The AML pipeline – New approaches starting to bear fruit

AML (Acute myeloid leukemia) remains one of the few blood cancers in which no progress has been made for decades. This is in contrast to other blood cancers where novel treatments have turned fatal conditions into chronic diseases with long term remissions. Prominent examples are CML, which today has a low mortality rate and multiple myeloma where median survival is approaching 8 years and counting. The recent launch of Imbruvica and Gazyva followed by the anticipated approval of ABT-199 is expected to have a similar impact on CLL as well as on certain subtypes of B cell lymphoma.

Light at the end of the tunnel

Prognosis for newly diagnosed AML patients is grim, especially in older patients, with bone marrow transplant as the only potentially curative option. AML is still treated with chemotherapy, which has significant toxicity issues as well as limited impact on survival (if not followed by transplant).

All attempts to introduce novel targeted therapies for AML failed miserably. The only exception was Pfizer’s (PFE) Mylotarg (Anti-CD33 ADC), which had been approved in 2000 but was subsequently withdrawn from the market due to safety issues and limited benefit (Recent data with Mylotarg in younger patients imply the drug may have a role in AML after all).

Today, for the first time, there is reason for cautious optimism thanks to a growing pipeline that employs a multitude of therapeutic approaches. This growth emanates from a better understanding of AML’s biology as well as “technical” advances in the field of immunotherapy (ADCs, bispecific antibodies, CARs). Consequently, researchers can tailor drugs for specific AML subsets on the one hand and introduce more potent antibody based treatments on the other.

Below is a recap of the most promising AML drugs in development. Although most programs are still years from approval, many drugs should generate significant clinical data by YE2015. From an investment stand point, key names to follow are Agios (AGIO), Foundation Medicine (FMI), Ambit (AMBI), Seattle Genetics (SGEN), Epizyme (EPZM) and Macrogenics (MGNX).

Targeting driver mutations

One of the striking differences between the treatment paradigm of solid and liquid tumors is the role of biomarkers for patient selection. With most solid tumor breakthrough drugs, patients have to be selected based on specific mutations (EGFR, ALK, BRAF, HER2 etc.). In contrast, breakthrough drugs for blood cancers (Revlimid, Imbruvica, Velcade, Rituxan) are given to the entire patient population without the need of a companion diagnostic. In that sense, the current strategy in AML resembles the solid tumor approach, as the three most promising drugs are being studied in biomarker-defined subgroups of AML.

Agios – the most promising AML drug(s) in development

The most promising agent in development is Agios’ IDH2 inhibitor, AG-221. Agios, the pioneer of cancer metabolism, chose IDH2 (a metabolic enzyme) as a target based on a known mutation in the enzyme found in 15% of AML cases. Earlier this year the bet paid off and Agios reported impressive results in IDH2+ AML. The most recent update includes 9 CRs (8 of which were CR/CRp) and 5 PRs, leading to a response rate of 44% (14/32). Notably, most responses appear durable, which is unusual in AML as in most cases the effect is lost or treatment becomes too toxic for the patient.

Agios’ current market cap already factors in approval and good market penetration for AG-221. Potential upside could come from expansion to other IDH2-mutated tumors as well as initial results for the company’s IDH1 inhibitor (AG-120), which is in two phase I for solid and liquid tumors, respectively. Updated results for AG-221 and possibly AG-120 are expected at ASH in December.

Another way to get exposure to the Agios story is through Foundation Medicine, which will sell its diagnostic test as a companion diagnostic for both AG-221 and AG-120. On top of the direct sales potential ($100M in test for AML worldwide), AG-221’s approval (may come as early as 1H:16) will be the first opportunity for FMI to get an FDA approval and reimbursement. Foundation Medicine is collaborating with other companies, which plan to use a test from FMI as companion diagnostic for their drugs. Clovis (CLVS), for example, is using FMI’s test to identify patients sensitive to its PARP inhibitor (rucaparib).  On Clovis’ earnings call, management revealed that the pre-defined gene signature for “BRCAness” is performing well and initial results are expected in November at the EORTC meeting.

Ambit – A promising drug despite the negative sentiment   

Ambit’s quizartinib (FLT3 inhibitor) is not popular among investors but should still be viewed as a promising agent that has the right ingredients: Clear efficacy as monotherapy, a biomarker-defined population, good safety profile, regulatory visibility and a favorable phase III trial design. The drug entered phase III in April with top line results expected in early 2016 (Interim analysis in 2H:15).

I reviewed quizartinib’s advantages and disadvantages here (last section). The drug’s main value proposition is its ability to bridge FLT3+ patients to transplant without significant side effects.  Based on the large phase II experience, more than a third of the patients were bridged to transplant, which is the only option for achieving long term remission. Today, physicians use intensive chemotherapy as a bridge to transplant but success rates are lower and in many cases patients are too old and frail to tolerate side effects. Quizartinib’s mode of action and benign safety profile make it ideal as induction therapy for FLT3+ AML but also for combination regimens and as maintenance therapy.

In the ongoing phase III, relapsed/refractory FLT3+ patients are randomized to quizartinib or standard chemotherapy with overall survival as the primary endpoint. In this population, the ultimate goal is reaching transplant in eligible patients. The protocol also allows patients on the quizartinib arm to re-initiate quizartinib treatment after transplant. This may further enhance the drug’s effect and increase likelihood of success. The company expects to present data in the maintenance setting at ASH and management already hinted results are promising.

Even when assuming low probability of success in the ongoing phase III as salvage therapy, quizartinib has a reasonable likelihood of reaching the market in other settings given its clear activity in FLT3+ AML and combinability. For a company which would like to establish a presence in AML and is willing to fund a broad development program, quizartinib is the only high-quality late-stage asset available. This makes quizartinib an attractive asset as biopharma companies are anxious to fill their advanced stage pipelines.

Ambit’s management indicated there are ongoing discussions around an ex-US licensing deal. Such a deal may alleviate the market’s concerns and support a broad development program. From a financial perspective, Ambit is also an obvious acquisition target given its $110M market cap ($53M in cash). For a 100% premium ($220M), an acquirer can get a phase III program with sufficient funds for phase III completion and global rights for a drug with a $1B market potential.

Epizyme – Waiting for updated data in 2014

Epizyme develops inhibitors for HMTs (histone methyltransferases), a group of enzymes that play a role in regulation of gene expression. The company is focusing on oncogenic HMTs that function as growth drivers in cancer. Its most advanced program, EPZ-5676, is a DOT1L inhibitor and is intended for a subset of AML with MLL mutations where DOT1L serves as an oncogenic driver. The drug has been licensed to Celgene in 2012.

Preliminary findings from EPZ-5676’s phase I presented in November 2013 demonstrated some hints of activity in MLL+ AML but were mostly uninspiring. The company plans to present updated results later in 2014, which will hopefully show more robust activity at higher doses with more intensive dosing regimens. Epizyme already disclosed 2 objective responses within one of the cohorts (unclear whether responses were in AML as the trial enrolls patients with additional tumor types). Until more data are presented, development outlook for EPZ-5676 in AML remains uncertain.

From an investor perspective, attention is shifting from EPZ-5676 to Epizyme’s EZH2 inhibitor (EPZ-6438), which is being developed in collaboration with Eisai. The company recently disclosed encouraging signs of efficacy early in phase I, including PRs in two patients with B cell lymphomas.

Antibody drug conjugates

It is hard to predict what approaches will be the winners in AML but one can safely assume more chemotherapy is not the answer. After years of failed attempts, we know today that throwing more chemotherapy at AML may have a short term anti-leukemic effect but does not improve survival and may lead to early mortality. Sunesis (SNSS) and Cyclacel (CYCC) both have novel chemo agents in phase III for AML but the likelihood of success is low given poor experience to date.

Antibody-drug conjugates (ADCs) are designed to allow targeted delivery of their potent payloads specifically to AML cells. Their main advantage is the limited systemic exposure which should allow higher and longer exposure to treatment without causing severe side effects.

CD33 remains the target of choice for both Seattle Genetics and Immunogen (IMGN), which are using their novel ADC technologies. Interestingly, 3 different CD33-targeting agents failed to date in demonstrating a relevant clinical effect:  Mylotarg (ADC using Wyeth’s ADC technology), lintuzumab (a naked antibody from Seattle Genetics that reported promising phase I data that were not corroborated) and AVE9633 (Sanofi’s ADC based on Immunogen’s technology that had limited efficacy).

This time Seattle Genetics and Immunogen rely on new ADC formats with proprietary DNA-binding payloads that are claimed to be >100-fold more potent than those currently used. This will hopefully enable them to unlock the therapeutic potential of CD33 as a target for AML. SGN-33A is in phase I with data expected in December at ASH. IMGN779 is expected to enter the clinic in 2015. There is considerable expectation build-up for SGN-33A going into ASH. The phase I readout is viewed as the company’s 2nd most important catalyst in 2014, after phase III results for Adcetris as maintenance therapy (The AETHERA trial).

Immunotherapy – uncharted waters, high hopes

The phenomenal activity observed with bone marrow transplant (in some cases) is the ultimate proof that mobilizing the immune system can be very effective in AML. Immunotherapy treatments for AML are still early in development so they do not have clinical proof of concept. Programs in development include bispecific antibodies designed to redirect immune cells to attack AML cells, cell therapies such as CARs and antibodies against immune checkpoints.

Bispecific antibodies

For immunotherapy programs, CD123 is the most popular target. CD123 is a validated target in AML based on experience with Stemline’s (STML) SL-401, a toxin-fusion directed at CD123. SL-401 demonstrated anti-cancer activity in 25% of AML patients but only 3% achieved a CR. This may be explained by limited treatment duration and a narrow therapeutic window associated with bacterial toxins. SL-401 generated promising activity in a rare blood cancer related to AML (Blastic plasmacytoid dendritic cell neoplasm or BPDCN). Phase I data recently published in “Blood” included responses in 7 of 11 BPDCN patients after one treatment cycle. Of note, four of the responses were ongoing at the time of publication including a durable CR of 20 months.

Macrogenics has the first and only bispecific antibody for AML in clinical testing. MGD006 (anti CD123xCD3) entered phase I earlier this year and is expected to generate data in 2015. Xencor (XNCR) is also developing a bispecific CD123xCD3 antibody, expected to start phase I in late 2015. J&J (JNJ) recently licensed an Fc engineered antibody directed against CD123 from CSL, currently in phase I.

Amgen (AMGN) is pursuing CD33 with its bispecific antibody (AMG330, anti CD33XCD3), which is expected to enter the clinic in 2015. This agent demonstrated promising preclinical activity against AML.

CARs

Although companies which develop CARs do not focus on AML as their first indication, there are academic institutions with programs in phase I or approaching phase I. A group from the Peter MacCallum Cancer Centre in Australia published preliminary findings with a CAR targeting Le-Y. Signs of activity were observed among 4 AML patients, but none qualified as an objective response. A phase I for a CD123-targeting CAR from City of Hope Medical Center is expected to start later this year.

Immune checkpoints

Interestingly, AML is one of the only tumor types that are not pursued with PD-1 antibodies (Conflicting evidence about PD-L1 expression in AML). The most advanced immune checkpoint inhibitor is BMS’ (BMY) and Innate Pharma’s lirilumab (anti-KIR), which is designed to stimulate NK cells in contrast to PD-1 antibodies that activate T cells. NK cells are considered “early responders” in the immune cascade and although they have been implicated in anti-tumor activity, the approach of targeting an inhibitory NK receptor is still not validated.

Lirilumab is being evaluated as maintenance therapy for AML in a large phase II. As monotherapy, lirilumab had limited efficacy in AML but the indication was selected based on strong circumstantial evidence from stem cell transplant studies that demonstrated a correlation between KIR interactions and long term outcome.

AML catalysts

Below is a table of upcoming data readouts and trial initiations. 2014-5 is shaping as an exciting time frame for AML research with multiple catalysts.

AML catalysts

Portfolio updates

We are selling one of our Incyte positions in order to keep exposure below 10%. We are initiating new positions in Aerie Pharmaceuticals (AERI) and Stemline as well as adding another position in Foundation Medicine.

Portfolio holdings – August 24th, 2014

biotech portfolio - 24-8-2014Biotech ETFs - 24-8-2014

29 thoughts on “The AML pipeline – New approaches starting to bear fruit

  1. Ohad
    Since you are buying AERI, I wounder if you have an opinion about OPHT. They signed in May one of the best deals in the bio world with Novartis. Their drug Fovista is anti-PDGF for the treatment of wet AMD. The key is that it can be combined with any anti-VEGF on the market.
    thanks — andre–

  2. and also the question, what do you like about Aerie?

    i assume these points

    —-
    RhopressaTM and latanoprost clinically and statistically equivalent in patients with moderately elevated IOPs
    of 22 – 26 mmHg
     Latanoprost loses ~1 mmHg efficacy
     RhopressaTM maintains consistent efficacy
     Latanoprost does not target the diseased tissue – RhopressaTM does
    —-

    but is that enough differentiation to make it a winner? (without knowing pricing for latanoprost I assume it costs only a fraction)

  3. Didn’t another stock in your portfolio just go into phase 3 for a type of AML? (Synta) How come not mentioned?

  4. Andre – I would say I am an OPHT bear as I think they got the target right but with a problematic agent. My main concern has to do with co-formulations of their aptamer with a VEGF agent like Lucentis. I expect that down the road, bispecific antibodies or co-formulations of 2 antibodies from Roche and REGN will dominate the market given the lower amount of intravitreal injections (directly to the eye) that will be required.

    Christian – What I like about AERI is the fact their drug probably works (based on a strong p2 data set) and may be the first big thing in glaucoma in years. Glaucoma is not as sexy as AMD/DME but it is still a huge market and new treatment lines are needed to avoid surgical procedures. Latanaprost is generic but there should be a market for other MOAs especially in fixed dose combinations.

    Tom – I don’t consider ganetespib one of the promising AML drugs as data from the first portion of the LI-1 are not available so the jury is still out imo.

    Ohad

  5. Hello Ohad
    As I recall You usually write in depth before adding to the portfolio, this time you briefly mention the reasons ..

  6. alex – While I try to provide as much background as possible when I add a new stock, in some cases I just don’t have the capacity. Writing about something in depth requires a lot of time, which is always a matter of prioritization.

    Ohad

  7. Hey Ohad,
    as alway very interesting and inspiring. This article also inspired me to get my bone marrow registration done…Ike

  8. Ohad, don’t forget about CPXX (Celator Pharmaceuticals). CPX-351 is not a sexy, new exciting drug, but my hematologist says that it will immediately replace ‘7+3’, a regimen that every hematologist hates, he says. It has been SOC for forty years. Three of the principal investigators in the trial are Richard Stone (Dana Farber), Jeffrey Lancet (Moffit) and Jorge Cortes (M.D. Anderson). Stone and Lancet spoke during CPXX’s last presentation. The stock is dirt cheap, under $75 million market cap. Interesting platform technology.

  9. Hey Ohad
    I can see that FMI is now one of your biggest holdings.
    I have started a new position. I was reading some very interesting articles on the ILMN story and how that company has been executing and developing new products. The lastest one is the idea of an universal cancer screen… (recent Forbes article). What may be the consequences of that for FMI. The ILMN story gives me perspective for FMI’s potential.
    Dan

  10. Richard (CPXX) – In order to replace 7+3, CPX-351 will first have to show OS superiority early in 2016. Based on the p2 data I am not optimistic (2.2 month difference p= 0.19). The company should be commended for doing a large randomized p2 with OS as an endpoint, I just don’t think data are compelling enough.

    Dan – Yes I am very excited about FMI and the recent ILMN pr only makes my conviction stronger. The entire field is moving towards multi-gene tests, which means there will be many competitors but FMI has first mover advantage and a growing footprint. Moreover, it will be the first NGS test approved as a companion diagnostic in 2016.
    Bottom line, I expect FMI will be acquired by one of the large diagnostics companies (Roche, Abbott).

    Ohad

  11. Ohad, any reason why you left LOR-253 from Lorus off the list? Just too early? They seem to be pursuing a novel target that no one else is pursuing in KLF4. Obviously the target needs to be validated in man.

  12. Ohad, the CPXX Phase III trial is in secondary AML:

    These data, along with results from the Phase 2 study of CPX-351 in patients with AML in first relapse, support Celator’s currently-enrolling Phase 3 study of CPX-351 as a first-line therapy in older patients with high-risk (secondary) AML, which is being conducted in partnership with The Leukemia & Lymphoma Society®.

    The Phase II results in SECONDARY AML were as follows:

    A planned analysis of secondary AML patients (patients with a prior antecedent hematologic disorder or history of prior cytotoxic treatment) showed an improved response rate (57.6% vs 31.6%, P=0.06), prolonged event-free survival (median 4.5 vs. 1.3 months, HR=0.59, P=0.08) as well as overall survival (median 12.1 vs. 6.1 months, HR=0.46, P=0.01). The overall survival benefit in this population was statistically significant.

  13. Mcbio – Exactly, interesting approach, too early to be included.

    Richard – I am still skeptic about the likelihood of the effect they saw in p2 in sAML as this was a subset analysis with a limited sample size.

    Ohad

  14. hey Ohad
    NPSP is scheduled for an adcom meeting in next 10 days for their new orphan drug Netpara (first drug on market and no competition for this indication – Hypoparatyroidism, when body does not produce enough paratyroid hormone, their licensed drug for the opposite problem (too much hormone, Sensipar is a bluckbuster drug – it was licensed to Amgen). Have you got any opinions of the potential of this drug as well as other orphan and ultra-orphan drug companies? Shire, after all, was acquired by Abbvie, and ALXN has often been rumored an acquisition target (but too expensive).
    Thanks, as always
    Dan

  15. hi Ohad, do you plan on adding IMGN again? somehow my feeling is that they some tox problems for most compounds.

  16. Hello Ohad,
    Mologen AG claims to have the best in class TLR-9 agonist for cancer immune therapy (MGN1703). It seems that nobody cares about this company. The pps is down from the recent highs. Do you have an opinion? Thanks Toby

  17. hi again

    there were quite some insider sales earlier this year in AERI, and also a little in FMI. did you consider these as neutral?

  18. Dan (NPSP) – The Natpara case is an interesting one because they drug clearly works and the biology story is very straighforward (hormone replacement therapy) BUT the drug is similar to Lilly’s Forteo (also a recombinant form of PTH) which is on the market for osteoporosis. A lot of hypoparathyroidism patients take or have taken Forteo off label and it’s hard to predict how this will impact market performance of Natpara, which will likely be more expensive. Bottom line, the drug should get approval but the ability to charge a premium over Forteo is debateable.
    In general, orphan diseases have become a gold mine, my personal feeling is that we are starting to experience a backclash on pricing and companies are starting to realize they can’t charge imaginary amounts just because they treat a rare disease.

    Christian – Unless stock goes under 10$, I plan on waiting for the next data update. My primary focus is 853 and 289, where, as you mention, toxicity issues may be a limiting factor.

    Toby – Sorry, haven’t looked at them for a while.

    Christian (FMI, AERI) – Insider selling is never a positive thing (except from serving as a guarantee that there are no known dramatic negative news). Nevertheless, it is not unreasonable for VC funds and entrepreneurs to sell after the lock-up period expires. In any case, this doesn’t change my view on both stocks.

    Ohad

  19. Indeed very disappointing although market expectations were already pretty low.
    I will try to publish something later today, in any case, the focus now shifts to cobi’s data in melanoma later this month.
    If the stock drops by more than 50% I would add ahead of the cobi data.

    Ohad

  20. Interesting approach from a scietific point of view (using red blood cells as carriers of drugs) but I don’t see teh advantage over standard delivery technologies.

    Ohad

  21. Hi Ohad,

    Congrats for the piece.
    I’m wondering whether you are aware of any recent update from Xenetic Biosciences. It seems that the company has not been posting relevant news for a while now.

    Thanks!

  22. Gabriel – After a quick look, it seems that OncoHist demonstrated some signs of efficacy in AML but in general activity is limited (which is why they pursue combination with cytarabine). The EPO program looks interesting but the market is so competitive and tough to navigate (partially due to pharmacoeconomic issues) that it’s hard to get excited with the commercial prospects at this stage.

    Ohad

  23. How about ATNM? Impressive phase 2 results with Iomab B and about to kick-off phase at Q4 this year. Radioimmunotherapy could be big in AML market. I appreciate your input on this one.

  24. Hi Ohad,

    It’s been a year since your article on AML. Can you provide an update?

    Also why isn’t MEIP Pracinostat not in your article? Whats your thoughts on their progress?

    Isaac

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