BMS zeroes in on its next blockbuster

Last week BMS (BMY) increased its stake in BMS-936558 (formerly MDX-1106) by regaining worldwide marketing rights for the drug except in Japan, Korea and Taiwan. This was the result of a deal with Ono Pharmaceutical, who originally held ex-US rights for the drug. In return, Ono received marketing rights for Orencia, a BMS drug  for Rheumatoid arthritis which is already in the market. BMS’ decision to exchange its stake in a product with real sales in return for a candidate in mid stage clinical development might seem odd at first glance, but a quick look at BMS-936558’s data is enough to understand the deal was a brilliant move.  

Like Yervoy but better

BMS-936558 is an antibody against PD-1, a protein involved in repressing the immune system. Blocking PD-1 with an antibody activates the immune system and enables it to fight tumors. This concept has been validated by BMS’ Yervoy, which blocks CTLA-4, another inhibitory protein expressed on immune cells. Yervoy and BMS-936558 belong to the same class of drugs which release the brakes on the immune system, generating an anti-cancer response using the patient’s own immune system. However, they should not be viewed as competitors but as complimentary (BMS is even evaluating the combination of the two antibodies in a phase I).

Yervoy, which recently got approved for metastatic melanoma is expected to generate over $1.5B in sales solely based on the current label. Sales could easily double if Yervoy becomes approved for additional indications. BMS-936558 still has a long way to go and, but based on the limited clinical data it appears more promising  than Yervoy in many aspects.

With respect to efficacy, BMS-936558 has not been evaluated in large randomized trials but it still generated impressive signs of efficacy in multiple indications. The extent of this effect appears superior to what Yervoy demonstrated in early stage trials. Data presented last year at ASCO (discussed here) included a 30% response rate in patients with late stage melanoma or renal cancer, which is very unusual for a single agent. BMS-936558 also had an intriguing signal in lung cancer with a response rate of ~10% and disease stabilization in an additional 40% of patients. It is important to note that response rate is believed to under-represent activity of immunotherapies, as they tend to be more subtle with a durable long lasting effect even after discontinuation of treatment.

Additional potential advantages include a better safety profile compared to Yervoy and the ability to select patients based on the expression of relevant biomarkers. Lastly, from a regulatory and time to market point of view, BMS might be able to get BMS-936558 approved for certain indications (primarily renal cancer) using progression-free survival whereas Yervoy could be approved only based on overall survival.

Increased competition

Anti-PD-1 antibodies are viewed as the next big thing in cancer immunotherapy owing to promising clinical data with BMS-936558. There are two additional PD-1 antibodies in clinical testing: Teva’s (TEVA) /CureTech’s CT-011 in phase II and Merck’s MK-3475 (MRK) in phase I. Last year, GSK (GSK) entered the arena after signing a $500M ($23M in upfront payment) deal with Amplimmune, which is developing drugs that target the PD-1 pathway.

BMS is in a clear leadership position with the most advanced drug, despite being the 2nd company to enter the clinic. Its strategy to go after indications that are traditionally suitable for immunotherapy and show a direct anti-tumor effect should enable it to choose and pursue regulatory approval in a relatively short time. In addition, the experience and expertise gained with Yervoy are extremely valuable.

Route to market

BMS appears to view renal cancer as the initial route to market for BMS-936558, in contrast to its strategy with Yervoy, which focused on melanoma. The company started two phase II studies in renal cancer earlier this year, which could have topline data already in 2012. Renal cancer appears to be a reasonable choice given the impressive signs of efficacy, good track record with immunotherapies and the unique mode of action that is different from that of approved agents (Sutent, Afinitor etc. ).  

Additional important data should come from the combination trial with Yervoy in melanoma. Teva could have important results with its PD-1 antibody from a randomized phase II in colon cancer. This will be the first randomized data set with a PD-1 antibody, using progression-free survival as a primary endpoint. This could also be the first clear sign of efficacy for CT-011, which until now has been evaluated in settings where it was impossible to show a clear signal with a single arm study. Merck could also have data from its phase I next year, which started enrolling patients last April.           

In summary, BMS increased its exposure to one of the most promising development programs in oncology. There is still a great degree of risk associated with every clinical program, but based on the available data, BMS-936558 has an exceptional risk/reward ratio with a proven efficacy, good safety profile and and a blockbuster potential.

 

Just like the rest of the industry, we at Pontifax are constantly looking for innovative projects in the field of immunotherapy, with an emphasis on novel targets. Last year, we established cCAM Bio as part of our strategic collaboration with Roche. cCAM Bio is developing antibodies for CEACAM1, a protein that is used by tumors to suppress the immune system. This target has been known for decades but only recently its role as an important immune checkpoint in cancer has been elucidated. Interestingly, the target bears a great deal of similarity to PD-1 with respect to signaling pathways and expression on tumors. More info including preclinical results can be found on the company’s web site.

 

                                        Portfolio holdings as of September 25th, 2011

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22 thoughts on “BMS zeroes in on its next blockbuster

  1. Hi Ohad,
    What do you think of ARRY’s current PPS? considering recent article saying that potential lung cancer treatment misses statistical significance in mid-stage trial. I would like to invest and am hesitating between ARRY, CLDX, SNTA. Which one do you think is more attractive?
    Would appreciate your reply,

  2. imo all are good picks. I wouldn’t bet on a single small cap biotech as a general rule.

    Re Array, the news is obviously disappointing but I wouldn’t dismiss this indication until I see the data for the secondary endpoints as well as the exact difference in OS between the 2 arms.

    Ohad

  3. Ohad,

    Can you give your opinion on the recently announced results of ARRy’s Selumetinib in the Phase II KRAS-mutant NSCLS run by AZN? Will AZN take this into Phase III?

    RB

  4. hi Ohad,

    let me ask you a – rather stupid – follow-on question to above issue ref ARRY. MEK162 (Novartis) is the next-generation MEK-inhibitor. What is in general different to selumetinib? I mean, if efficacy has been much improved compared to first generation MEK-inhibitor selumetinib, then we might expect substantially better results for MEK162? I always had the impression that expectations for selumetinib were anyway rather low (just a feeling…)

    ARRY now below USD 100 million market cap. That seems more than rediculous – or are we missing something?

    If you talk to ARRY, it would be interesting to hear their latest cash runway projection. (I think that’s the main negative share price driver right now)

    Thanks!

  5. Hi Ohad,
    What’s your opinion on CLDX? Does the selling off stem from the market or is there anything else we are missing? How low can it go?
    Thanks Chris

  6. I’m also interested to hear what the co says about the recent “failure”. By recent failure, I mean the recent press release about the result of the trial.

  7. Christian,

    It’s hard to say whether MEK162 is superior to selumetinib in terms of efficacy but it certainly looks more potent and attractive in terms of pharmacological properties. Experience taught us that every drug has a life of its own and it’s hard to predict which one is better without large scale trials. One advantage MEK162 has is having Novartis and their expertise on board.

    In general, the industry is still trying to find the right way to incorporate MEK inhibitors and most companies including NVS, AZN and GSK are pursuing combinations for obvious reasons. imo, based on the limited available data, GSK’s MEK inhibitor is the most promising but things could change.

    I agree about ARRY’s market cap, I like the risk/reward going forward with multiple catalysts and the majority of work being financed by others.
    Will ask about cash runway.

    Ohad

  8. Chris,

    I don’t know of anything that is specifically related to the company or its programs. The next two catalysts are initiation of p3 for the GBM cancer vaccine and data for CDX-011 in breast cancer. Delays in the p3 or failure in the breast cancer trial could be potential reasons for the weakness but I haven’t come across anything specific.

    Ohad

  9. Hi again Ohad,

    what do you think about Ablynx and its current market cap of EUR 177 million?

    some weeks ago it was a 400 million company like MorphoSys, and my feeling was that this does not fit together (either MorphoSys undervalued or Ablynx overvalued). With the current market cap, Ablynx seems more interesting now.

    What’s your opinion?

  10. Have to admit I still didn’t quite get the allure of VHH abs and their edge over conventional abs, especially when they’re going after soluble targets such as RNAKL (dmab) and TNFa (Humira, Remicade…) or even receptors that are well inhibited with marketed products (IL6R)

    I do like their anti-thrombotic program and think there is value and innovation there.

    Putting my opinion aside, there is certainly interest among pharma companies in their technology.

    Ohad

  11. Ohad,

    Nice article on BMY, as you know I am very long BMY and now free/clear 1443 shares in my portfolio! That being said just wanted to go down memory lane for a sec,….my first blog response to you was way back in 2008 over ROSG and I was just doing my DD on the space..never bought ROSG, got scaredas I delved deeply and became suspicious, but I did like a couple others in EXAS and RGDX!

    Have done well w/ both of the later two and still hold RGDX a small Dx play who has a Melanoma Dx just made available in June…Im long RGDX about 32K shares net 1.16 now and await the Q-3 revs report…should hit profits this time…wait and see!The Ipi approval was timed real well w/ RGDX melonoma BRAF test so its a win win for me in both!

    Did you listen to the M D Becker Immunotherapy Conference yesterday?

    Any thoughts?

    your old friend,

    retiredpharma

  12. Hello Ohad,

    Synta stock has dropped near 52 week lows….perhaps because of the economy but also (in general) and lack of much news/updates (company specific). It also seems like short interest is very high….short ratio of 27 days Can you make any projections on what synta may be trading for if it strikes a lucrative partnership? Thanks.

  13. Frank,

    I am not very familiar with names you mentioned, Dx is not my field. EXAS seem to be doing very well recently, based on the data they have a real shot at replacing FOBT for colon cancer screening.

    No I didn’t listen to the webcast, is it available online?

    Ohad

  14. Sam,

    There are two issues which I consider to be “make or break”

    1) A geographical licensing deal for ganetespib.

    2) More positive data in ALK mutated lung cancer patients, especially in crizotinib pretreated.

    I have no idea whether stock movement reflects bad news on either front.

    Ohad

  15. Ohad / Christian,

    Ablynx is still falling. I suppose Pfizer will not bring ATN-103 in Phase III, maybe someone has not public available information…

    Normally I would say at this level Ablynx is a strong buy.

  16. Ohad
    Why do all the analysts think that Alphadrin will diminish Cabos potential?As in many cancer indications, its always a cocktail of drugs and drugs targeting diff. kinases will end
    up in a cocktail at some future time..Any updates with your
    ARRY Visits..
    Thank you as always.

  17. Toby, again I like only the vWF program at Ablynx but the platform has got to be worth something given the interest from pharma partners.

    Provocateur, imo (and it looks like everybody else has the opposite opinion on this matter…), cabo is a threat to alphadrin and not vice versa. If cabo’s bone effect is real, alphadrin could become obsolete, although it has good activity.

    Still haven’t spoken to Array.

    Ohad

  18. Ohad thanks for your work!

    I have the impresssion that you have a great knowledge of antybody-based drugs. Thus the question to another antybody-company: BioInvent. Do you have an opinion?

    Toby

  19. I am regular visitor, how are you everybody? This piece of writing
    posted at this website is genuinely pleasant.

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