Clovis Oncology – still a long term core holding

Clovis (CLVS) was one of ASCO’s clear losers following safety issues for its lead program, CO-1686. Despite demonstrating robust efficacy in T790M+ lung cancer, hyperglycemia associated with the drug raised concerns about its ultimate market positioning vs. its close competitor, AstraZeneca’s (AZN) AZD9291.

At ASCO, the two drugs generated similar response rates of 58% and 64%, respectively, but with different safety profiles. While Astra’s safety profile was in line with expectations (skin toxicities, lung inflammation), Clovis disclosed an increase in hyperglycemia events which occurred in the majority of patients. The company also disclosed that although in most cases blood sugar levels were controlled with oral drugs, a handful of patients started injecting insulin. This triggered a shift in sentiment favoring AZD9291 solely based on safety and patient preference.

On a standalone basis, side effects with CO-1686 are manageable and clinical risk/reward is still favorable but given AZD9291’s “cleaner” profile, AstraZeneca now has the upper hand. Importantly, the market’s focus on side effects relies on the assumption that the two drugs are comparable in terms of efficacy.  If one of the drugs proves to have superior efficacy, this would overshadow any safety differences and guide physician preference. Going forward, investors will compare PFS of the two drugs across their respective studies. At ASCO, Clovis’ PFS curve appeared optically better but data sets were immature and therefore unreliable.

CO-1686 has value even as an underdog

Both companies are aggressively pursuing Tarceva/Iressa failures with T790M+ as a first indication. At its ASCO analyst event, AstraZeneca disclosed they will file for accelerated approval in 1Q15, slightly ahead of Clovis’ timelines (mid-2015). For first line EGFR mutated patients, Clovis has a 6-month lead as it expects to start a head-to-head trial vs. Tarceva around mid-2015. Both companies intend to pursue combinations with PD-1 antibodies later this year whereas AstraZeneca has an entire pipeline to choose from regarding additional combination studies.

Acknowledging AZD9291’s milder safety profile, CO-1686 may still capture a meaningful market share assuming efficacy is comparable. For diabetic patients, AZD9291 will probably be the drug of choice but some patients may prefer taking CO-1686 with metformin (which is an extremely safe drug) in order to avoid the EGFR-related toxicities  (GI and skin toxicities) associated with AZD9291. EGFR-related side effects are not life threatening but they are viewed as a major issue for some patients.  This is particularly relevant for 2nd line patients who suffered from EGFR-related side effects while on Tarceva for almost a year.

Assuming 70/30 split in favor of AZD9291, CO-1686 still represents a $350M and $700M commercial opportunity for 2nd and 1st line, respectively. As a reference, Tarceva and Iressa generate ~$2B  annually.

A diversified pipeline

Despite the disappointment at ASCO, I intend to keep Clovis and take advantage of future price fluctuations for adding more shares. Clovis has 3 drugs with clear activity in humans and a multitude of risk/reward profiles:

CO-1686 has a high likelihood of approval and although it will probably not become the market leader, it still represents a significant commercial opportunity.

Rucaparib (PARP inhibitor) has clear activity in breast and ovarian cancer with BRCA+ tumors but the PARP arena is highly competitive. A potential differentiator might be Clovis’ approach for patient selection beyond BRCA+ tumors. An ongoing phase II in ovarian cancer is designed to identify additional subsets that may be sensitive to rucaparib.

Lucitanib (VEGFR/FGFR) is still early in development but preliminary data in FGF-aberrant breast cancer are very encouraging. At ASCO, Clovis presented already published results showing a PR in 50% 6/12 of patients and disease stabilization in the remaining patients. The lack of hyperphosphatemia (increased phosphate levels in the blood) led the discussant (David B. Solit) to conclude that the effect is not attributed to FGFR inhibition. Nevertheless, it is plausible  that lucitanib does not cause hyperphosphatemia because it does not inhibit FGFR4, in contrast to other FGFR inhibitors in development. This is supported by a recent publication that shows that hyperphosphatemia emerges only when both FGFR1 and 4 are inhibited.

Increased focus on lucitanib in 2014

With a market cap of $1.55B, the market ascribes most of its valuation relies predominantly on CO-1686 and ascribes limited value to rucaparib or lucitanib. Lucitanib (which is why I got into Clovis 6 months ago) may become an important part of the Clovis story later this year if the drug continues to show efficacy in FGF-aberrant breast cancer. Servier, which has rights to the drug outside of US and Japan, could have initial data from a breast cancer phase II it opened in December 2013. The trial is recruiting both FGFR1+ and FGFR1- patients in order to assess whether lucitanib’s activity is more pronounced in biomarker-positive cases. Clovis will start a US trial in FGFR-driven lung cancer.

If lucitanib continues to demonstrate a >30% response rate in FGF-aberrant breast cancer, it may become a new stand of care for FGF-aberrant breast cancer. Given that FGF-aberrations (FGFR1+ or 11q+) are observed in 25% of cases, this segment could be as big as the HER-2 market, which represents a $1.5B global opportunity in advanced breast cancer (excluding adjuvant). Activity in lung cancer (data expected in 2015) could open a similar commercial opportunity based on a ~15% incidence.

From a competition perspective, there are other FGFR inhibitors in clinical development  from Novartis (NVS)  (BGJ398), AstraZeneca (AZD4547) and J&J (JNJ) (JNJ-42756493) but all are FGFR selective and do not inhibit VEGFR. Based on the limited available data generated by these molecules, their activity as monotherapy is limited to FGFR-fusions, which are rare and occur across multiple tumor types. Of the dual FGFR/VEGFR inhibitors, lucitanib has a clear lead.

In summary, Clovis should be viewed as a core oncology holding based on a pipeline of 3 targeted therapies with clinical proof-of-concept, biomarker-defined patient populations and a capable management team with a proven track record. Although the company has significant commercial rights for all three programs, its market cap reflects only CO-1686’s potential in 2nd line T790M+ lung cancer assuming AstraZeneca gets the lion share of the market. Updates from lucitanib may validate the efficacy signal seen for lucitanib in breast cancer and put Clovis in the lead in a $1.5B race.

Portfolio updates

We are initiating a position in Foundation Medicine (FMI) based on the growing need of genome profiling solutions in oncology (discussed in my post-ASCO write-up). We are also selling Curis at a 36% profit. We plan to add an additional position in Clovis during 2014 based on price fluctuations.

 

Portfolio holdings – June 15th, 2014

portfolio June 15 2014biotech etfs - June 15 2014

102 thoughts on “Clovis Oncology – still a long term core holding

  1. Thanks Ohad. When do you expect the next update on CO-1686? I’m not sure if FDA will approve AZD9291 without Phase II at the 80mg dose even though their Phase 1 was large. Though conjecture, I believe Q1 for AZN is unlikely. Also based on Patrick Mahaffay’s comments (1) expectation is ORR is likely to be higher than 58% over time and (2) on CNBC he stated that initially patients were treated with insulin as they were unsure of how to handle increased BS, but now all patients are on metamorphin. IMO the hyperglycemia effect has been blown out of proportion. I have many family members on metamorphin, one of who has MM and had to discontinue Revlimid because of rash. However G3 rash on AZD9291 has been considered okay even though % of patients experiencing it is equivalent to CO-1686’s hyperglycemia. Anyway my 2cents. I plan on adding on dips. Looking for some stabilization in the SP before adding further. When approved CLVS SP will be a lot higher than today IMO.

  2. Manish – I assume both programs will have updates this year as both companies are rapidly accruing new patients. IMO both companies will have enough patients at the relevant dose for accelerated approval by YE 2014.

    I am somewhere inthe middle with respect to significance of hyperglycemia. I believe that for most patients it will be manageable with oral drugs and those who won’t be able to reach glycemic control will switch to 9291. At th analyst event at ASCO, I recall Mahaffay mentioning a single patient who was on insulin for a year so at least in some cases the problem is real.

    Ohad

  3. Thank you Ohad.

    I sold my stock of curis this month: I wait for see the sales of erivedge this year and the possible upfront with debio.
    I bought Conatus and Oncogenex.
    What do you think about this two companies
    Thanks.

  4. Caesar – OGNX I don’t like, especially after the recent p3 failure. I just don’t believe in antisense for solid tumors without a proper delivery system.
    CNAT is very interesting to me but I don’t have a concrete opinion there.

    Ohad

  5. Hi Ohad,

    any thoughts on the Ablynx caplacizumab TITAN trial results?

    brgds
    Christian

  6. Christian – Nice comeback! In contrast to the rest of their pipeline, this can be a first in class drug. Top line results look quite encouraging although I am not too familiar with the disease, will wait for today’s webcast to learn more.

    Ohad

  7. Ohad
    I listened to the ARRY presentation at Wells Fargo. They sure are very optimistic that they are going to get Binemetnib back from Novartis. It was an interesting talk. If Bin does come back to them wouldn’t it seem logical that their market cap should be more in the CLVS range of 1B to 2B?

  8. Declan – On ARRY, I’d say that seems highly illogical. Why should a big pharma partner giving up on a drug, particularly when they’re still interested in that specific class of drug (see separate deal NVS did to gain rights to another MEK inhibitor), be viewed as a positive at all, let alone worthy of ARRY trading for 2 to 4x current value? You never know in biotech investing, but that just doesn’t make sense to me. Put me in the camp that believes that if NVS returns rights back to ARRY, ARRY shares are likely to fall to some degree.

  9. I am quite sure ARRY/NVS MEK162 contract should have non-competing provision on same target, thus both ARRY and NVS can’t separately develop another MEKi on their own for a fixed period of time, which is why ARRY CEO said most likely case is NVS give up either MEK162 or Mekinist. If I remember correctly ARRY/AZN Selumetinib contract had similar provision that ARRY could develop another MEKi MEK162 only after certain numbers of years.

  10. Ohad
    do you follow AQXP? Impressive list of investors: PFE, JNJ and Baker Bros, each holding 12-15% of the company. Only $95M company with a lot of cash.
    They have SHIP1- a PI3K modulator. The results in COPD look solid – 62% inhibition of inflammation.
    –thanks–andre

  11. Declan – I agree that if ARRY gets binimetinib back, it will have a positive effect in the long run given to thedrug’s development stage and expected p3 read outs (especially NRAS melanoma and ovarian cancer). Preliminary data from ASCO showed great potential for MEK inhibitors in BRAF+ colon cancer and other indications may be added to the list. 2 primary issues are: 1-need to raise cash to support the program 2- many of the combination studies are with NVS drugs so ARRY will have to find other drugs to combine binimetinib with (timeline implications)

    Mcbio – it appears that in this case investors will appreciate that NVS is giving binimetinib back due to legal constraints and the availability of an approved direct competitor (mekinist).

    JQ – from what I understand it is mostly based on anti-trust rules.

    Andre- been awhile since I last looked at their results, will check it out. thanks for bringing this up, sounds interesting.

    Ohad

  12. Ohad, earlier in 2014 you were anticipating a general bio pullback based on things being a bit pricey. That did occur, but a lot of ground has been reclaimed (based on IBB, e.g.). Are you concerned that things in bio land are getting frothy again? IBB peaked at 273, dipped to 215, last close was 256.

  13. mcbio – Listening to ARRY Wells presentation, they indicate that if MEK162 will be handed over to ARRY, it will be around/after NRAS filing. If the NRAS study is positive, I don’t see how this would not be a positive for ARRY and should increase pps significantly.

    JQ – Squarer indicated both non-compete on MEK from their Novartis agreement and also anti-trust. I think if AZN is looking for acquisitions, ARRY would be a great candidate.

    Ohad – Question on EXEL and the cabo trial. The PIII is in second line (those who failed abiterone or xytiga) and also subsequent therapy is allowed, would FDA approve on PFS as long as OS trends in favor of cabo if there were a significantly higher % of subjects in control arm who progressed and received 3rd line therapy using another agent? This is similar to the AVEO conundrum.

  14. Mike – I still feel general markets are high, which is also true to the biopharma sector.
    Although drug development has become more efficient and de-risked in general and despite many success stories (see recent data from VRTX, AERI), current levels imply a lot of optimism and little risk.
    This is why I prefer to have a ~30% cash position. So far, it hasn’t panned out though :(

    Manish (EXEL) – No. Cabo can be approved only with a stat sig. survival benefit, as overall survival is the 1ry endpoint. If there is no survival benefit, the company might use COMET-2 to approve cabo as a pain drug but this is a different ball game from a commercial standpoint and may introduce pricing complexities.

    Ohad

  15. Curis like a phoenix ?
    Strong interest in the stock with high volume: is it thanks to the new IND for Erivedge in idiopathic pulmonary fibrosis (phase 2) ?

  16. caesar – Data for teh AML and IPF studies are still far away imo.

    Richard – I don’t plan on adding beyond the 3 positions we already have. Don’t think there is anything specific with the company, just choppy markets. The next catalyst might be an ex-US licensing deal but timing is unclear.

    Ohad

  17. I am tracking them and like the CD123 program for AML. Not optimistic about te HER2 program though. I think there are better platform stories like BLUE, AGIO and FMI.

    Ohad

  18. Richard, I started a position in AMBI today at 5.90. 500 shares, so a starter position. Im continuing to watch .. I believe 5.75 is the 52 week low. This will be a run up into ASH in 6 months with an update on P3 progress. Not sure if Im early or not, but again a started. Chris, again my opinion and not Ohad, I dont see how CLVS is not a buy here. With the current PFS duration, the one AE of hypergylcemia in my opinion is non issue. I like their development strategy and they will have readouts on Lucitabinb, CO1686 and Rucaparib P2 ovarian and Pancreatic in 2015.

  19. Manish,

    I’ve been adding to my AMBI position. I believe the valuation here is compelling.

  20. Chris – I plan on adding more this year, not sure about exact timing which is very hard to expect.

    Manish – To me CLVS’ most important readout is lucitinib because expectations are so low. The recent data for MGNX’s FGF23 antibody reinforce Clovis’ argument about the lack of hyperphosphatemia being related to FGFR4 sparing profile of the drug.

    Ohad

  21. Ohad I read, cant remember where, but their numbers on cobimetinib were fairly conservative to what u posted….how did you extrapolate these numbers or did you take them from and exelixis or roche presentation?

    Still good news for us EXEL longs regardless

  22. Robert – The benchmark here is Zelboraf’s sales, which provide a good approximation given that cobi will be given in combination with Zelboraf (at least in melanoma). Total revenues to EXEL (co-promotion in the US+ royalties ex-US) could reach $150M assuming $450M in global sales (half in the US where EXEL gets 50% of sales below $200M).

    This excludes any label expansion such as combination with PD-1 or other targeted agents.

    Ohad

  23. Hey Ohad
    so it would be logical to add some excel here, now only up 5% and very close to bottom, while we just got a major derisking
    Dan

  24. Agree, although the major derisking will take place after results are presented. The bar is set low based on the limited PFS benefit GSK’s combo has demonstrated, so there is a reasonable chance for Roche’s combo to show a stronger effect.

    Ohad

  25. Dan – Congrats on EXEL, you are up 15+%.

    Re: AGIO, I am a little bit reluctant to buy at these levels and feel FMI represents a better way to get exposure to the AGIO story. If AG-221 is approved, FMI is looking at a $100M opportunity just in AML. This may grow dramatically if they see activity in additional tumors with AG-221 or AG-120.

    Ohad

  26. Hey Ohad…..vis-a-vis the EXEL/ Roche press release about coBRIM, is it typical to not to list any specifics about the clinical data? Is this something to worry about ? Thanks as always ! Also, do you have an opinion on LGND? I know its not a classical early-stage biotech, but seems like an interesting business model.

    Thanks !

  27. Richard – I am not a big fan of their data so far. They need to show strong correlation with PSMA expression or impressive efficacy in their ongoing p2 (for example in KRAS+ NSCLC) to become attractive imo.

    Neo – Yes it’s typical to announce a trial met its endpoints without disclosing additional information. The onlt thing to worry about is whether the PFS benefit is higher than GSK’s combo.
    Sorry, don’t know LGND well enough to answer..

    Ohad

  28. Thanks as always, Ohad ! Looks like you might be getting the correction you were looking for :(

  29. Well I just added more AMBI today at 5.20 :-) Hopefully down the road I get to thank Janet Yellen for this correction. Anyway, for the others on here who are in CLVS, I read on a blog that CLVS is now requesting all new participants start on Metamorphin unless the patient explicitly requests otherwise. So this is definitely a departure from past info and it is likely that a lot more than 22% of patients suffer from hyperglycemia. So it appears to be more important than ever that PFS using CO-1686 is much higher than AZD 9291. So Ohad, here is a question for you. How important do you think IGF1R is in the overall picture. CLVS portrays this as an advantage especially for brain mets and the ability for CO-1686 to pass BBB. But this is also the cause for hyperglycemia. No clear indication on AZD on how it affects brain mets.

  30. Neo – Yep biotech had a rough day, especially some f the popular IPO class of 2013 (AGIO, BLUE etc). My concern is now more about the overall markets (which are near all time highs) and especially larger pharma/biotech stocks that had a huge run (justified to some extent but in this business things often go wrong).

    Manish – I also added more AMBI yesterday, their market cap is so cheap I find it hard to resist . Nevertheless, it’s always important to limit exposure to a single stock so I don’t intend to increase my exposure from now on.
    With respect to CLVS, it’s hard for me to interpret that, This might be similar to steroid pre-medication with drugs to prevent infusion reaction. Metformin is such a well tolerated and cheap drug that sometimes it makes sense to give to everybody and titrate along the way. This is just my speculation, don’t know how results actually look like. I wouldn’t count on the IGF1R activity for enhancing the therapeutic effect, so far this class was a complete failure. BBB angle is also unclear, at ASCO the presenter mentioned responses in brain mets but also cases of progression that manifested itself as new brain lesions.

    Ohad

  31. Hey Ohad ! What do you think of the Puma’s results ? There’s already some rub-off on the ARRY-ONTY stock prices.

  32. I have to give props to Ohad…he called the arry380 collaberation between arry and onty as a follow in the footsteps of puma type senario….Do not doubt the Ohad!!! Ohad…interesting exel action late day whoa!! I think its just another roche hype play….with the talk of cabo working after erlotinib failures…just another iron to stoke the roche buyout fire….again u called the exel NCSLC as a reason to stick around….u….your good

  33. Thanks guys, i am out of touch these days as I was drafted to the army, currently on the gaza border. Hopefully things will return to normal soon and we’ll be able to deal with the important stuff.

    Ohad

  34. Wow. Good luck Ohad and be safe. My prayers to you and your family’s well being. It is very unfortunate what is happening. I hope we hear of a truce and an end to this conflict in the very near future. We in the US do not consider how lucky we are being so far removed from this day to day conflict. Hope you come back home soon.

  35. holy crap…omg good luck sir…u have a great leader a man to our man-child here in the US….hopefullu this is resolved soon…give some of those officers a couple solid stock tips and they will make sire u stay oit of the scrum!!. Will keep u in our prayers sir

  36. Oh no. Keep safe, Good luck, hope it all end soon,and you can return to normal life soon.

  37. Hey Ohad
    take care and be safe… I was thinking about you when the situation precipitated a few days back. I do not know anybody else living in Israel. Hope things will settle down very soon.
    Dan

  38. Hey Ohad, hope this will end soon. Best wishes to you and everyone involved!
    Ike

  39. May God watch over you, Ohad, and your fellow soldiers. And God bless your mission, the nation of Israel and all of Israel’s citizens.

  40. Ohad, let me also add my best wishes – I hope you are home safe and sound very soon.

  41. Hey, how’s everybody?
    what do you guys think of ARWR and STML?
    also, it seems that ARRY may get a second orphan drug status
    Anybody invested in KITE?
    Thanks
    Dan

  42. hi Dan

    reg. Arry, which drug are you talking about?

    LOXO had a good IPO, people seem to like their lead drug (which is from ARRY)

  43. re ARRY/LOXO

    just as reminder from PR

    “Under the terms of the agreement, Loxo will fund Array’s preclinical research, providing access to Array’s world-class discovery platform and scientists, and will be responsible for target selection and conducting clinical trials. Array is eligible to receive up to $434 million in milestone payments and to receive royalties on sales of any resulting drugs. In further consideration of the rights granted to Loxo under the agreement, Array also received shares of stock in Loxo.”

    could be a nice value driver in the medium future

  44. Hi Ohad, I hope you are back home with your new born and wife. This tunnel business is scary as hell. Just listen to IMGN conference call, guiding to 105 mil i think…2015 should be a good year

  45. Ohad, best wishes to you. Hope that you are back soon. We need you back along with your biotech blog.

  46. Ohad, forgot to ask also about NKTR, own a bunch for a while, the PPS recovered in the last year. Any thoughts?

  47. Back to business, thank you all for your support :)

    Ted – SNTA is making progress with a new CEO and 2 new late stage studies but I still think they should focus on biomarker defined tumors (ALK, ROS, RET, Trk fusions etc.). I don’t plan to add more at this point.

    Dan – ARWR – a lot depends on their HBV data, so far there is good anecdotal data from a single chimp but valuation is too high imo.

    STML- Clear activity in a rare tumor type (BPDCN) but pivotal trial just starting and they may face competition from other CD123-targeting agents which will not be as immunogenic and can be given chronically.

    ARRY – I am very excited with the Trk inhibitor they outlicensed to Loxo (should have kept it in house). Still no data but preliminary validation with a competing less selective Trk inhibitor from RXDX.

    Roy – thanks. Re IMGN, a lot depends on 1st line MARIANNE data. Looks like meaningful data with 853 and the EGFR program will be presented next year. Sorry, don’t have a concrete opinion on NKTR.

    Luis (ARQL) – Just finished hearing their call. Despite my losses to date and the negative sentiment I am actually excited about their Akt inhibitor, which appears to have an excellent clinical profile so far (need to wait for alternative dosing schedule). The next challenge would be identifying the right patients/combinations, which is something competitors (AZN, Genentech) are working on. Plus, I was intrigued by preclinical results in a rare genetic disease to be unveiled in Q4. The stock is dirt cheap.

    Ohad

  48. thanks ohad
    Glad you are back…did a few tours in Lebanon back in the day (early 80ies )….never imagined it would ever get that bad.

  49. Ohad, great to have you back! Glad you are okay. On the stock front, I agree completely with you on ARQL and will continue to hang on (may even add at some point). They made it clear in last CC that they are favoring the Akt over the FGFR inhibitor. Yes, interesting about the rare genetic disease. I wonder which one they are referring to.

  50. OHAD, I AM VERY PLEASED THAT YOU HAVE RETURNED TO YOUR FAMILY! THE VERY BEST TO YOU!

  51. Glad you are back home as well Ohad.

    Regarding Exel and comet 1 results, any way to tell the time frame? Interesting how the stock has been up from it’s low with really high volume.

    Take care.

    Dan S.

  52. happy to hear you are well. Take care and nice to read your answers and posts as always. I am going to look at ARQL now. Thanks
    Dan

  53. Ohad
    could you please have a look at the new press release by BIOD, whether there is value there, considering the company’s market cap is so low?
    Thanks
    Dan

  54. Hi ohad,

    So glad that you are back safe and sound. Thanks for all your replies and looking forward to your next pist.
    Thanks,
    Chris

  55. Thanks again for the kind words. It’s good to be back.

    Dan S. – EXEL is expected to announce data from COMET1 around October. Before that the cobi data set should also make an impact on stock price (September).

    Dan – It’s for me to assess BIOD’s press release as the data they provide is very preliminary. Basically, they are talking about kinetics of glucose levels after meal and their data imply their ultra-rapid insulin is somewhat better at decreasing peak glucose levels. Not sure what will be the approvable endpoint here, as regulators will probably want to see long term HbA1c levels and a lot of safety follow up.

    Ohad

  56. Hi Ohad, good to have you back. Onartuzumab combined with Erlotinib’s failed in NSCLC despite the focused selection of patients based on MET expressing disease. Roche’s half year report also indicated that trials HCC, CRC, and Gastric cancer in different phases were being halted; they’re either going back to the drawing board on trial design or flushing the compound out of the pipeline. Only a few trials remain open for Onzartuzumab including one with vemurafenib and cobimetinib; do you have any knowledge / thoughts about it, in particular its failure in NSCLC despite a screened population?

  57. Peter – I don’t see any reason to invest in AVEO. Tivozanib might have been an excellent partner for PD-1 antibodies as the other VEGFR inhibitors are not easily combinable with PD-1 antibodies.

    Wildbiftek – From what I understand the program is terminated. It is another lesson in humility we keep on getting in this field. (although there were clear warning signs in onartuzumab’s p2).

    Ohad

  58. Hi Ohad, what were some of those warning signs? Would you happen to have reference to peruse? Thanks.

  59. Hi Ohad,
    Array reported financial results. About binimetinib they say: “If Novartis’ binimetinib development and commercialization rights are returned to Array, Novartis must provide support for ongoing clinical studies as specified in our agreement.” Do you see this point as a cloud? In particular with regard to questions about the financing of the remaining Phase III trials. Will they have to pay an amount for the full rights? But data so far looks good and they will have a Phase III MEK inhibitor with a projected regulatory filing in 2015 for NRAS-mutant melanoma, that’s fine. Altogether the market cap of 490 M. for this big diversified pipeline is in my opinion really cheap. Thanks for your comments and I wish all people in your region peaceful days.
    Toby

  60. Hi Ohad,

    I’m amazed at how under followed is ESPR, very low volume and only $240M market cap. They have a big catalyst (Phase 2b ETC-1002-008 in 349 patients with hypercholesterolemia with or without statin intolerance) confirmed for early October but the market doesn’t seem to care. Do you think I’m wrong in believing it could at least double the stock price if positive? Thanks.

  61. Wildbiftek – There were more EGFR-mutant patients in the Metmab arm. These patients are more sensitive to Tarceva so the effect they saw in P2 probably emanated from that.

    Toby (ARRY)- We don’t know what exactly “support for ongoing clinical studies” means. Does NVS have to fund the studies until completion or is there a fixed amount? Agree about ARRY being a diversified play, even after multiple terminations (614, cFMS, etc.) there are new programs funded by other companies (ONT-380, LOXO). Eventually, getting binimetinib is a big positive, but the market doesn’t like the uncertainty. Another issue is that many combination studies are with NVS compounds, will they be pursued?

    Usubanas (ESPR) – Totally agree, it’s actually a good thing to have limited interest ahead of an important catalyst. These days it’s hard to get investors excited with lipid lowering drugs due to the strict regulatory requirements and development timelines. I still believe ESPR could find a partner or get acquired if the p2b data are good.

    Ohad

  62. Ohad, I took my losses in AVEO before and moved on and will likely never go back but couldn’t tivozanib still be used in combo with PD-1 antibodies in the future?

  63. Heeeee’s baaaack!!!! Welcome back Ohad, glad to hear you are safe and back to business.

    Why do you say Comet with report in October? Many have speculated that the trial should have ended by now and Exel stated to report as data reads out….if they were truthful…how long does it usually take to crunch the numbers?

  64. Welcome back Ohad. Glad to see you back and safe. What do you think ARRY will do now that the FOCUS trial failed its primary endpoint? I dont see them initiating a P3 trial of Kyprolis + Filanesib. Maybe Velcade? How much of its current SP is owed to Filanesib?

  65. Mcbio – Tivo is ideal for combination with PD-1 antibodies as it is by far the best tolerated VEGFR inhibitor out there. If I were AVEO, I would look for a way to do a combination study. From a regulatory perspective, it might be easier to wait until nivo is approved in RCC and do a simple 2 arm study.

    Robert – Thanks! From what understand the final analysis (need to wait until there is a suffivient number of events) has yet to occur so the company is still blinded to the data. October is an estimate by some analysts but nobody knows for sure.

    Manish – Thanks.I don’t think FOCUS matters here, Kyprolis will probably still be on the market as salvage therapy based on its accelerated approval imo. Remember that the 1ry endpoint was OS, which may have been confounded by crossover and subsequent therapy with Pomalyst.In any case, AMGN will file for standard approval based on ASPIRE so the drug will be commercially available.

    Ohad

  66. ARRY-NVS return of Binimetinib: The support NVS to provide to ARRY on development of Binimetinib will probably be similar to what PFE provided to PGNX after Wyeth (original PGNX partner on Relistor) acquisition which is substantial: cash payment $10m, reimbursement up to $9.5m for development cost, finishing ongoing 1,000 patients ph3 trial, etc.

    http://ir.progenics.com/releasedetail.cfm?ReleaseID=415562

  67. Hey Ohad
    have you looked at IMDZ? a recent IPO. They are in immuno-oncology. They have just signed a deal with Sanofi on food allergy treatments. They have other deals with big pharma and the management team seems experienced.
    Let me know, if or when you develop an opinion about them.
    Thanks, as always,
    Dan

  68. what does everybody make of the ebola epidemic in West Africa. the world at the pharma industry has been caught with their pants down. I find it very troubling, seems something is way wrong with the industry.
    what are your thoughts?

  69. Hi Ohad,

    Do you have an opinion on Aquinox Pharmaceuticals (AQXP) at current price?

    Thanks,
    BP

  70. Richard – I am not following MEIP closely but their HDAC and PI3K programs appear undifferentiated. The cancer metabolism program is intriguing but the underlying biology is still unclear to me, in any case very different than bona-fide cancer metabolism agents like AGIO’s programs.

    JQ – Thanks for the info, I would suspect the NVS-ARRY includes richer terms.

    Dan – Sorry, don’t know IMDZ well. Wit hrespect to teh Ebola epidemic, this is a problematic indications for pharma/biotech companies as there is no “stable” market. Not to mention the fact that getting reimbursement could be tough.

    bp – AQXP is a name I am following but don’t have a concrete opinion, valuation looks cheap.

    Ohad

  71. Hi Ohad, what do you think about the targets and the deal terms of the EBS/Morphosys-deal?

  72. Chris – I have been following them when they were private but haven’t looked at the closely after the IPO. I Iike CGRP as a target (migraine) but the field is quite competitive, not optimistic about their IL6 mAb with BMS (it works but how will they take market share?).

    Christian – Good deal for Morphosys, they need to boost their proprietary pipeline. The target is an old one but this might be the right approach to tackle it (other antibody approaches don’t work that well). Market is significant but to date bsAbs demonstrated efficacy only in liquid tumors.

    Ohad

    Ohad

  73. I would appreciate your thoughts on the latest Rucaparib data released on Sep 28th.

    http://finance.yahoo.com/news/data-ongoing-phase-2-studies-070000191.html

    Data from Ongoing Phase 2 Studies of Rucaparib in Ovarian Cancer Demonstrate Safety and Clinical Activity, Validate Differentiated Strategy

    — Encouraging disease control rate of 93 percent, RECIST response rate of 71 percent observed in Phase 2 study of ovarian cancer patients with BRCA mutations; no drug discontinuations due to treatment-related adverse events

    — 56 percent of non-mutant BRCA patients in the ARIEL2 study to date exhibit HRD and may benefit from rucaparib treatment

    — Initial ARIEL2 clinical efficacy data to be presented in oral plenary session at 26th EORTC-NCI-AACR (ENA) Symposium on Molecular Targets and Cancer Therapeutics meeting in November.

    Also, AZN indicated that they will not be filing for AZD9291 until second half of 2015 and seem to be backing off their earlier aggressive Q1 2015 deadline.

    http://finance.yahoo.com/news/astrazeneca-sticks-h2-2015-timetable-141836248.html

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