p2b data should be published soon, right? what are your thoughts (I haven’t heard much about AUPH from you the last few weeks…).

    Thank you,

  34. I actually bought back The shares I sold last summer for BLUE. Payed $87,4 and hoping flies over $100

  35. Ohad

    Any names in specific your looking at into ASH data next had mentioned BLUE.any others you can talk about?

  36. bob (CLVS) – I agree that patient population may have contributed to the stark difference in response rate but the burden of proof is on CLVS now. In any case, Tagrisso has a lead and a better looking data set for now. That might change in the future but probably not in the next year or so.

    stefan (AUPH) – The real catalyst will be P2b data next year. Results this year are going to be from a small uncontrolled trial which will be hard to interpret imo.

    Dave (ASH 2015) – BLUE and XLRN are definitely names I am following. Just saw that Sanofi will present monotherapy data with the anti-CD38 from IMGN. AGIO will also have an update FOR AG-221 in AML/MDS.


  37. Ohad
    BLUE got hit today on report mentioning possible changes in production method for LentiGlobin.if that’s the case seems like it would slow development.Do you think the selloff today offers a attractive entry point or would you wait for further clarification.

  38. $EXEL How far out do you think is a buyout or a deal in terms of months ? What are the chances they monetize CS-3150 with Daiichi Sankyo

  39. dave (BLUE) – It’s a tough call. Long term I have strong conviction in their technology and its potential to revolutionize how many diseases are treated. There are always bumps on the road with these type of breakthroughs so short term performance is trickier to predict.

    Dan – Sorry don’t know them.

    curiousgeorge (EXEL) – They must have a partner several months prior to EMA approval (probably by summer of 2016) so this points to Q2:16. Don’t know about CS-3150, it’s currently in a large P2 in T2D but I wouldn’t ascribe too much value to it.


  40. BLUE – Any thoughts on the gene therapy/editing field in general? I like BLUE, as well, but the entire space is exploding with new companies and technologies (e.g. CRISPR). How do you go about thinking about which players will last, and which ones will see their platforms lapped or obsoleted? Do you prefer to just wait for clinical data, and discount competitive threats that haven’t proven themselves in the clinic, or do you think it’s a significant worry in such a fast-evolving space, making it difficult to invest in right now?

    With regard to gene therapy, there’s also the question about barriers to entry and differentiation of products. For instance, say a gene editing company cures some genetic disease by editing out the defect – will their product be differentiated in any meaningful way from another company who also uses CRISPR/TALEN to do the same thing? Do you see this as any more of a problem for gene therapy companies than traditional biotechs?


  41. $EXEL Do you think there is lack of urgency on Exelixis management to do a JV ? What is the probability they are actually serious about doing a partnership or prospecting for a buyout ? What do you think are Cabo’s possibilities in lung cancer and other cancer types given the changing paradigm to PD1’s ? How do you think Cabo will be used in liver cancer together with PD1s around the corner ? How would you size up the market opportunity of Cabo apart from RCC as this is what a global franchisee or purchasor will be looking at ? I don’t think there will be consensus on changing the drug pricing despite the fears of changes after elections. What is the probability our system of government can affect drug prices post elections ?

  42. $EXEL What do you think can explain Exelixis not pursuing DTC first and doing MTC first ? Do you think the board of directors might be more interested in selling the company and just getting more results out by Q2 to get a fair value of the company. How long can Roche not reveal Cobi with PD1 results and not impact it’s development program for the sake of buying Exelixis at a lower price point ?

  43. $EXEL
    The following text By Brian I. Rini, MD, FACP : from (,-2015/changing-landscape-in-the-treatment-of-metastatic-renal-cell-carcinoma-findings-with-nivolumab-and-cabozantinib.aspx) gives logical sense to combining Cabozantinib and Nivo to allow for disease control and immuno response benefits. I think Cabozantinib will be more significant than Nivo in second line RCC and perhaps even first line RCC.

    Of note, in CheckMate 025, there was no progression-free survival difference between the arms, and a substantial percentage of patients in the nivolumab arm (35%) had a best response of progressive disease. Although this subset likely includes patients with disease worsening before subsequent improvement, there are likely patients (eg, those with bulky, symptomatic disease) in whom subsequent VEGF-targeted therapy may be a better choice for initial disease control.

    Several other questions also emerge. The complete response rate was identical (1%) in both arms of CheckMate 025, as was the duration of response (12 months), and thus, the potential of immunotherapy to induce durable and deep remissions is not yet realized—at least at this point in patient follow-up. Further, whether continuous therapy (as was employed in this study) is needed in patients with durable disease control will require additional investigation but has important cost and toxicity implications.

  44. sherk (BLUE) – There are always a lot of dynamics in a nascent field. There will surely be multiple “next-gen” solutions but for me the most important aspect is a broad foundation and clinical validation, which is why I feel good with BLUE long term. CRISPR has a long way to go as a technology (CLLS provided a glimpse of hope for gene editing in general though). Also, I don’t envision a single solution for all genetic diseases but a tailored approach for each indication based on therapeutic settings (cell type, organ, in vivo vs ex vivo, therapeutic area, tissue accessibility etc.).

    curiousgeorge (EXEL) – I think they need a deal urgently in order to market the drug outside of the US. At the moment I don’t attribute a lot of value to other indications although the liver cancer trial may surprise us. Not sure about drug pricing but cabo’s effect is truly impressive (compared to other approved RCC agents) and the overall cost is not that significant.
    Can’t speculate regarding the second part.

    Re: positioning vs. Opdivo, I am sure some cabo will be used in some 2nd line patients but I still expect the vast majority of patients to start with Opdivo given the survival benefit. Totally agree about lack of prolonged remissions typical of immunotherapy. PD-1 are important in RCC but they are not a slam dunk.


  45. Maybe I made the wrong choice. I bought xene which is at 125m rather than trvn at 500 odd million. Is trvn that much worth than xene? Thanks Ohad.

  46. Thanks for your thoughts, Ohad. Speaking of platforms, I was wondering if you had an opinion on ALNY. The RNAi platform has gone through its growing pains, but the company believes it has essentially solved the delivery problem for the liver, which was believed to be the big hurdle holding back the technology. Valuation is quite rich, but the company’s pipeline of liver-directed targets is quite broad and growing rapidly.

  47. $EXEL I think the base enterprise value probably can be approximated given that VEGF inhibitors have been in use for a while. Cabo would be a best in class inhibitor with OS benefits so theoretically it should work in all indications where other VEGF inhibitors are working. The question then would be which indications are worth pursuing, and how long will it take to get to market, a big Pharma can for sure take advantage of Cabo. Avastatin has not produced OS benefits so it would even be better than Roche’s VEGF, they probably want to use Cabo and pay as little as they can while EXEL board probably wants to wait as much as they can so they can pile up indications for both Cobi and Cabo, and decide whether to sell or partner. They probably want to sell if they can get the right value. The shorts need to understand they can make more money if they stop shorting by letting EXEL fly, and get bought. The shorts are being penny wise foolish looking for interest accumulation. I hope they read your blog and get a sense of their irrationality. Live and let live should be their motto otherwise I do hope EXEL does a big surprise on them and the shorts get called.

  48. Mike (TRVN) – Not much has changed in how I view them. They are looking at a relatively quick and cheap registration program with a relatively high likelihood of success. Post operative pain management truly needs somehting like Oliceridine (TRV130). As you know I like both TRVN and XENE but TRVN has deep clinical validation and owns global rights to its lead program.

    Sorry, don’t know FOMX or GNVC well.

    Alex (STML) – First I want to see BPDCN data at ASH.

    sherk (ALNY) – I agree, they appear to have solved liver-directed siRNA delivery. The TTR programs look very good, not sure about hemophelia as their approach may be inferior to gene therapy approaches (BIIB, QURE etc.). For me, it’s a great company but valuation is too high.

    curiousgeorge (EXEL) – Broad spectrum VEGFR inhibitors are effective primarily in renal and liver cancer. In other indications the clinical profile is not favorable so I don’t see cabo being broadly used in the general population (without a biomarker).

    Mike (XENE) – Interesting find, thanks! Perhaps, this is clearly another demonstration of biology’s inherent complexity. Perhaps they can combine NaV1.7 inhibitors with TRVN’s selective opioid agonists…

    Kenny (BMRN) – I can’t envision an approval following the brutal panel last month. Good too see the FDA still stands by basic principles of evidence-based medicine and protect the public from ineffective potentially dangerous drugs.

    Steve (BLCM) – So far so good although efficacy profile is hard to interpret vs. a historical control.


  49. Any thoughts on what BLUE presented at ASH? Their SCD will likely disappoint investors but the short follow up time could have something to do with it looks like?

  50. rick (CARA/TRVN) – I think both have drugs that work with some indication overlap but the different MOAs make them distinguished. In post-op pain, I would go with TRVN but CARA has interesting Uremic Pruritus data.

    Al (BLUE) – Yep, the 2 additional SCD patients did not respond as expected. Not sure it’s a matter of follow up, perhaps they need to do more optimization. Will wait for their ASH event.


  51. Hey Ohad
    Any opinions on FATE and AFMD, both presenting at ASH. FATE is an interesting play, with very low valuation compared to cart companies.
    What do you make out of BLUE results. Seems nobody knows exactly if they are positive. Thanks!

  52. Hi Ohad

    Seems MOR202 results look a little better now – what do u think?

    They also claim (preclinical findings) MOR202 not killing NK cells which should benefit ADCC. Your thoughts?


  53. Dan –

    AFMD – They may have a differentiated bsAb technology but I don’t find their CD30 program exciting and the CD19 space is so crowded. I like the CD33 program but it’s still preclinical.
    BLUE – I am still a long term believer in their technology although it certainly cannot be viewed as a broad absolute solution for all beta thal and SCD patients. They have a strong poc in non-beta0 patients so the way I see it they can expand to other populations with treatment optimization (conditioning, transduction efficiency, amount of cells they accumulate etc.).
    FATE – Don’t know them well.

    Christian (MOR) – I don’t think MOR202 can be saved, it is inferior to dara and the company should not waste resources there. I don’t buy mechanistic differentiation if it is not supported by a superior clinical effect.


  54. Do you believe there are any midcaps that offer a combination os safety, value, and growth? Mdvn, nbix, etc?

  55. $EXEL The stock price action needs to improve, how do you think it will be this month, and then next quarter ?

  56. Sam – It is still hard to find good quality biotechs with reasonable valuations (there are a lot of great companies but upside is priced to perfection). The ones I like are EXEL and ESPR, both have solid efficacy, significant market potential and fairly modest valuations. MDVN is experiencing growth pain and still quite expensive, don’t know NBIX well.

    curiousgeorge (EXEL) -It’s impossible to predict near term stock movement.

    Mick – The reaction to BLUE and AGIO is justified, they are still great companies but valuations didn’t make sense. STML’s data look pretty good based on the PR (still didn’t see actual data), now they need to work on accelerating recruitment.

    Tom (STML) – Yes I am impressed too with the caveat of not seeing the actual data.


  57. Hey Ohad
    have you seen the p2 results of ONTX, combination in MDS, looks good. Market cap is still at 33M, what do you think the significance of those results might be, as well as make potential?

  58. $EXEL Cabozantinib is approved by NCCN, that is a fact. Do you think is Exelixis waiting for CaboSun results before doing the deal to get the proper valuation ? Also, would the NCI fund cabo opdivo combination trials if it were not enthusiastic about it’s prospects ? Can Exelixis get Cabo approval ahead of schedule like Opdivo, and put Not Estimatable in overall survival on the label and just get it updated later on ? How much does waiting for the OS results matter to be placed on the label versus just saying Not Estimateable and trying to get it approved asap like Opdivo ?

  59. hello Ohad

    what do you think of the updated ONTY results?

    quite the crash…

    best regards

  60. $EXEL They have said they want to have manufacturing up by April 1,2016 and ready. If they can get the approval before that date, and start selling it to show revenue before doing a JV would that be a good plan ?

  61. SNTA What do you think of its potential to make a comeback given that hsp90 inhibitors might be combinable with PD1 inhibitors. Judging from your experience in this do you think Exelixis can find a partner to pursue XL888 since they have done Phase 1 testing with it already together with Moffit Foundation PIs

  62. Dan (ONTX) – Small single arm studies are hard to interpret, let alone in MDS. I am not optimistic about this drug at all given past failures.

    curiousgeorge (EXEL) – I don’t think they are waiting for CABOSUN data, which should not impact utilization in 2nd/3rd line RCC. It’s common to file based on PFS and add OS data after approval. Having an OS benefit in the label is extremely important although the drug still has significant potential without it (Afinitor, Nexavar and Inlyta don’t have a stat sig. difference).

    They can start selling in the US but they don’t have an international sales force which is why they must get a partner soon.

    Christian (ONTY) – Still didn’t have a chance to listen to the webcast or look at the data but data in the press release were incoherent and activity certainly doesn’t look dramatically better than what would be expected with Kadcyla or Xeloda monotherapy. The CNS analysis is intriguing but I there isn’t an absolute “palpable” effect there imo.

    Richard Baker (STML) – I was initially impressed with the press release as activity is clearly there but durability is still an open question. In order to be considered a viable treatment in BPDCN, SL-401 must keep patients in responses for at least 5 months or result in a high proportion of bridges to transplant. Within 6 months we should have this type of data from the expansion 12ug cohort.

    curiousgeorge (SNTA) – I like the notion of using Hsp90 inhibitors as carriers because they were shown to accumulate in tumors in humans. Not a big fan of approved chemos (like SN-38) as a payload. I liked the Velcade conjugate much better. Don’t think XL888 has a lot of value to EXEL. Data in melanoma were not phenomenal imo.

    curiousgeorge – I am no expert there, as if biotech wasn’t hard enough…


  63. Hi Ohad

    “December 14, 2015 AdCom for Vytorin/Zetia label expansion will provide additional insight into the FDA’s new take on the LDL hypothesis, which could guide its approach to future labeling of other types of LDL-lowering agents such as PCSK9s and 1002.”

    When time permits can you share your thoughts after the Ad Com ?

    Thanks for all you share

    Gene Mc

  64. Ohad

    Here is anDavid Miller ‏@AlpineBV_Miller 3h3 hours ago
    Nothing in the briefing doc or questions sounds to me like the FDA is pushing to eliminate the LDL Hypothesis. $MRK $ESPR Panel on Monday.
    Abby NachtomiAniu StudentKristinaKaushikandreasBen MatoneRSmithSchulzAudi
    8:21 AM – 10 Dec 2015 · Details
    Reply Retweet
    Joseph W. Ramelli ‏@JosephRamelli 3h3 hours ago
    @AlpineBV_Miller Didn’t forcing companies to run CVOTs already eliminate the LDL Hypothesis? Indirect, but still…
    0 retweets 1 like
    Reply Retweet
    Like 1
    Schulz ‏@portefeuillefun 2h2 hours ago
    .@JosephRamelli @AlpineBV_Miller Since when does the decision to try to validate a hypothesis invalidate it? $ESPR
    0 retweets 0 likes
    Reply Retweet
    Joseph W. Ramelli ‏@JosephRamelli 2h2 hours ago
    @portefeuillefun @AlpineBV_Miller They are forcing CVOTs because they no longer believe in the hypothesis imho.
    0 retweets 0 likes
    Reply Retweet
    Joseph W. Ramelli ‏@JosephRamelli 2h2 hours ago
    @portefeuillefun @AlpineBV_Miller FDA transitioning to CVOT as the primary endpoint for approval. Current CVOT after approval interim step.
    0 retweets 0 likes
    Reply Retweet
    Joseph W. Ramelli ‏@JosephRamelli 2h2 hours ago
    @portefeuillefun @AlpineBV_Miller That is my humble opinion.
    0 retweets 0 likes
    Reply interesting exchange re ESPR

  65. 5 retweets 7 likes
    Reply Retweet 5
    Like 7
    Joseph W. Ramelli ‏@JosephRamelli 3h3 hours ago
    @AlpineBV_Miller Didn’t forcing companies to run CVOTs already eliminate the LDL Hypothesis? Indirect, but still…
    0 retweets 1 like
    Reply Retweet
    Like 1
    David Miller ‏@AlpineBV_Miller 2h2 hours ago
    @JosephRamelli The only companies forced to run CVOTs are developing novel pathways (PCSK9s) or pathways proven to not adhere (CETPi)
    0 retweets 2 likes
    Reply Retweet
    Like 2
    Joseph W. Ramelli ‏@JosephRamelli 2h2 hours ago
    @AlpineBV_Miller So far. $ESPR will have to run CVOT.
    0 retweets 0 likes
    Reply Retweet
    David Miller ‏@AlpineBV_Miller 2h2 hours ago
    @JosephRamelli Of course, but not required for approval. $ESPR
    0 retweets 0 likes
    Reply Retweet
    Joseph W. Ramelli ‏@JosephRamelli 2h2 hours ago
    @AlpineBV_Miller if $ESPR hits CVOT, will not have new competition. Bios are bailing on lipid programs. Way too expensive and risky now.
    0 retweets 1 like
    Reply Retweet
    Like 1
    Joseph W. Ramelli ‏@JosephRamelli 2h2 hours ago
    @AlpineBV_Miller so super bullish if they can get there….
    0 retweets 0 likes


  66. Ohad

    When you look at valuations of large cap bios such as Celgene-biogen-regeneron-Amgen-giliad,do you feel there current mkt caps are justified,or do you see further downside after tremendous gains have been made over the last 5 years.Can you share your thoughts as you project the performance of these large cap bio stocks.Also,do you have a favorite 50+ billion biotech stock.

  67. Ohad, I still can’t decide whether I should start buying BLUE. Would you not be concerned that haplo transplant (TCR alpha/beta and B-cell depleted) may become bigger and eat up future BLUE’s opportunities? I heard some hematologists talk enthusiastically about the haplo prospect. Thanks.

  68. genemc (ESPR) – I expect Vytorin’s AdCom to validate the LDL hypothesis but the more important event will be CVOT data for the PCSK9 antibodies that have a much more dramatic LDL effect.

    Dave – I tend to focus on smid caps but large cap valuations also look rich to me. Here the risk is more from pricing and biosimilars because these companies have profitable franchises that are expected to sustain revenues in the coming years.

    Hiroshi (BLUE) – I am also struggling with BLUE but I am not very concerned about competition from haplo transplant as BLUE’s approach to do an autologous transplant is superior on many levels (conditioning, engraftment, GvHD etc.)


  69. Arry’s trial NRAS came out positive with HR of 0.62. However with a PFS of 2.8 vs 1.5 weeks do you think its meaningful enough for approval? Will FDA wait for overall survival data before granting the approval? Thanks! I feel like ARRY is way undervalued here with a positive trial and ~200M in cash that can weather through all the important readouts next year.

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