ECC 2015 – Renal cancer showdown between BMS and Exelixis

The ECC/ESMO meeting, the European equivalent of ASCO, will take place next weekend. Historically, this event has received limited investor attention (since most of the important late stage stuff is reserved for ASCO) but in recent years its importance is growing as more practice-changing data are presented.  As a proof of this trend, this year’s meeting will include the two most important breakthroughs in renal cancer in almost a decade.

BMS (BMY) and Exelixis (EXEL) will present P3 data for Opdivo and cabozantinib (cabo), respectively, in 2nd line renal cancer. Although full details are not available, both agents are likely to become the first drugs to demonstrate a statistically significant survival benefit in the general renal cancer population.

The renal cancer field saw multiple drug approvals in the past decade (Sutent, Nexavar, Inlyta, Votrient, Afinitor, Avastin) but only one of these drugs (Sutent) demonstrated a survival benefit, which was almost statistically significant (p=0.051). All other agents were approved based on a PFS (progression-free survival) benefit and did not show a statistically significant survival advantage. Sutent is the market leader in the 1st line setting while the 2nd line is dominated by Afinitor and Inlyta (each generates ~400M a year in renal cancer).

The trials for Opdivo and cabo were similar in terms of patient population (2nd line) and comparator arm (Afinitor). The Opdivo trial had overall survival as the primary endpoint whereas cabo’s trial had PFS as the primary endpoint. BMS did not provide information beyond stating that Opdivo led to a statistically significant survival benefit. Exelixis provided top line results including a statistically significant PFS benefit and a strong survival trend at an interim analysis (needs to be validated at a later analysis in 2016). Neither company provided the actual median values of PFS and overall survival.

I expect both companies to present solid results that will make Opdivo and cabo commonly used drugs for pre-treated renal cancer. BMS and Exelixis issued their press release on the same day and investors automatically assumed Opdivo will become the dominant agent, as was evident from the muted reaction in Exelixis’ stock.

I feel comfortable owning Exelixis going into ECC because no matter how strong Opdivo’s results are, it is not curative and most patients will require additional treatment options. In addition, there is still a chance for cabo to demonstrate superior efficacy (based on cross-trial comparison) at the meeting. Beyond efficacy, Opdivo appears to be better tolerated whereas cabo has the advantage of being an oral drug.

Down the road, Opdivo (with or without Yervoy) is expected to move to first line, leaving the pre-treated market to kinase inhibitors. If cabo demonstrates a significant survival benefit (my guess is 7 months), it is likely to make a big dent in the $3.5B renal cancer market that is dominated by undifferentiated products that do not have a survival benefit in their label.

The next catalyst on Exelixis’ horizon is FDA approval around mid-2016 (the drug recently received breakthrough therapy designation), followed by approval in Europe. As I discussed last month, I don’t expect Exelixis to stay independent for long given the discrepancy between its market cap ($1.5B) and cabo’s commercial potential in renal cancer ($600M using conservative assumptions). This excludes the drug’s potential in additional indications (approved for MTC, P3 in liver cancer) and cobimetinib, Roche’s MEK inhibitor for which Exelixis has co-promotion rights in the US.

Other companies with interesting data at ECC

ArQule (ARQL) will present P1b data for its Akt inhibitor, ARQ092. The company already disclosed four responses (lymphoma, breast and endometrial cancer) in the first 20 patients. All responders had a mutation in the Akt-PI3K pathway, which bodes well for future development utilizing biomarkers for patient selection. Acknowledging the small numbers and preliminary results, these results appear better than what was observed with other Akt inhibitors and may suggest ARQ092 is a best-in-class molecule that can be pursued as monotherapy (other Akt inhibitors are being pursued in combination regimens). The data set at the meeting will obviously be limited in terms of follow-up and sample size but it will be interesting to see actual response rates per indication/mutation and whether responses are durable.

Incyte (INCY) will present updated results for its IDO inhibitor (epacadostat) in combination with Yervoy in melanoma. Response rate and PFS in the abstract continue to look numerically better than historical data with Yervoy but it is hard to ascribe this to the drug without a control arm. This trial is viewed as a proof of concept for IDO and future development will be done with a PD-1 antibody. Epacadostat is in combination trials with the leading PD-1 agents and initial data are expected at ASCO 2016. Incyte recently acquired rights for a PD-1 antibody, which creates a path for the company to have its own combination regimen.

Roche will present results from the BIRCH study, which evaluated its PD-L1 antibody (atezolizumab) in non-small cell lung cancer (NSCLC). According to Roche’s press release the single-arm trial demonstrated a correlation between PD-L1 expression and response rate, further validating its strategy of using PD-L1 as a predictive biomarker in NSCLC. While this corroborates results in other trials (especially BMS’ CheckMate-057 study and Roche’s POPLAR), it is still unclear what role PD-L1 status will have in NSCLC as activity appears similar to chemotherapy and the safety profile is significantly better.

Array (ARRY) will have several presentations for its MEK inhibitor, binimetinib. The most interesting trial is a combination study of binimetinib and Novartis’ (NVS) CDK4/6 inhibitor in NRAS melanoma. Array is evaluating binimetinib as single agent in P3 for this indication, with data expected this year. Even if the trial succeeds, the clinical benefit will likely be modest and combination regimens are urgently needed. MEK is becoming an increasingly attractive target in combination trials. At the meeting, Novartis will present updated results from COMBI-v which evaluated its BRAF+MEK combination in BRAF+ melanoma and demonstrated a 7.5 month survival benefit vs. BRAF monotherapy. In June, AstraZeneca (AZN) reported impressive results for selumetinib (licensed from Array) in a rare tumor type (neurofibromatosis 1). The most exciting indication for MEK inhibitors is KRAS+ NSCLC, especially in combination with PD-1 antibodies. This strategy is pursued by Roche (with Exelixis’ MEK inhibitor) and AstraZeneca (with selumetinib) and could be the driver for the acquisition of Array by one of the PD-1 players.

Lastly, privately-held Stemcentrx will present P1 results for rovalpituzumab tesirine, an antibody- drug conjugate targeting DLL3. The abstract is still not available (late breaking abstract) but based on the title this agent appears to have encouraging efficacy in small-cell lung cancer (SCLC).

Portfolio updates  

We are adding a third position in ArQule in anticipation of a positive readout at ECC. Next year, the company may be in potentially pivotal single-arm trials for ARQ092 (A biomarker defined tumor type and Proteus Syndrome) and ARQ087 (FGFR+ cholangiocarcinoma) which may have a dramatic impact on valuation given its low market cap ($120M).

Portfolio holdings – September 20, 2015  

PORTFOLIO - 20-9-2015 - after changesBiotech ETFs - 20-9-2015 

39 thoughts on “ECC 2015 – Renal cancer showdown between BMS and Exelixis

  1. GLPG – in the past you have been positive to GLPG, but since then the stock more than doubled. There are some positive developments since then though. RA JAK 1 data were great and they expect a decision from ABBV about partnership – max by Oct 2. Plus they just presented positive data for their CF potentiator. They are way behind VRTX but if they are well differentiated, they may get something from the huge market.
    Any thoughts about this company?

  2. Christian (QURE) – Yes I like their data because they show a sustainable enzymatic activity in patients’ CNS. This has important implications for other LSD diseases with CNS involvement. Numbers are small and administration is not trivial at all.

    Mcbio – Thanks, will keep track of that as well.

    Ohad

  3. hi again Ohad,

    IMGN quite weak… down on pretty high volume. i assume you have not heard about any news with their lead program?

    thanks!
    Christian

  4. Christian (IMGN) – I think their analyst event was very good, I guess people were disappointed by the fact no new data or flavor about the efficacy profile in the expansion ovarian cancer cohort. Also, the timelines to approval look longer than expected (3 years).
    I was impressed with the anetumab data in mesothelioma, it is hard not to be taken by the durable responses (2+ years) in 4 patients.

    Ohad

  5. hi James and Ohad,

    thanks!

    the Bayer/IMGN compound news is good for MorphoSys as well, mab is from them, ca. 5% royalties (though milestones negligible)

  6. Ohad,

    Have you revised your view of TGTX – “undifferentiated agents in a competitive market”? Data so far shows strong single agent & combo efficacy and markedly better safety profile than other CD20 or P13K agents.

    Thanks,
    Mike

  7. Ohad,
    What do you think about the Biotech selloff from the Hilary Clinton tweet? Seems completely ridiculous and a huge overreaction. Great buying opportunity here?

  8. Hi Ohad,

    According to the IMGN presentation, it looks like 2019 is when Mirv S. will hit the market as they said that it would be 3 years end to end for the FORWARD I trial instead of the initially anticipated 2017 roll-out if successful. This trial will enroll FR-alpha+ ovarian cancer patients and will have a first stage which is designed for additional dose finding as well as a second stage which is has an ORR endpoint but here it enrolls an additional control arm with the existing standard of care. Their meeting with the FDA will be 1H 2016 which seems later than they anticipated but this will come after their initial 40 patient cohort matures.

    Do you think they could receive breakthrough designation based on > 40% ORR and do you have any thoughts about the new trial design and timeline?(Until updated PI results, we might look forward to GATSBY results or BT-062 updates.)

  9. Ohad

    My class will be participating in a national competition where you trade $100,000 (fake cash of course) in the stock market. The goal is to have the most valuable portfolio in your region, about 1/4 of the nation. The top 25 people in the region move onto national competitions.

    I mainly invest in biotech. I focus on buying stock with upcoming catalyst I think will turn out positive and raise the share price. I did this with TRVN, I new about it’s pain medication P2 date and bought with the expectation of it getting approval. It did and shot up 70%.

    I really want some suggestions on what companies have upcoming catalyst like TRVN. I personally hold CYTK, but that is more of a long term position and will not make significant gains in the next 3 months.

    I really want to win and have the chance to go to a international competition, and it looks good on a collage application.

    I need to buy a minimum of 3 companies, maximum of 33% allocation. I hope to choose 3 winners and win the competition for my school. I know it is a long shot, hit or miss if you will, but I think that I can win this with a lot of research and some luck. Around $120,00 gets me to the competition and obviously more to come in first.

    So overall, I just want your opinion on some good catalyst dates with high stock moving potential, as well as good chances.

    I really do enjoy reading your posts, I learn tons of information with each one. Thanks for reading. And good luck to you.

    Justin

  10. Michael Goodman (TGTX) – I still haven’t changed my mind, the drugs are active but so far undifferentiated.

    sdarb – I think it’s about time US politicians do what every responsible country is already doing, which is regulating drug prices to some extent. Everybody understands that innovation should be generously rewarded but we mustn’t ignore pharmacoeconomic aspects.

    Wildbiftek (IMGN) – I think they could get breakthrough therapy designation but they will probably need the entire 40-patient cohort (providing they have a 40% response rate and reasonable durability).

    Justin – I try to avoid recommending specific stocks on a personal level and instead write about stocks I like. Of the stocks in my portfolio, meaningful (positive or negative) catalysts are expected for EXEL, ARRY and ESPR. Good luck with the competition.

    Ohad

  11. Hello Ohad

    what your opinion on IPI-549, (very early..)
    and do you know PrimeVax ? is it possible to buy their stocks?
    Thanks

    p.s
    would you get into imgn at those levels?

  12. hi Ohad,

    ARRY is back at the level where they announced the pretty phenomenal “deal” for the MEK and the BRAF with Novartis, which definitely was better than most expected.

    the deal with European partner hasn’t materialized yet, but at the last conference, CEO reiterated year-end (it sounded as still realistic, but who knows….).

    buying opportunity at USD 5.10 in your opinion? or to risky to have a big position?

    Thanks for your opinion,
    Christian

  13. Alex (INFI) – I am somewhat cautious about interpreting their preclinical data, especially the part about macrophage polarization and TAM infiltration. In general, the entire macrophage theme hasn’t been proven with more direct approaches (CSF1R), plus it is hard to conclude much from preclinical experiments in mice about activity in humans (vaccines are incredibly effective in mice). Sounds similar to the ibrutinib twist in solid tumors, intriguing preclinical data but relevance is unclear.
    Don’t know PrimeVax

    Re IMGN – I plan to keep my holdings, which is the same as getting in.

    Christian (ARRY) – Personally it’s tempting to add more here as I think they will eventually land a deal and I am more confident about MEK today than ever. Regardless, I wouldn’t allocate more than 7-8% of my portfolio to a company like ARRY given the inherent high risk. If the NRAS trial is negative and the stock crashes, I will probably add more.

    Ohad

  14. please comment on the comparison of Stemcentrx and DLL3 v. Oncomed and DLL4…..is the valuation discrepancy similar to your comparison of SAGE / MRNS? …or…..is the targeting approach more dissimilar than I assume it to be.

    Frank

  15. What you missed:

    NewLink Genetics (NLNK) has two recently released abstracts for IDO inhibitors that will be presented at the ESMO conference in Vienna at the end of September, 2015. A brief survey of these abstracts suggests that the data will be supportive of the company’s IDO pipeline. Given the relevancy of IDO in INCY’s MC, the data requires further scrutiny.

    One of the ESMO abstracts is data from the phase 1A study for GDC-0919 (Genentech partnered asset) in patients with recurrent/advanced solid tumors. The open-label, single center study has a 3+3 design and investigated the safety and tolerability of GDC-0919 at doses 50-800 mg BID on a 21 days-on/7 days-off schedule for up to 12 months. As of Mar 26 2015, 19 pts were treated and 3 remained active, while 16 patients discontinued due to progressive disease.
    Notably, among 16 patients with tumor assessments there were 7 stable diseases (44%) (lasting >4 cycles in 4 pts, or 25%) by RECIST.

    This appears to be at least comparable to, if not greater than, INCY’s PI data for epacadostat (INCB024360) which showed stable disease rates of 29% lasting >8 weeks and 15% lasting >16 weeks (ASCO 2013). As far as safety is concerned, no maximum tolerable dose has been reached to date, though there was one patient with lower gastrointestinal hemorrhage at the 800 mg dose in a 69-yr old male who already had extensive gastrointestinal serosal metastasis. Adverse events reported in >4 patients included fatigue (47%), cough, decreased appetite, and nausea (42% each), pruritis (37%) and vomiting (32%).

    NewLink Genetics will also present at ESMO 2015 data from a phase 1B trial evaluating the combination of indoximod (wholly owned NLNK asset) plus ipilimumab for treatment of unresectable stage III/IV melanoma in which two dose levels of indoximod (600 mg /1200 mg). The ESMO abstract discloses 9 patients that were treated, of which 7 continue to be followed with 2 patients observing progressive disease.

    The abstract does not disclose response rates for the 7 patients that were on study as of April 2015. The trial reports one grade 3 colitis, which is likely related to ipilimumab and a 56% rate of fatigue, 44% incidence of rash, 33% incidence of pruritus, and 33% incidence of diarrhea. Each of these adverse events has been associated with Yervoy per its prescribing label.

    As a point of reference, the MOS with ipilimumab alone in stage III/IV melanoma is 10.1 months. Recently it has been reported that progression-free survival among patients with advanced melanoma who had not previously received treatment were significantly greater with nivolumab combined with ipilimumab than with ipilimumab monotherapy. In the indoximod/ ipilimumab trial, given most of the patients would have likely been in trial for at least 12 months, 7/9 patients still alive appears to be very encouraging and more in line with the nivolumab/ipilimumab combination therapy.

  16. EXEL Can you speculate on the hazard ratio for Opdivo given the patient population of 821 patients ? The delay in their getting of the Breakthrough designation could that be due to sub-population analysis for PD-1 expressing patients. Lastly, would patients who progress on Opdivo start a TKI afterwards right away. Patients who receive Cabozantinib after Opdivo might actually get the benefit of both the immune response mechanism of Opdivo without receiving the drug concurrently when they are on Cabozantinib after Opdivo due to the immune response period from Opdivo. Do think the progression free survival might actually increase with Opdivo/Cabo sequencing, and also the overall survival or do you anticipate some portion of patients taking Cabozantinib first rather than Opdivo as 2nd line treatment mechanism for RCC.

  17. Hello Ohad,

    always read your recommendations fom the sidelines – thx for the time you´re investing here…

    TCON had good news a few days before and as a low flowter pps went up from 12 to 18 – now back @12 again. They have some interesting trials and a mcap around 150mio. In a peer group that seems undervalued and they could be picked up by a bigger company every day.

    What´s your opinion to this company – you have TCON on your radar? Would like to buy a starter position these days – so I´m very interested to your opinion.

    Thanks Mick

  18. Frank (OMED) – I don’t view the two programs as direct competitors not only because they hit different targets (in the same family/pathway) but also because OMED’s DLL4 antibody is designed to target “cancer stem cells” whereas Stemcentrx are using DLL3 as a target in order to deliver a toxic payload to tumors cells that express it on their surface.

    Grant (NLNK/INCY) – Very hard to interpret disease stabilization in a small study without a control arm imo.

    curiousgeorge (EXEL) – My guess (which is as good as anyone else’s guess…) is a HR of ~0.6. I don’t think we can attribute the delay in getting BTD to anything in the data set (BTD was for all patients, not just PD-L1 positive). I believe that if both drugs are approved for 2nd line RCC they will be used sequentially given the significant survival benefit. My working hypothesis is that Opdivo will be given before cabo due to its safety profile and stronger survival benefit (we still don’t know how the data actually look).

    Chris (CNAT) – Waiting to hear the conference call today. Hard to interpret the data so far.

    Mick (TCON) – Yes I have been following TCON since their IPO. Although the two CRs they reported in sarcomas are intriguing, it is hard to figure out whether their drug had a major contribution because patients were also treated with Avastin. I continue to site on the sidelines.

    Ohad

  19. ohad

    what is you general feeling regarding valuations in biotechs in general.You had previously thought that there would be a 25% correction in biotechs.A couple more days like we have seen over the last couple days and the IBB index would be close to your call.Have your feelings changed in terms of how low we may go or are you comfortable with you previous perspective.

  20. EXEL Can cabozantinib be given as a second line treatment without any further clinical trails post Opdivo since the currently accepted sequence is TKI-mTor ?
    because as the FDA put it:
    U.S. Food & Drug Administration (FDA) has granted Breakthrough Therapy Designation to cabozantinib, Exelixis’ lead compound, as a potential treatment for patients with advanced renal cell carcinoma (RCC) who have received one prior therapy
    How do you anticipate the timing of Opdivo or other check point inhibitors for that matter going first line in RCC and Cabo as a second line treatment ? Cabo can go first line as well for patients that do not respond to Opdivo. Are there any biomarker approaches to determining which patients will respond to Cabo versus Opdivo ?

  21. Hi Ohad,

    What is your opinion on emricasan and CNAT ?
    I am more and more impressed with the clinical outcome efficacy/safety of the product.
    Caspase inhibitor are part of a complex space and little known clinically.
    The safety fears have pushed BP to stop their program despite a major interest for liver disease (GS-9450…). And so far, IDN-6556 “emricasan” confirms interest regarding efficacy/liver-disease with good safety profile.

    Thanks for share your opinion.

  22. dave – I still think the market needs to go lower, especially the biotech segment which had an unprecedented rally over the last 3-4 years. Therefore, I don’t plan to increase my exposure to biotech over the next 6-12 months (but I still plan to selectively own stocks with catalysts).

    curiousgeorge (EXEL) – These are good questions. I think cabo will be commonly used as a 3rd line treatment (post Sutent and PD-1) even though the label will include a general definition of pre-treated RCC. The most straighforward biomarker approach may be PD-L1 status although it is still unclear how this strateification affects clinical outcome with Opdivo.

    tedy (CNAT) – I agree with you regarding emricasan’s safety profile which appears to be surprisingly good. Still not sure about how to interpret the efficacy signal, which is there but a lot of confounding elements in the data set.

    Ohad

  23. Ohad,

    Do you follow Arrowhead Research (ARWR) at all? With their impressive results in Ph2 HBV trial, they could be a potential acquisition for GILD. Any opinion on ARWR?

    Thank you so much for your insight, it is appreciated.

  24. EXEL Cabo seems to have an objective response rate of 90% in phase 2 for RCC while Opdivo generally has a 20% objective response rate. This shows that not all patients will be directed to Opdivo first as 2nd line RCC treatment. The question left is how do you determine which patients to direct to Cabo and most likely 80 percent of patients will be on Cabo as 2nd line RCC first versus Opdivo due to the ORR rate Why would a doctor want to start a patient on Opdivo if it won’t work for the patients profile ?

  25. EXEL
    In 5.5 months that Opdivo was administered it had a total, 207 of the 406 patients treated with nivolumab (51%) had dose delays.

    The dose delays mean less revenue for BMY because no drug is being administered compared to dose reductions for Cabozantinib meaning the drug is still being bought generating revenue at a lower dose.

    HR for Opdivo had some odd balls too:
    19/34 patients of age above 75 had an HR of 1.23 and the HR in Western Europe was .86.

    HR was .89 for patients with 2 or more prior treatments 55/116 patients for Opdivo. Most likely Cabo’s HR for patients with 2 or more treatments will be far better than Opdivo because at this point the immune system is not working very well so an immune based drug would have less efficacy.

    Cabo trial had more patients with 2 or more pretreatments and had a better HR than Opdivo.

    Hazard ratio’s of Cabo of .67 and .73 for Opdivo
    60 % dose reduction of Cabo versus 51% of dose delays in Opdivo

    I would say that Cabozantinib did pretty well to match up with Opdivo.

    What do you think ?

  26. Hi Ohad,

    I see you added another position in ARQL in anticipation of the ECC presentation. According to their abstract (Nr. 338), 96 patients have been treated with ARQ 092 as of 31 March 2015. Two subjects (lymphoma and endometrial) experienced a durable partial response and both had activating mutations in the PIK3CA gene. In addition, 31 subjects had stable disease including 4 (13%) who had a >10% tumor reduction and 16 (52%) who remained on treatment for ≥16 weeks.

    What’s your take on the results? Two responses out of 96 (previously it was 4 out of 20) seems a little underwhelming. 30% stable is not bad I believe but I wonder about the 50% who drop out by 16 weeks. Thanks as always for your insights!

    Deaglan

  27. EXEL Listening to the webcast, Cabo has better PD data than Nivo and Everolimus, and 9.1 PFS in post Sunitinib, and ORR was measured by an independent body versus Nivo’s Objective Response Rate measured by investigators for Nivo. Investigator data tends to be biased to the drug they are studying.
    Nivo study did not report all adverse events while the Cabo study reported both treatment related and non treatment related adverse events to the independent body hence the discrepancy. Cabo was very close came really close to meeting OS they had HR=.67 and .645 would have made it.

    Need to look at all facts with the same lens to find the right meaning especially the way PD, ORR, and Adverse events were recorded and reported.

  28. Ohad
    EPZM data in INI1-negative subset look solid. It is early but promising.
    Any thoughts about this company?

  29. Shane (ARWR) – I am following them and agree they clearly have activity but at the current valuation and timelines I prefer to wait. In contrast to the case in HCV, the clinically relevant (and approvable) endpoints are not yet fully figured out.

    curiousgeorge (EXEL) – I will try to publish something later today. Overall the data look very good imo and although Opdivo overshadowed cabo, the latter will become an important 3rd line RCC drug with a significant market opportunity.

    Deaglan (ARQL) – The abstract predominantly includes the P1 dose escalation portion, which enrolled allcomers at various doses with a low response rate. The 20 patients I was referring to are from the expansion cohorts which recruited predominantly biomarker-positive patients.

    andre (EPZM) – Still didn’t listen to the webcast but results are very preliminary to valisdate their patient selection hypothesis.

    Ohad

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