Exelixis – Down but not out, plenty of catalysts in 2014

Last week, Exelixis (EXEL) lost 47% after announcing the COMET-1 trial was not stopped for efficacy at the interim analysis. The reaction implies investors were expecting a positive outcome based on experience with other prostate cancer phase III trials that had been stopped early due to efficacy. These include Medivation’s (MDVN) Xtandi and Bayer’s Xofigo.

Even after the disappointing announcement, I still think Exelixis has significant upside potential for 2 reasons:

1)   There is still a possibility for a positive surprise in COMET-1 based on at least 1 precedent for a prostate cancer drug that did not “pass” the interim but eventually demonstrated a survival benefit.

2)  Excluding the prostate cancer opportunity, Exelixis has multiple near-term, low risk value creation events.

Xofigo and Jevtana as precedents

Going into COMET-1’s interim analysis, investors relied on experience with other prostate cancer drugs, which demonstrated a survival benefit already at the interim. A comparison to Xofigo’s phase III appeared the most relevant as both drugs target bone metastases with similar statistical assumptions and trial sizes. Xofigo’s interim analysis demonstrated a highly statistically significant survival benefit of 2.8 months based on 320 events. Exelixis’ cabozantinib, on the other hand, did not pass the statistical hurdle despite a higher number of events (387 events). Importantly, it is unclear whether there was even a trend favoring cabozantinib.

Failing to hit the primary endpoint at the interim analysis is clearly disappointing and implies that cabo’s benefit is not spectacular. However, there is one recent example of a prostate cancer drug that demonstrated a survival benefit despite not meeting the primary endpoint at the interim analysis.

Sanofi’s (SNY) Jevtana was approved in 2010 after demonstrating a 2.4 month survival benefit with a HR of 0.7. Jevtana’s phase III trial (TROPIC) included an interim analysis after 365 events, which did not demonstrate sufficient benefit for stopping the trial early. Sanofi had to wait until the final analysis (513 events) in order to meet the primary endpoint. From a hazard ratio perspective, Jevtana’s benefit was identical to that of Xofigo. Therefore, despite the low likelihood of success, cabozantinib might still demonstrate a statistically significant and clinically meaningful survival benefit at the final analysis.

Xofigo, Jevtana, cabozantinib

Exelixis has value beyond prostate cancer

Exelixis’ current market cap ($660M) represents a very low likelihood of success in prostate cancer. Even if one assumes COMET-1 fails, Exelixis has multiple assets beyond prostate cancer.

Cabozantinib for MTC ($60M peak sales)

Cabozantinib was launched in 2012 for medullary thyroid cancer (MTC), a niche indication. The drug had US sales of $14M in 2013, its first full year on the market. Approval in MTC was based on a remarkable improvement in PFS (11.2 vs. 4 months, HR=0.28) without a survival benefit. Subsequent analysis showed that the effect is driven almost exclusively from patients with RET+ tumors, who represent ~50% of cases. This is not reflected in the FDA label but the recent approval decision in Europe noted this differential activity profile.

Updated survival data this year may fail to show a statistically significant difference in the overall population but the drug could demonstrate a positive signal in RET+ tumors. Although such signal may not reach the label, it should increase market adoption in RET+ MTC.

Assuming moderate growth and a similar opportunity ex-US, peak sales for cabozantinib in MTC should reach $60M a year.

Cobimetinib ($150M peak revenues in BRAF+ melanoma)

Cobimetinib (MEK inhibitor partnered with Roche) remains the only meaningful program in Exelixis’ partnered pipeline. The drug is in a phase III evaluating cobimetinib when added to Roche’s BRAF inhibitor, Zelboraf, in BRAF+ melanoma. Based on good phase I results and positive p3 data for a similar combination from GSK (GSK), probability of success is high. Top line results are expected in the coming months.

Exelixis has co-promotion rights in the US (30-50% of profit depending on sales) and is eligible for royalties in ex-US territories. Cobimetinib’s commercial potential can be approximated based on Zelboraf’s performance, which brought ~$500M in 2013, half of which in the US. This translates to a conservative assessment of $150M in total revenues for Exelixis (assuming intensified competition and minimal growth).

Roche is evaluating cobimetinib in several other trials, including a combination trial for cobimetinib with its PD-L1 antibody. Any positive indication that ties cobimetinib to a PD-L1 regimen could have a dramatic effect on the drug’s market potential.    

Cabozantinib for RET+ NSCLC ($80M peak sales)  

Exelixis is expected to launch a phase II pivotal trial for cabozantinib in non-small cell lung cancer (NSCLC) patients with RET-mutations. RET mutations in NSCLC have been recently discovered and they occur in 0.5-0.7% of NSCLC (~1000 cases in the US). Several RET inhibitors are being tested in this rare tumor type, with Cabozantinib being the most advanced. At last year’s ASCO, investigators presented promising preliminary efficacy (discussed here). Updated results may be available in 2014, which (if positive) should increase confidence in the upcoming pivotal trial.

RET+ NSCLC represents a commercial opportunity of $300M-$400M globally. Cabozantinib can generate $80M given its first mover advantage.

Additional tumor subsets with RET fusions may emerge, further expanding RET inhibtors’ market opportunity. For example, a recent paper describes a previously undescribed RET fusion in secondary AML which appears to be an oncogenic driver.  

Cabozantinib in additional indications (pipeline value of $200M)

Cabozantinib is in phase III for renal and liver cancer, with top line results expected in 2015 and 2016, respectively. Although there is no robust randomized data for the drug in these indications, it is clearly active, especially in heavily pretreated RCC patients (discussed here). In addition, cabozantinib is in tens of active trials (most are NCI or investigator sponsored) across many tumor types. Some studies are 1-2 years into enrollment and could have data in 2014. A program in 2 phase III trials and 20+ phase II studies of can be (very) conservatively valued at $200M.

Summary

Combining the near term opportunities in Exelixis’ pipeline leads to annual revenues of $290M: Cabozantinib in MTC ($60M), Cabozantinib in RET+ lung cancer ($80M) and cobimetinib for melanoma ($150M). Importantly, these assumptions include only low hanging fruit, high-probability opportunities and factor in significant competition. Applying a sales multiple of 5 and discounting 4 years with a discount rate of 15% results in a valuation of $830M. Adding $200M for cabozantinib’s additional indications brings valuation to just over $1B in net present value, assuming the prostate cancer program fails.

Portfolio updates

We are adding another position (4th) in Exelixis in anticipation of positive results for cobimetinib and cabozantinib in melanoma and RET+ lung cancer, respectively.

Portfolio holdings – March 30th, 2014

biotech portfolio - Mar 30th 2014biotech etfs - Mar 30th 2014

 

89 thoughts on “Exelixis – Down but not out, plenty of catalysts in 2014

  1. I wonder if more dose tinkering needs to be done with cabo?

    Also, Is the p3 rcc based solely on pfs primary?
    …I see this as a potential best case indication for cabo…. i am adding and holding….for cobi and rcc

  2. Ohad
    any thought about ECYT following the positive results from the phase IIb study of vintafolide in NSCLCr.
    thanks–andre–

  3. Robert – Looks like the 60mg dose has the optimal therapeutic window, especially for indications with long PFS such as RCC. It’s also encouraging that the IDMC didn’t stop COMET-1 or required dose reduction based on safety events.
    In RCC, a drug can be approved solely based on PFS providing OS is not inferior. Agree, cabo’s p2 data were very strong, looks much more than another VEGFR inhibitor but the trial was small.

    Alex – sorry, not following DCTH.

    Ohad

  4. Andre – Both were complete surprises to me, I predicted the EMA would wait and the NSCLC p2 will fail. Will be interesting to see their data.
    I am still concerned about their drugs given the very short half life and potential competition from IMGN’s anti-FR, which has single agent activity.

    Ohad

  5. Well written article, so if COMET-1 fails does COMET-2 still have value if successful for pain relief? Also any idea when the final analysis of COMET-1 would be released (June, July) ?

  6. Ohad:
    Agree with your opinions on Endocyte,the data in their slides on ADC Frankfurt is good,but compared to IMGN853,the short half life indicated a weak position in competition. EXEL is profitable with such a low price now.
    Thanks a lot for your sharing.

  7. Clay – Thanks. COMET-2 has pain relief as 1ry endpoint so based on my understanding that’s possible but only is survival is non-inferior. If cabo has no survival benefit the control arm (Mitoxantrone +Prednisone) might be superior. People expect final analysis in the Sep/Oct time frame.

    Zeng – My assumption is that whatever vitafolide can do, IMGN853 can do better. Still, this is only a hypothesis that needs experimental validation. A positive p3 outcome in ECYT’s P3 in ovarian cancer (which I still bet against) should give them a head start.

    Ohad

  8. Hi Ohad,

    1. What do you make of NICE rejecting Xofigo on cost effectiveness. From what i read they want to see more head to head data with Zytiga or Xtandi. Seems odd to me give how the Ph3 turned out.

    2. Any plans for AACR14 preview?

    Thanks
    James

  9. James –

    1. I also find it odd since most patients will reach Xofigo after failing Xtandi or Zytiga. Perhaps they are just trying to convince Bayer to cut the price.

    2. Not sure I will be able to publish anything. I reviewed the abstracts and marked the ones I find interesting for internal needs but didn’t prepare anything that is oriented towards publicly traded companies.

    Ohad

  10. Hi Ohad, you say that people were worried about CO-1686’s QTc signal. Is that a real and serious risk in this development program? Or is it a panic in the stock market only? I think we have a high probability of approval. Is that wrong? Has the QT-problem changed something important?

    Thanks,
    Hubert

  11. Hubert – QTc prolongation is an issue that makes everybody nervous (especially regulators). I think it’s a concern but given the drug’s remarkable efficacy and the extent of phenomenon it is unlikely to prevent CO1686 from reaching the market. The important question is how will the drug’s safety/efficacy profile compare to that of AZD9291.

    Ohad

  12. Ohad I still see foretinib making a push forward…do u what makes this compound different from cabozantinib….any advantages of one over the other…I assume there must be otherwise why would EXEL of pushed both through to clinic…I think I read foretinib going for nsclc also…

  13. Robert – You are right! it appears GSK plans a new study in NSCLC as monotherapy in biomarker defined populations or in combination with Tarceva.

    http://www.clinicaltrials.gov/ct2/show/NCT02034097

    This is very surprising given GSK’s complete lack of interest over the past 3 years.
    The 2 drugs overlap on several of their targets (VEGFR2, MET, KIT) but they differ on RON (inhibited by foretinib) and RET (inhibited by cabo).

    Ohad

  14. Foretinib def. has value…toxicity it crushes renal papillary cancer, but I guess the indication is too small…my only issues with compounds like these is the potential toxicity skewing OS data

  15. Please void ‘toxicity’ in the first line of previous paragraph….fat fingers

  16. Hey Ohad
    INFI is at a new low… valuation is just above $500M.
    With a phase 3 drug that is promising. How should we play it and at what point or juncture would you add more shares?
    Thanks
    Dan

  17. A tweet by Tom Silver indicated that post Abiraterone PC population achieved a median of 7.9 months of survival on Enzalutamide; compare that to 10.8 months median survival with Cabozantinib for a somewhat different population.

    A possible reason COMET-1 may not achieve stat-sig is due to the behavior of the placebo group. VEGFR inhibitors have tell-tale signs and any patient doing his homework knows whether he is in the drug group or the placebo group, and I will assume patients in the placebo group will seek additional treatments at a greater rate. Now that Radium-223 is approved and ramping up, I wouldn’t be surprised if many placebo group patients survive longer than the expected 7 months.

  18. Robert – It definitely has more value now because it is back in development. GSK might be going after other niche indications beyond pRCC. 2 relevant biomarkers in NSCLC inhibited by foretinib are Met and Axl.

    Dan – I am actually less optimistic about INFI following Imbruvica’s launch numbers which are much lower than I expected. The p2 in asthma/RA are the next catalysts.

    wildbiftek – There are a lot of possible explanations for why drugs fail but usually the most relevant one is lack of efficacy. Note that Xofigo is still not commonly used in the US and is approved only in patients without soft tissue mets.

    Ohad

  19. Is it good time to add more ARRY now. When will be the next catalyst for ARRY come?

  20. Hello Ohad,

    interesting that the European Biotechs like Morphosys, Ablynx, Evotec, Genmab and Galapagos had within the last weeks a better performance than the Americans. I think it’s the first time! Like Ruhulla I’m interesting in your opinion about ARRY at the present pps. And what about RGLS? They have a very early pipeline but great partnerships. They lost much value within the last days.
    Thanks.
    Toby

  21. Arry is a great price….the mek they have with novartis offers strong royalities…novartis is very high on mek162 and believes it is best in class…I have personally read of specific patients that have responed well to this compound…but as always, do your own dd

  22. Ruhulla – ARRY is expected to have multiple data readouts in 2014. These include p2 data for 520 in myeloma ( mono/ combo and AAG+/-), ARRY-380 in breast cancer and MEK162 in NRAS+ melanoma. All these events are expected at year-end so I would not add more at this point, especially in light of current market dynamics.

    Toby – Agree about EU biotechs weathering the storm better, I guess they were less inflated to begin with.
    Re: RGLS – Similarly to other technology names with promising technologies and an impressive partner list, I still think it’s too expensive (300M) given the development stage and lack of clinical proof of concept.

    Ohad

  23. Ohad
    AGIO just published the 221 data. They look good – 3/7 CR, 2/7 CRp and 1/7 PR. They have collaboration with CELG and with FMI to detect IDH2-mutants. What do you think about these results? Do they justify a potential investment in AGIO after the bio market stabilizes.
    thanks — andre–

  24. Good point Ohad about market conditions…the wait and see is probably best….but at these prices it sure is tempting

  25. andre – Very impressive, far exceeding expectations. This is a great validation for AGIO’s approach and for cancer metabolism in general. Well done!

    Ohad

  26. Ohad
    key for the success is the companion diagnostics to detect the corresponding cancer metabolism. It looks that the role of FMI will rise with such success stories, like the AGIO’s. What do you think is a good entry point for FMI? Currently they have $800M cap.
    thanks — andre–

  27. Agree. In some way, FMI should be viewed as a way to get diversified exposure to the precision medicine story in oncology. It is very likely that FoundationOne or similar products will serve as the preferred companion diagnostics for most of the new targeted therapies (AGIO, EPZM, CLVS etc.).

    Ohad

  28. From what I understand no because there is limited overlap between FLT3+ and IDH2+ patients. In AGIO’s study, there was only 1 patient with FLT3-ITD.

    Ohad

  29. Hi Ohad,

    Amid this latest biotech sell-off, are there any earlier stage companies whose valuations have come down enough to be attractive? I’m thinking mainly of platform type companies similar to Agios. EPZM or MGNX?

    Thanks,
    sherk

  30. My 3 favorites are FMI, AGIO and BLUE. Will wait for a more attractive entry point. EPZM and MGNX are still too expensive imo given the lack of clinical proof of concept.

    Ohad

  31. Thanks, Ohad. Oh, one more name that I don’t remember being discussed – FPRX. Market cap of less than 350M and just did a IO deal with BMY recently. What do you think of their platform?

  32. Have to disagree on FPRX valuation Ohad. Full disclosure: I am now long. Not only do you get the FGF-trap program, they also seem to be a legit immuno onc player now. BMY deal provides good validation on this front. Also, they only state it as RA asset on web site but CSF1R program may have utility in immuno onc as well. I will look to add in future if valuation stays here.

  33. Mcbio – It’s hard for me to assess their immuno-oncology programs, which are probably early. The CSF1R antibody is looks good and it takes some courage to pick RA as a lead indication. I haven’t seen a lot of data re characteriation of this antibody as a way to deplete MDSC for cancer (similar to Roche’s CSF1R mAb). Agree it’s a promising approach, though.

    Ohad

  34. Ohad, have you ever looked at AGEN? Recently hired Dr. Robert Stein as CSO

  35. Ohad
    do you follow Aquinox? They are targeting SHIP1 in the PI3K pathway. Twp Ph 2 – in COPD and in BPS/IC. Pfizer and Baker Bros have 12% holdings in the company. Also J&J is a lead investor. A vote of confidence for their technology?
    –andre–

  36. Hey Ohad
    regarding immuno-onco companies
    have you looked at HTBX… valuation is $35M
    the technology seems interesting as it can work in combination and is applicable broadly
    Thanks
    Dan

  37. Hi Ohad,

    Genmab is down sharply. Do you see any particular reason or is this due to overall market selloff?
    You sold 2 positions in CLDX. I’m curious if you plan to add a position at these levels?
    Do you consider FMI and BLUE as good entry points or would you wait for this painful correction to end? :-(
    Thanks as always,
    Chris

  38. andre – Looks like another way to curb the PI3K pathway, selectively in immune cells. I wonder how that is different from isoform selective PI3K inhibitors. Market cap is low for a p2 company though.

    Dan – Looked at their data before the IPO and wasn’t impressed. Thanks for your wishes.

    Chris – Re: Genmab, I am not aware of a specific issue. Perhaps the realization that daratumumab will face competition from other CD38 antibodies? Don’t plan to add CLDX even at these levels, markets are likely to continue to be choppy imo.
    FMI and BLUE start to look interesting but I prefer to wait for a month or 2.

    Alex65 – AMBI puzzles me the most, can’t explain the ridiculous market cap for a drug with clear activity and a biomarker defined population.

    Christian – They had 70 mil at YE 2013 and a market cap of $115M although they’ll consume all the money for their p3. If I were a pharma/biotech company I would acquire AMBI for $200M, and use their cash to fund the p3 + other small studies.

    Ohad

  39. Ohad, taking a closer look at AMBI down here. I have heard some say there are resistance mechanisms to FLT3 so just targeting that may be insufficient. (I own shares in Selvita and they are developing an early stage dual FLT3/PIM inhibitor.) Any thoughts on whether targeting FLT3 alone will be sufficient? I guess as long as AMBI drug outperforms the control arm in Phase 3, that’s all that really matters in the near-term for AMBI and its share price. Though, sounds like there may be ways to potentially improve upon sole FLT3 inhibitors in the future. Also, when are we supposed to get the first data on CSF1R inhibitors in the clinic from big pharma (hoping that validates what AMBI doing here)?

  40. Hi Ohad

    Very enlightening review of exelixis. Also very spot on analysis.
    In the past you gave the Comet trials a 30% chance of success. I was wondering if you still feel the same way after the interim analysis and how did you handicap the 30% odds of success. Wall street seemed to be predicting a much higher likelihood given the sharp drop recently.
    thanks

  41. Hello Ohad,

    ImmunoGen (IMGN) is down 30% from its high in july. What are your thoughts about IMGN, regarding Kadcyla sales, the pipeline and as a addition to the Genmab ADC & MM-pipeline?

    Thank you for your thoughts!

  42. mcbio – Resistance mechanisms exist for all inhibitors but as you wrote, the main goal is providing a clinically meaningful benefit to patients. In AML, effective treatments can provide opportunity for a cure in a minority of patients. I also have high expectations from Flt3 inhibitors in combination with chemo or as maintenance after induction/transplant.

    Roland – Thanks. imo likelihood of success is lower now, probably 10-15%. Even you assume 0% probability of p3 success, cabo has many shots on goal.

    Martin – IMGN is one of the top stocks on my watch list and I feel more ready to get back to the stock after selling at $15. The market prices reasonable Kadcyla sales and their pipeline is early but exciting.

    Ohad

  43. re: AMBI

    Ohad, a biotech analyst that I read said that AMBI’s response rates in AML were good, but the durability of response sucked. How would you respond to that?

  44. Ohad, could you please refer to the company that you are talking about in your responses.? It’s sometimes hard to know exactly what company you are talking about without having to go back and check the earlier postings.

    Thank you.

  45. Ohad
    you wrote that IMGN is one of the top stocks on your watch list. What else is in this list?
    thanks –andre–

  46. Richard – AMBI’s durability of response was indeed short, which might also be due to patients going on transplant. I still think the drug has potential even as monotherapy given the very poor prognosis for refractory/relapsed AML and more importantly in some patients a short response could be enough to allow an allogeneic transplant (potentially curative).
    Even if quizartinib is not potent enough as monotherapy, it can eventally be utilized in combination with chemo or as maintenance after chemo/transplant.

    andre – Stocks on my watch list are AGIO, FMI, IMGN, BLUE, XNPT

    Ohad

  47. Great watch list, Ohad. I already picked up IMGN and XNPT during recent big selloff, FMI and BLUE are getting close to my range.

  48. hi Ohad

    have u ever looked at Xencor (xncr)?

    seems interesting if still gets a little cheaper

  49. Hello Ohad
    what do you think about CO-1686 results? and would you consider adding clvs at those levels?

    thanks
    Alex

  50. JQ – Re: FMI, I believe the focus on their commercial performance rather than their huge potential could create a better entry point this year.

    Christian – Yes I am following XNCR (an antibody platform after all… :]). Their early stage programs and collaborations are impressive but I am not too excited about their CD19 programs (AMGN & MOR, respectively). I still don’t know how much value to ascribe to the bio-better anti-IgE which should have PD data this year. Bottom line, it’s a stock worth watching but too expensive for this stage imo.

    Alex – I am bullish on both CLVS and Genmab at these levels. Don’t have plans to add a 3rd position in Genmab but considering adding more CLVS.

    Ohad

  51. Hey Ohad,
    what are your thoughts about the GsK – Novartis Deal?
    You see a negative impact on ARRYs MEK162?
    Thanks for sharing your thoughts…Ike

  52. Ohad,

    You mentioned XNPT. What’s the excited stories about it? I thought it was not an oncology company.

    Thanks,
    Cloud

  53. ohad
    NVS acquired GSK oncology drugs. Any thoughts on ARRY and Genmab?
    Strange reaction ARRY is down, Genmab – up?!?
    thanks –andre–

  54. Andre, not strange at all. ARRY is down because GSK has an approved MEKi that directly competes against ARRY’s MEK162 – would be interesting to see what NVS does with duplicate MEKs and BRAFs. Genmab is up because Arzerra goes to a better oncology company in NVS.

  55. Ohad, on FMI, aren’t diagnostic companies wildly difficult to invest in? Just seems like much lower barriers to entry than typical drug development companies, which is all I invest in, and an extremely competitive segment. Not sure what separates FMI from everyone else.

    On XNPT, I realize XP23829 is the clear potential value driver. In looking at recent PRs, they seemed to change language from developing going forward in psoriasis AND MS to psoriasis AND/OR MS. Pretty significant change IMO. If there is an issue with, say, MS, can psoriasis alone support substantial upside potential here?

  56. Hey Ohad,

    I lately found swedish based BioInvent. The stock looks very cheap on the first view. Do you know something about them?

    Thanks for your opinion!

  57. hi Ohad,

    big question: what is MEK-162 worth in ARRY’s hands?

    I think it is not unrealistic that NOV will return the rights to ARRY. but what can ARRY do with it. The ongoing clinical combo trials would probably be finished (see also their press release). but afterwards??

    ARRY marketing by themselves – don’t think ARRY is prepared for that, plus costs would be high for combo if half of it comes from NOV

    ARRY licensing to somebody else – I assume interest for MEK-inhibitors is there, but again what about combos? will other party have access to NOV inhibitors used in the combo trials – at what costs…?

  58. AZD9291 received BTD. Guess that could be advantage for AZN now but on the other hand makes BTD for CLVS CO-1686 more likely?

  59. anybody knows Sorrento Therapeutics? (SRNE)

    active in some popular fields like pd1 mab, GPCR mabs, ADCs…. (but all early)

  60. Ike – Teh NVS/GSK deal is one of the most creative ones I recall. Re ARRY, the press release they issued about NVS;’ commitment is reassuring but going forward there might be conflicts between MEK162 and GSK’s Mekinist. From a practical standpoint, NVS don’t want to lose time and replace MEK162 with Mekinist in the ongoing trials. My personal impression is that MEK162 has a better clinical profile due to better therapeutic window and dosing flexibility.

    Cloud – XNPT is not an oncology company but their drug looks too similar to Tecfidera to ignore imo. I need to re assess XNPT as some claimed that their p1 generated a troubling safety signal (lymphocyte reduction)

    Andre – Agree with JQ Genmab responded positively because NVS is expected to do a better marketing job for Arzerra given their experience and strong sales force in hematology.

    mcbio – FMI will surely deal with competition but their technology and head start should keep them in the lead. Eventually someone like Abbott or Labcorp will have to buy them imo.

    Re: XNPT, if psoriasis data are positive I can’t imagine them not pursuing MS but will look into their recent prs.

    Ohad

  61. Ohad, any opinion on BIND. It has gotten remarkably cheap, as has AMBI and many others.

  62. Martin – Overall Bioinvent seems to have good basic antibody technologies but their pipeline is a little bit early and the lead program (ICAM1 mAb) doesn’t look promising compared to other myeloma abs (e.g daratumumab).

    They do have some interesting targets but not yet in the clinic. The CD32B program is an interesting approach (the only one that tries to block this Fcg receptor). CD40 has been out there for years but recently generated intriguing results with respect to macrophage activation.

    Christian – That’s a very good question. On the one hand if NVS returns MEK162 to ARRY, the latter will have a wholly owned p3 oncology asset with multiple ongoing trials. On the other, the field is very competitive and any delay could be meaningful.

    Ike – imo the fact AZD9291 got BTD is a positive to CLVS. Their drug is at least as effective as AZD9291.

    Richard – Re BIND, I am getting asked a lot about it. Agree it is getting cheap but I am still skeptical as to their chances of their lead program being superior to Taxotere based on available data. Therefore, until I see more proof in the form of randomized data or a method for patient selection based on PSMA expression (they presented preliminary results at AACR), I prefer waiting. Their partnered program are much more interesting because they involve novel drugs and mechanisms.

    Christian – Re SRNE, I looked at them a couple of months ago. They claim to have a best in class PD-1 mAb and they have some newer targets but their antibody pipeline is way too early imo.

    Ohad

  63. Ohad, is Midostaurin a competitor to AMBI’s drug in AML? Will Midostaurin make it more difficult for AMBI to recruit for the trial? Would you compare the the two drugs?

  64. I Listened to the Array conf call today and no mention of Arry 502 on call or on slides, not even as 2014 catalyst. Also no questions regarding it from any of the analysts. I find it weird considering that without an asthma or ex US filasenib deal, they will have to dilute to fund the p3 520 trial. Do you think it was intentionally left out as a deal is already in place?

  65. Richard – Midostaurin appears less effective and more toxic compared to quizartinib. I don’t view it as a real competitor, although there are a couple of next gen compounds which should be viewed as competitors.

    Manish – Don’t know how to interpret that. I always prefer to assume a more conservative scenario of no deal for ARRY-502.

    Ohad

  66. Hey Ohad
    I just read something about Juno Therapeautics, seems like the super-group start-up focussed on immunooncology… CARs and CAR-Ts technology.
    What do you think of this approach? It seems that NVS is the other big player.
    Thanks
    Dan

  67. Hey Ohad
    one more immuno-oncology question!
    What about CDX-1401, the dendric cell vaccine… in combination with Yervoy? CLDX are going to test it in combination with other drugs. Seems they have a lot of expectation for this antibody-based drug.
    Thanks
    D

  68. Ohad
    I was surprised by the market reaction to SGEN results. I read the transcript but didn’t see anything dramatic to justify >11% drop. Is it related to ECYT disaster?
    thanks–andre–

  69. Dan – Indeed CARs are a very promising class of treatments. The third leader in this field is Kite Pharma (in which we [Pontifax] are investors…).

    http://www.marketwatch.com/story/kite-pharma-inc-completes-50-million-mezzanine-private-financing-2014-04-28

    Not sure about CDX-401, I don’t think it’s in anybody’s models.

    Manish – Thanks! It was still depressing to see ECYT’s p3 halted so early for futility. There wasn’t even a PFS signal :(

    andre – Agree about the reaction to SGEN results. Don’t think it is related to ECYT’s meltdown, if anything it’s IMGN which should experience “collateral” damage because of their folate receptor ADC. Will elaborate more on this topic as part of a new post tomorrow.

    Ohad

  70. What do you think of the recent Phase 1b Data for Cobimetinib in Combination with Vemurafenib? Look good for upcoming Cobimetinib data in current phase 3?

  71. The numbers are impressive but these small single arm studies always over-estimate a drug’s true effect. In other words, it’s hard to conclude anything definitive.

    Ohad

  72. Hi Ohad,

    Any chance on putting out a new piece on Exelixis in light of recent developments? What are your thoughts on its current valuation ($1.50 or $300mil market cap)?

  73. Ohad

    Am new here and noticed you have been spot on on many bios. Congrats!

    I think exel has good risk/rewards below $2. What is your thought? Roche CEO just said cobi/Zel got fast track for US.

    How do you assess success of METEOR and if succes, what type of sales could we expect from that?

    Thanks

  74. zoomilk – Thanks, unfortunately EXEL has not been a success story to date. I agree in principle that EXEL has a good risk/reward here but until they solve the debt issue I don’t see the stock going anywhere.
    Even if you ignore the RCC and HCC programs, cabo in MTC and RET+ NSCLC plus the profit share from cobimetinib should generate sales of >$200M.
    With respect to likelihood of technical success for METEOR, I would go with 30% based on the strong p2 data but also lack of randomized data in this setting.

    Ohad

  75. Thank you chad

    What break down of sales are you assuming for

    Rev for MTC (?$60M?)
    Roylaty from Cobi/Zel outside US
    Rev from Cobi/Zel in US
    Rev for RET+ NSCLC (Is this a sure thing?)

    Thanks

  76. Below are conservative assumptions (lower than depicted above). The RET+ NSCLC is not a sure thing but early indications were promising. The company was supposed to start a p2 study but I haven’t heard anything on that front for months.

    Rev for MTC – 50
    Roylaty from Cobi/Zel outside US – 30
    Rev from Cobi/Zel in US – 70
    Rev for RET+ NSCLC (Is this a sure thing?) – 50

    Ohad

  77. Thanks Ohad

    My estimates were higher, but based on your numbers, $3 is conservative, $5 fair and $8 is lofty.

    I do not think debt is a big issue. I got into this stock at $1.5 and I am seeing in it acting quite well. It could be that you have been in this stock for a long time and think that the debt issue might be what is holding this back. I think the more likely scenario is high pessimism and frustration that has led to excellent entry point for a relatively low risk/high reward situation.

    Thanks

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