In a time when so many biotech companies do not know how they will survive the nuclear winter of 2009, two companies we hold in the biotech portfolio, stand out in the crowd. Immunogen (IMGN) and Exelixis (EXEL) are poised for an exciting year, with plenty of events in the coming twelve months. The two companies have a lot in common: Both are developing innovative drugs for cancer that rely on remarkable basic science, both can generate an unlimited number of novel agents, that in turn can be licensed to large partners, and perhaps more importantly these days, both can remain independent of the capital markets for at least two years. Above all, the two companies exemplify how good products and good technologies can still generate tremendous value for investors, even during these economic turbulent times.
Immunogen’s T-DM1 continues to show promise
Last week’s Friday, Immunogen’s investors held their breath as Genentech (DNA) published results from a phase II study, which is evaluating T-DM1 (Genentech’s Herceptin armed with Immunogen’s technology) in breast cancer patients. Making this data even more intriguing was Genentech’s decision earlier this year to expand T-DM1’s clinical program and advance it to a phase III registration trial, based on early read-out from the phase II trial. This decision led investors to believe that Genentech would not have embarked on such an aggressive clinical program unless results were positive, as I discussed here. Based on Friday’s price action, it seems that results were not much of a surprise to anyone, nevertheless, it is now very clear why Genentech is so excited with T-DM1.
T-DM1 is an antibody-drug conjugate (ADC) aimed at treating a subset of breast cancer patients whose tumors express a protein called Her-2. Genentech pioneered the field of Her-2 therapy with Herceptin, an antibody targeted against HER-2. As Herceptin became one of the best selling oncology drugs to date, with annual sales approaching $5 billion, it was clear that Genentech as well as other players will try to address this lucrative market by novel drugs.
Today there is an additional approved drug, GlaxoSmithKline’s (GSK) Tykerb and several agents in the clinic that target Her-2 breast cancer, including Genentech’s T-DM1 and pertuzumab, which is currently in another phase III trial. Other agents include Bristol-Myers Squibb’s (BMY) tanespimycin, Wyeth’s (WYE) HKI-272 and Novartis’ (NVS) RAD001. Not all of these new agents target Her-2 directly, so some are tested in combination with Herceptin, but the ones that do target Her-2 represent potential competition for Herceptin’s dominant position. The realization that the market is becoming more complex with more drugs in the clinician’s armamentarium probably motivated Genentech to pursue opportunities such as pertuzumab and T-DM1, as Genentech is hoping that by having more drugs for HER-2 breast cancer patients, it will be able to tighten its grip on the market and maintain a meaningful market share.
Back to the data Genentech presented last week, it included results for over a hundred patients whose disease had progressed on Herceptin treatment. The data is still very preliminary, as it includes final response rate only for 76 patients and in contrast to what I expected, there is still no progression free survival data for these patients. Nevertheless, results were very encouraging, with 29 (38.2%) patients achieving a confirmed objective response (a sustained reduction of at least 30% in their tumors). This compares favorably with results from other drugs in similar patient populations, as shown in the table below.
INV (investigator assessment), IRA (independent radiology assessment),
ORR (objective response rate), PFS (progression free survival).
It is important to note that T-DM1 has never been directly compared to any of these regimens and that the different trials differ by many factors, so it is impossible to reach any definitive conclusions. The data from the T-DM1 trial is still not final, with a great deal of data missing, especially the final response rate for all the patients in the trial, the amount of patients with stable disease and the progression-free survival. Another important factor which will probably have a negative effect is the fact that the response rate provided for T-DM1 was based on investigator assessment, which is typically higher than independent assessment. Thus, it would be reasonable to expect final response rate in the range of 20%-30%, in the ballpark of other investigational treatments. The presentation also did not distinguish between a complete responders and partial responders, as opposed to prior presentations. Nevertheless, even when all this is taken into account, it is clear that T-DM1 is a very promising agent for this challenging patient population.
The results become even more impressive when the patient population of the study is examined. To my knowledge, the T-DM1 study is the only trial that included a majority of patients who progressed on the recently approved combination of Tykerb+Xeloda, the last line of defense for Her-2 metastatic breast cancer patients. These patients, who accounted for over 50% of the study population, perhaps represent the most advanced and challenging patient population with HER-2 breast cancer. Strikingly, these patients derived great benefit from T-DM1 with a confirmed response rate of 22%, a figure that should be higher in the final analysis next year because at the time of data cut off, some of them were not receiving T-DM1 long enough in order to be considered as responders.
This probably puts T-DM1 closer to FDA approval than ever, as the ultimate line of defense for patients who do not have other approved alternatives. In their recent quarterly conference call, Genentech’s management said that they are pursuing two registrational routes. The first route is a planned comparative phase III trial against Tykerb+Xeloda in patients who progress on Herceptin (second line), whereas the second route is for patients whose cancer progressed on treatment with Herceptin plus chemotherapy and then on Tykerb+Xeloda (third line). Because there are currently no approved therapies for the third line setting, Genentech believes that it will be relatively easy to get T-DM1 to market, based on a single arm study in 100 third line patients, which started in August of 2008. Due to the highly unmet medical need third line patients represent, it is believed that T-DM1 could be approved for this setting based only on objective response rate (tumor shrinkage). As opposed to other endpoints such as PFS and overall survival, the read-out for an objective response rate can be done very early in the trial, as soon as three months following the first treatment cycle of every patient.
