Biotech portfolio update – Three readouts and an acquisition

There was a lot of activity in my coverage universe in the last two weeks, including positive data readouts for three companies and an acquisition announcement. However, of the four cases, only two resulted in share appreciation.

Ambit – To keep or not to keep (the CVR)

Two weeks ago, Ambit (AMBI) agreed to be acquired by Daiichi Sankyo in a deal that included a $15 upfront payment and $4.5 in Contingent Value Right (CVR) per share. The CVR represents a milestone-like mechanism in which Ambit’s shareholders may eventually get additional payments equal to 30% of the initial purchase price. Continue reading

Biotech portfolio update – 2013 summary and 2014 preview

Seattle Genetics (+65% in 2013)

In 2013, Seattle Genetics’ (SGEN) Adcetris reached market saturation in its approved labeling (relapsed/refractory HL), shifting market attention to label expansion. These include DLBCL, where Adcetris showed impressive efficacy in highly refractory patients (42% response rate, PFS of 5 months) and CTCL (73% response rate). Adcetris is in phase III for earlier stages of HL as well as CTCL, which are viewed as the next opportunity to grow sales. The company will outline its registration strategy for DLBCL in early 2014. Continue reading

Synta – Implications from Infinity’s Hsp90 failure

Last month’s failure of Infinity’s (INFI) Hsp90 inhibitor (retaspimycin) has mixed implications for Synta (SNTA), whose Hsp90 inhibitor (ganetespib) is in phase III for lung cancer. On the one hand, ganetespib’s most advanced competitor is now eliminated but on the other, the failure raises doubt about targeting Hsp90 in lung cancer. In that sense, Infinity’s failure gives another reason to question the validity of Synta’s phase II results (that are already quite controversial). As background, I discussed Synta’s results hereContinue reading

Biotech portfolio update – Array, Morphosys, Onyx and Synta

Array Biopharma – Following Puma’s footsteps

Last month Array Biopharma (ARRY) announced a licensing deal with Oncothyreon (ONTY) for ARRY-380, a selective HER2 kinase inhibitor for the treatment of HER2+ breast cancer. ARRY-380 is regarded as an insignificant program, evidenced by the modest deal size ($10M upfront) and the lack of market reaction, but this could change once investors make the connection between ARRY-380 and  Puma Biotechnology’s (PBYI) neratinib (EGFR/HER2 inhibitor). Although neratinib is more advanced, backed by more clinical data and probably has broader potential, ARRY-380’s selectivity profile could differentiate it in certain clinical settings. As the market is clearly excited with neratinib (Puma has a market cap of ~$1.6B), some of the excitement could eventually be tunneled toward Array as well. Continue reading

Synta’s fiASCO– Disappointing results but signal is still there

Last weekend, Synta (SNTA) reported updated results from a randomized phase II evaluating ganetespib in NSCLC (non-small cell lung cancer). Although the data set demonstrated a survival signal that merits advancing ganetespib to phase III, results were worse than last year’s interim analysis (discussed here). This triggered a sell-off in the stock, which was down 39% this week.

Putting disappointment aside, the clinical profile that emerges from the updated results is positive and should be regarded as reliable given the large size of the trial (252 patients). If these results are reproduced in the ongoing phase III, ganetespib will likely become a commonly used drug in 2nd/3rd line NSCLC patients with a clinical profile that resembles that of Avastin (Approved for 1st line NSCLC).    Continue reading

Biotech portfolio update – 2012 summary and 2013 outlook

In the last post of the year, I will try to provide a status update as well as key 2013 milestones for the stocks in our portfolio. I would like to use this opportunity to wish everybody happy holidays and a happy New Year.

Seattle Genetics

Seattle Genetics’ (SGEN) main task is expanding Adcetris’ use outside of approved niche indications (Hodgkin’s Lymphoma and ALCL). As an anti-CD30 antibody-drug conjugate (ADC), Adcetris has potential utility wherever CD30 is expressed by tumors. Continue reading

Winners of ESMO 2012


Synta (SNTA) reported updated results for its Hsp90 inhibitor, ganetespib, in non-small cell lung cancer (NSCLC). Synta is evaluating ganetespib in a randomized phase II trial (the GALAXY trial) where ganetespib is given in combination with standard chemotherapy. This update comes 3 months after the previous read-out, which I discussed here.

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Synta- The Signal Looks Real

So what does the market really think about Synta’s (SNTA) lung cancer data?  2 weeks ago, the stock lost 33% in 1 trading session following interim results from the phase II trial for the company’s lead agent, ganetespib. Since then, Synta regained most of the fall, as the market digested the data with the help of supporting analysts from Jefferies and Roth Capital.

Looking at the clinical results, it is easy to understand the market’s bi-polar reaction. One the one hand, there are multiple promising efficacy signals and a good safety profile. On the other, the data set was less mature than what investors had expected.

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Winners of ASCO 2012

BMS’ PD-1 antibody – As good as it gets


The biggest news at this year’s ASCO came from BMS’ (BMY) PD-1 antibody, BMS-936558. This antibody belongs to a new class of antibodies that stimulate patients’ immune system to attack cancer. This approach has been recently validated with another BMS antibody, Yervoy, which was approved last year for melanoma.

Based on results presented at the meeting, BMS-936558 is superior to Yervoy by any measure. In fact, it is probably one of the most promising oncology drugs ever to be tested in humans. It induces tumor shrinkage in a substantial portion of patients, creates an immune response that keeps the disease under control for long periods and it does so with limited side effects. To make things even better, there might be a way to pre-select patients who are more likely to respond to this agent. Continue reading

Biotech Stocks to watch in 2012

Exelixis – More than a prostate cancer drug

Exelixis (EXEL) is starting to recuperate after last year’s clash with the FDA regarding a registration trial for its lead agent, cabozantinib (cabo), in prostate cancer. The company, which still sticks to its original plan of conducting a phase III trial using pain as a primary endpoint, is expected to announce it has enrolled the first patient in the study in the coming weeks. The trial will enroll 250 patients with bone metastases who are suffering from cancer associated pain and will evaluate cabo’s effect on bone scans and pain. Continue reading