By 2003, the U.S. Food and Drug Administration [FDA] had approved two radioactive labeled monoclonal antibodies for the treatment of patients with “relapsed” or “refractory”, low-grade or follicular B-cell NHL.  Refractory NHL is disease that never responded or has stopped responding to standard therapies.  Relapsed NHL is disease that has returned after successful initial treatment. 

Both products utilize monoclonal antibodies that target an antigen expressed by certain normal and malignant B-cell lymphocytes [CD20] combined with the killing power of radiation to eradicate tumor cells.  Zevalin® [ibritumomab tiuxetan] by Spectrum Pharmaceuticals, Inc. (SPPI) in the United States and Bayer Schering Pharma ex-United States employs yttrium-90 as its therapeutic payload, while Bexxar® [tositumomab] by GlaxoSmithKline (GSK) uses iodine-131. 

In April 2008, the European Commission extended the marketing authorization for Zevalin in Europe to include first line consolidation therapy for patients with NHL.  The decision by the European Commission to expand Zevalin’s indication was based on data from the pivotal Phase 3 First-Line Indolent Trial [FIT] demonstrating that the addition of Zevalin significantly prolonged the median progression-free survival time from 13.5 months [control arm] to 37 months [p<0.0001].  The data were presented for the first time at the 49th Annual Meeting of the American Society of Hematology [ASH] in December 2007. 

In November 2008, the FDA accepted and granted priority review status for Spectrum Pharmaceuticals’ supplemental Biologics License Application [sBLA] for expanded use of Zevalin as a first line consolidation therapy for patients with NHL.  A Prescription Drug User Fee Act [PDUFA] target date of July 2, 2009 has been established by the FDA for a decision regarding the Zevalin sBLA, although PDUFA dates appear to be a moving target with the agency nowadays. 

Assuming the sBLA is approved, which appears likely based on the European Commission decision, Spectrum Pharmaceuticals stated that Zevalin’s addressable patient population would increase by approximately 18,000.  At an approximate cost of $25,000 per treatment, the additional market for Zevalin would be worth $450 million.  Not bad. 

Unfortunately, despite the fact that both Zevalin and Bexxar have been demonstrated as safe and effective treatments for patients with relapsed or refractory NHL for years, it has been reported that fewer than 10% of patients who are candidates for the products ever receive them.  Recall the aforementioned statistic regarding NHL relative survival rates, indicating that a significant number of patients experience relapsed or refractory NHL.  According to Spectrum Pharmaceuticals, Zevalin’s annual sales in the United States were a mere $11.4 million in 2008. 

Therefore, while an expanded indication for Zevalin is nice, the fact that the product has yet to penetrate the market indication afforded approximately five years ago implies that there are other obstacles to the product’s success.  For example, while medical oncologists are the key prescribing audience for Zevalin and Bexxar, most aren’t licensed to administer radiopharmaceuticals – resulting in patient referrals to radiation oncologists and/or nuclear medicine physicians in the hospital setting.  This may provide an economic incentive to medical oncologists to exhaust all non-radioactive options, such as chemotherapy, before referring NHL patients to receive products that will not improve their bottom line.  Sad but true, this and other factors were discussed in my opinion editorial for Oncology Business Review [OBR] back in September 2007 titled “Radiopharmaceuticals Need a Jump-STaRT.” 

Spectrum Pharmaceuticals’ stock has been strong as of late – but perhaps more a result of Russell Investments adding Spectrum Pharmaceuticals to the Russell Global®, the Russell 3000® and the Russell 2000® Indexes.  For investors, significantly improved sales of Zevalin in future quarters will be much more important to Spectrum Pharmaceuticals than near-term approval of the sBLA.

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About MD Becker Partners LLC

MD Becker Partners is a boutique management and strategy consulting firm focusing on both public and private companies in emerging growth industries, such as pharmaceuticals, biotechnology, medical devices, and cleantech. The firm’s mission is to bring experience-based insights gleaned from the three independent disciplines of investor relations, strategic advisory and operational improvement together and apply them to carefully conceived and expertly enacted strategies that help companies increase visibility, unlock value and access resources to grow their business. For more information, visit the website: http://www.mdbpartners.com/

Disclaimer: This article contains the author’s own opinions, and none of the information contained therein constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. To the extent any of the information contained in the article may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

Investor enthusiasm may be warranted, as this pathway is mutated or amplified more frequently than any other pathway in cancer. Activation of the PI3K-AKT-mTOR pathway is associated with cell survival, malignant transformation, tumor invasiveness, and resistance to chemotherapy, radiation therapy and other agents.

In terms of hierarchy, PI3K is at the top, AKT in the middle, and mTOR resides furthest downstream in the pathway. Generally speaking, activation of PI3K results in activation of AKT, which ultimately leads to activation of mTOR in a sequential manner.

Helping to validate the pathway, earlier this year Novartis (NVS) received Food and Drug Administration (FDA) approval for Afinitor® (everolimus), an oral inhibitor of mTOR, for patients with advanced renal cell carcinoma after failure of treatment with Pfizer Inc.’s (PFE) Sutent® (sunitinib) or Nexavar® (sorafenib) by Bayer HealthCare Pharmaceuticals, Inc. and Onyx Pharmaceuticals, Inc. (ONXX). Afinitor® is expected to generate several billion dollars in annual sales, as Phase 3 trials are underway to explore potential of the product in treating multiple additional cancers.

Unfortunately, it has previously been demonstrated (Cancer Res. 2008 Sep 15;68(18):7409-18) that inhibition of downstream targets such as mTOR can activate upstream targets such as AKT through various feedback mechanisms, which may eventually counteract the anticancer efficacy of mTOR inhibitors. In other words, although mTOR inhibition may initially treat the disease, it ultimately turns on a part of the pathway that leads to enhanced tumor survival.

Accordingly, the apex of the pathway (either PI3K or AKT) might be a more effective target and less susceptible to the effects of feedback loops associated with mTOR inhibition. This may explain why Sanofi-aventis (SNY) recently entered into a collaboration with Exelixis, Inc. (EXEL) that could be worth more than $1 billion for the discovery of inhibitors of PI3K for the treatment of cancer. Under the agreement, Exelixis receives an upfront payment of $140 million and guaranteed research funding totaling $21 million over three years.

The Sanofi-aventis/Exelixis collaboration appears consistent with other recent PI3K transactions. In April 2008, Roche acquired Piramed Limited, a privately-owned UK company focusing on therapeutics targeting PI3K, for approximately $175 million in cash. Back in November 2005, Piramed entered into a collaboration with Genentech, Inc. (now Roche) for the development of compounds targeting PI3K for the treatment of cancer. Under the terms of that agreement, Piramed received an undisclosed upfront payment and was eligible for milestone payments during development and on product approval up to a potential aggregate of approximately $230 million.

So it is not surprising that Keryx Biopharmaceuticals, Inc. (KERX) became yet another major beneficiary of the ASCO-effect when the company announced positive data from a Phase 2 combination study of its novel AKT inhibitor (KRX-0401, also known as perifosine) for the treatment of advanced metastatic colon cancer. Keryx also presented positive single agent Phase 2 data of perifosine in the treatment of advanced metastatic renal cell cancer – especially in patients that had previously failed treatment with mTOR inhibitors (either everolimus or temsirolimus). The company’s stock, which was trading around $0.25 at the end of April 2009, recently traded as high as $1.45 on the news. However, even with the recent increase, Keryx has a current market capitalization of just over $60 million.

The stock of AEterna Zentaris Inc. (AEZS) also rose on the news. AEterna licensed North America perifosine rights to Keryx, but kept the rest of the world rights and is seeking partnerships for Asia.

About MD Becker Partners LLC

MD Becker Partners is a boutique management and strategy consulting firm focusing on both public and private companies in emerging growth industries, such as pharmaceuticals, biotechnology, medical devices, and cleantech. The firm’s mission is to bring experience-based insights gleaned from the three independent disciplines of investor relations, strategic advisory and operational improvement together and apply them to carefully conceived and expertly enacted strategies that help companies increase visibility, unlock value and access resources to grow their business. For more information, visit the website: http://www.mdbpartners.com/

Disclaimer: This article contains the author’s own opinions, and none of the information contained therein constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. To the extent any of the information contained in the article may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

It is no wonder that ASCO is closely watched by biotechnology industry observers. According to the Pharmaceutical Research and Manufacturers of America (PhRMA), there are 633 medicines and vaccines developed through biotechnology in human clinical trials – the majority of them (254) for the treatment of cancer. Even more impressive, all of these products are either in human clinical trials or under review by the Food and Drug Administration (FDA).

The need for new cancer treatments and diagnostics is compelling. This year alone, the American Cancer Society estimates nearly 1.5 million new cases of cancer will be diagnosed with more than 562,000 Americans expected to die from the disease. Not only is cancer the second leading cause of death in the US (exceeded only by heart disease), the economic impact is massive. University of Chicago economists Kevin Murphy and Robert Topel reported that a permanent one percent reduction in mortality from cancer alone has a present value to current and future generations of Americans of nearly $500 billion and that a cure would be worth about $50 trillion.

For biotechnology companies working in the field of cancer, double or triple-digit stock price increases from the end of April through the ASCO meeting (usually held in late May or early June) are not unprecedented. I first dubbed this the “ASCO-effect” in May 2000 while presenting a review of the top five performing stocks from companies issuing ASCO-related news from 1996 through 1999. Ironically, more than a decade has passed, but some of the same companies are once again benefiting from the ASCO-effect.

For example, Peregrine Pharmaceuticals, Inc. (PPHM), known as Techniclone Corporation at the time, saw its stock price nearly triple as a result of the ASCO-effect back in 1998. The stock, which was trading below $0.40 at the end of April 2009, recently traded as high as $1.13 on news that preliminary data from a Phase 2 clinical trial evaluating the company’s bavituximab in combination with docetaxel in advanced breast cancer patients would be the subject of an oral presentation at ASCO.

In addition, the stock of Poniard Pharmaceuticals (PARD), known as NeoRx Corporation at the time, nearly doubled as a result of the ASCO-effect in 1998. The stock, which was trading around $3.00 at the end of April 2009, recently traded as high as $5.19 on news that data from two Phase 2 clinical trials evaluating the company’s picoplatin in metastatic prostate and colorectal cancer would be presented at ASCO.

Since there are over 4,000 scientific abstracts being presented during ASCO 2009, it would be impossible to detail all of them in this setting. However, following recent positive Phase 3 results from Dendreon Corporation (DNDN) regarding its prostate cancer vaccine study; it is not surprising that investors appear to be gravitating towards companies working in the field of prostate cancer treatment. This enthusiasm only increased when Johnson & Johnson (JNJ) announced that it would acquire Cougar Biotechnology, Inc. (CGRB), a development stage company with an oral prostate cancer treatment being studied in two Phase 3 clinical trials, for approximately $1.0 billion.

With this in mind, OncoGenex Pharmaceuticals, Inc. (OGXI) appears to be one of the early beneficiaries of the ASCO-effect in 2009. The company’s stock, which was trading around $6.00 at the end of April 2009, recently traded as high as $22.00 on news that the company will be presenting final results of a Phase 2 trial of its prostate cancer treatment at ASCO. On Monday, investors will react to the data presented over the weekend.

At the start of the year I provided a positive outlook for the biotechnology industry in 2009, citing the sector’s defensive characteristics, favorable technical aspects, and improving fundamentals, such as the number of new product approvals, products in clinical trials and the brisk pace of industry consolidation and licensing transactions. With these fundamental and technical characteristics intact, it is possible that this year’s ASCO meeting could be the spark that reignites investor enthusiasm for the sector.

About MD Becker Partners LLC

MD Becker Partners is a boutique management and strategy consulting firm focusing on both public and private companies in emerging growth industries, such as pharmaceuticals, biotechnology, medical devices, and cleantech. The firm’s mission is to bring experience-based insights gleaned from the three independent disciplines of investor relations, strategic advisory and operational improvement together and apply them to carefully conceived and expertly enacted strategies that help companies increase visibility, unlock value and access resources to grow their business. For more information, visit the website: http://www.mdbpartners.com

Disclaimer: This article contains the author’s own opinions, and none of the information contained therein constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. To the extent any of the information contained in the article may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.