Exelixis – Setting the Facts Straight

Exelixis (EXEL) saw its share price cut in half last week, due to a regulatory setback. Based on what others have published and questions I received there appears to be some confusion with respect to  the implications for the company. I decided to address this issue using a questions and answers format, based on the many inquiries I received. Hope this format sheds some light on the situation.

What just happened?

Earlier this week, Exelixis announced it could not reach an agreement with the FDA regarding a phase III trial for its lead agent, cabozantinib (cabo), in prostate cancer. The company intended to run the study under special protocol assessment (SPA), which is an agreement with the FDA regarding the trial’s design. An SPA details study parameters such as patient population and endpoints that the FDA sees as sufficient for approval.  Consequently, cabo’s phase III trial will be run under standard regulatory framework.

Why is this bad?

SPA is an important risk mitigator in registration clinical studies. It does not guarantee or predict a drug’s performance in a given study but it substantially decreases the likelihood of being turned down due to technical issues with trial design and endpoints.

An SPA is particularly important in settings where no clear precedent exists. For example, indications for which no drugs have been approved specifically, drugs with new modes of action or endpoints that are not classic ones (like overall survival). As I previously discussed, Exelixis’ drug has some unique properties turning into one of the most promising yet controversial in development. These unique features prompted Exelixis to design a unique study for which it attempted to get the FDA’s blessing.

What’s so special about cabozantinib?

Originally, cabo was designed and studies as a standard anti-cancer drug. Last year, investigators discovered the drug leads to resolution of bone scans, which are used to image bone metastases in cancer patients. The most profound effect was seen in prostate cancer patients. To date, no approved or investigational drug has demonstrated such a signal. Cabo stirred a lot of controversy, as many believed the effect observed in the bone scans is not real or simply too good to be true. In addition, since there is no experience with drugs that lead to bone resolution, the clinical relevance of such a treatment modality is unproven. Cabo also appeared capable of reducing pain in prostate cancer patients, which is typicsally associated with presence of bone mets.

Does cabo have anti-cancer activity besides the bone met effect?

On top of the drug’s alleged activity on bone lesions, it has clear activity on non-bone lesions (soft tissue lesions) across a variety of tumor types, including prostate, renal, ovarian and liver cancer. This activity by itself merits further development of cabo, even if the bone met effect turns out to be unreal. A striking proof for this activity arrived last month, when cabo demonstrated overwhelming activity in a pivotal trial in medullary thyroid cancer (MTC), this time under SPA.

What is Exelixis’ clinical strategy in prostate cancer?

Acknowledging the unique activity profile of cabo, Exelixis wanted to pursue approval using two pivotal studies. A standard trial that measures overall survival, similarly to other drugs (study 307) and a trial that evaluates cabo’s effect on bone pain and bone scans (study 306), which, it hoped would be enough for approval.  The pain trial aims at taking advantage of cabo’s activity on pain and bone scans, differentiating the drug in the increasingly crowded field of prostate cancer. Originally, it was viewed as a fast route to market although now the company expects both studies to have data in the same time frame (probably H1 2014).

Does it mean cabo cannot be approved based on the pain trial

No it doesn’t. Having an SPA is not a prerequisite for approval. However, the trial should be viewed as more risky now that it is unclear whether in case of a positive outcome, the design and endpoints used by Exelixis will be endorsed by the FDA. It is important to note that the FDA has already approved drugs solely based on their pain benefit in cancer patients and according to Exleixis, the agency still views pain relief as an approvable endpoint. The FDA and the company did not see eye to eye, though, on a list of additional issues, including using bone scan resolution as a pre-defined endpoint.

Is the FDA being unfair with Exelixis compared to other companies?

No. The FDA has the complex mission of introducing new treatments to the market while making sure only the most effective and safest drugs get approved. In order to do so, the agency has to weigh many factors and could sometimes make drug developers’ lives frustrating. Although there were cases where the FDA has been too conservative, in this case the refusal to award an SPA was reasonable. After all, the design Exelixis suggested has never been used in a registration trial.

Why did the market respond so brutally?

The market punished Exelixis not only because it could not obtain an SPA, but also for setting high expectations which turned to be unjustified. If there is one thing Wall St. hates is credibility issues, especially when a company over-promises and under-delivers. In this case, Exelixis made the SPA sound like a done deal that was just a matter of time. There is no doubt management truly believed they would reach an agreement with the FDA in a timely manner, but if there is one area where a company needs to be as conservative as possible is interaction with regulators.

A good example of a company who knew how manage investors’ expectations is Incyte (INCY) with the SPA for the pivotal trial of ruxolitinib in myelofibrosis. This was another case of a trial in uncharted waters which required a lot of back and forth discussions with the FDA. In fact, the FDA dragged Incyte for many months with requirements which were not always decisive or consistent. Yet Incyte kept things vague enough until an agreement was reached.

How severe is the damage?

The recent clash with the FDA certainly tarnished Exelixis’ reputation but one has to admit that putting the SPA fiasco aside, the company has been executing very well. In the last year, the company refocused its operations around cabo and executed on a broad clinical program. It is important to note that Exelixis is running everything independently without a partner, which is unusual for programs at this stage.

How important are the results in thyroid cancer?

Extremely important. Although MTC is a relatively indolent disease representing a tiny commercial opportunity, it is the strongest proof for the drug’s activity to date. Cabo’s numbers were phenomenal: Based on Exelixis’ announcement the drug almost tripled progression free survival from 4 to 11 months, in a particularly sick patient population. This degree of improvement (Hazard ration of 0.28) is extremely rare in patients who are not biomarker-defined. This trial should result in the first regulatory approval for cabo next year.

Does the MTC trial increase chances of success in prostate cancer?

To some extent, as the effect on soft-tissue lesions could contribute to overall survival in prostate cancer. Nevertheless, since over 90% of metastatic prostate cancer patients develop bone mets, which are considered a highly unmet need, the effect on bone mets should play a crucial role in the 307 study. From that standpoint, the MTC trial does not strengthen Exelixis’ case in prostate cancer in a substantial way (even though in other indications, it certainly does).

Has your assessment of cabozantinib changed ?

Nothing changed fundamentally. The main question still has to do with how real the bone effect is and whether this effect together with the classic effect on soft tissue lesions can prolong survival. I still believe there is a good chance it can. The data in MTC actually proves the drug is very active, regardless of the bone effect.

What could improve the sentiment towards Exelixis?

The single most important future milestone is pivotal data from the 307 study (overall survival) in prostate cancer. Results are more than 2 years away and in the meantime, Exelixis is looking at several catalysts in 2011 and 2012.

Next weekend, the company will report updated results from a large phase II prostate cancer trial In Taxotere failures. The data set should demonstrate the bone met effect in an advanced homogeneous population and shed more light on durability of response, which is still an open question. Investors are also expecting evidence which shows that the effect on bone scans represents a real change using complementary imaging methods.

Also next weekend, results from a low dose study will be reported. This could alleviate a lot of the fears with respect to the drug’s tolerability, which proved to be problematic at the original dose. Evaluation of cabo in earlier treatment lines, primarily prevention of bone mets, requires a milder safety profile.

In 2012, cabo should receive approval in MTC based on the spectacular results in the EXAM trial. Cabo could become the leader in that market, as it looks much better than AstraZeneca’s vandetinib, another recently approved drug for the indication. The financial implications are low even though off-label use could boost sales dramatically. Additional data from other indications where cabo has interesting signs are also expected next year. Lastly, the company is expected to sell Asian rights for the drug in a deal that was pushed back from 2011 to 2012.

What about Exelixis’ financial position?

The company has been notorious for its gigantic R&D budget, which is creating some concerns about its ability to execute on a fully fledged registration program. However, going over the financial needs of the company until mid 2014, where pivotal data is expected, things actually look quite reasonable. Assuming the company finances the 306 trial (pain study), 307 trial (overall survival study) as well as starts a combination trial sometimes in H2 2012, it needs ~$230M just for prostate cancer. On top of that, the company would probably want to conduct several large randomized  phase II trials in other indications or a phase III study in a single indication (could be liver or ovarian cancer), this will add another ~80M. Adding G&A expenses of $120M for 2.5 years brings Exelixis’ financial needs to $430M.

The company expects to end 2011 with $300M in its coffers, so it is short of $130M, assuming it pursues a very aggressive development plan. On top of selling its stock (which would be unfeasible at current levels), Exelixis could get this amount from several sources including milestone payments on partnered programs and an Asian deal for cabo, which together could easily reach $80M in the next 2.5 years. Exelixis could probably generate several tens of millions in MTC given the stellar results, the premium pricing it could obtain and the long treatment duration, but establishing a dedicated sales force will probably consume most of these revenues. Therefore, the company will have to bring in additional $50M over a 2.5 year period, which should not be too hard.

Would you buy Exelixis at these levels ?

Absolutely. The burden of proof regarding the bone met effect still lies on Exelixis, making the company very risky. But fundamentally, the company has never been more attractive with undeniable activity in its first indication, potential approval next year and a growing data set of over 1000 patients. Exelixis made a grave mistake, but the market’s reaction seems exaggerated and created a buying opportunity in my opinion.

Micromet Unveils Another Fast Route To Market.

Developing oncology drugs is getting harder and harder. The rising regulatory hurdles, the constant flow of new agents and competition for trial participants all make getting a drug to market a formidable challenge. This is particularly true in drugs for blood cancers, a field that saw tremendous progress in the past decade and is becoming very crowded. As a result, even highly effective drugs require long and expensive studies with active regimens in the control arm and survival as an endpoint.

These challenges can be coped with, to some extent, by identifying settings where it is possible to get a drug to market quickly and cost-effectively. These settings should include a small, well defined patient population with limited therapeutic options and an agent with robust activity that could persuade regulators to grant accelerated approval based on a small single arm trial. Micromet’s (MITI) lead agent, blinatumomab (Bmab), is a perfect example of how creative clinical planning can differentiate a product by facilitating quick approval.

Although Bmab has potential across many types of blood cancers, the company focused on specific patient populations and treatment settings that enabled it to avoid the classic development route. Bmab is about to be in two small pivotal phase II trials in ALL (Acute lymphoblastic leukemia), both could generate data in the 1st half of 2013 and potentially support filing. The indications Micromet is going after are certainly not the largest opportunity for Bmab, but they are probably the safest and quickest way to market. Following approval, Micromet will be able to generate cash via commercial sales as well as a licensing deal, which could support expansion into larger indications such as NHL.

New route

Last week Micromet announced that based on feedback from the FDA, a small single arm phase II study could be enough to get accelerated approval in relapse/refractory ALL. Of course, there is no obligation from the regulator’s end, but the fact Micromet is pursuing this path implies the FDA is willing to consider approval, providing results are compelling. Micromet is already recruiting patients in another pivotal phase II trial in ALL where Bmab is given to patients who still have disease remnants in their bone marrow (minimal residual disease or MRD) after conventional therapy.

The new pivotal phase II trial will include 65 ALL patients from the US and Europe, all of whom will receive Bmab. The primary endpoint is complete remission (CR), with response duration and survival as secondary endpoints. This design is extremely favorable for Micromet based on recent results in a similar patient population which included a CR rate of 75%. Although the data set included only 12 patients, this level of activity in such an advanced population is unprecedented.

New competitors

Bmab is an anti-CD19 antibody that can redirect the immune system to attack cancer cells very efficiently. Originally, Bmab’s main competitors were other antibodies targeting CD19. The most advanced of these is Sanofi-Aventis’ (SNY) SAR3419, an antibody drug conjugate (ADC) based on Immunogen’s (IMGN) technology. Initial data from this program was presented last year with clear activity in other blood cancers but it did not include ALL patients. Sanofi just started a phase II in ALL with SAR3419, which should trigger a $4M milestone to Immunogen (expected to be announced shortly).

Since Micromet shifted its focus to ALL, with two ongoing registration-enabling phase II trials, Micromet’s main competitor is now Pfizer (PFE). Following the Wyeth acquisition, Pfizer got inotuzumab ozogamicin, an antibody drug conjugate targeting CD22 that has strong activity in ALL. Data at ASCO 2011 included a 56% response rate in 40 patients. Investigators concluded the data stating that inotuzumab is “likely the single most active single agent tested so far in relapsed/refractory ALL”.

It is too early to pick a winner between Bmab and inotuzumab due to the limited available data. One clear advantage inotuzumab has is its convenient administration (one injection every 3 weeks) in contrast to Micromet’s Bmab which is given as continuous infusion over 4 weeks.  Although Pfizer’s inotuzumab is clearly active and has a more extensive data set, the responses it induces are not necessarily as deep (the criteria to reach bone marrow response in the Micromet study was more stringent) and prolonged as those observed with Bmab to date. In the long run the two drugs could be combined or used in tandem, as each agent binds a different target.

Another potential competitor is Genentech, who also has a CD22 ADC, powered by Seattle Genetics’ (SGEN) technology. It is currently in phase I alone and in combination with Rituxan. The phase I does not include ALL patients but focuses on NHL, however, expanding into ALL is an obvious step based on data with Pfizer’s anti-CD22 ADC. Based on the superiority of Seattle Genetics’ technology compared to Wyeth’s older technology, Genentech’s ADC might be an even stronger contender.

Data flow during 2017

The pivotal trial in relapsed/refractory ALL will join another pivotal study Micromet is running in MRD-positive ALL. The latter could support registration in Europe but probably not in the US. Although the company has not provided specific timelines, both studies should complete enrollment towards the end of 2012. As the primary endpoints in both trials require short follow up (CR rate and MRD conversion rate, respectively), top line results could be available in the 1st half of 2013. It remains to be seen whether regulators demand more matured data from both studies for submission. Since both trials are single arm open label studies, Micromet will have a constant flow of data it may or may not choose to share with investors during 2012.

Micromet’s strategy of targeting ALL as a lead indication enables it to pursue regulatory approval in two treatment lines with minimal time and cost. The two pivotal trials cost several tens of millions of dollars and could open up a market of ~$400M for Micromet in ALL, assuming a certain degree of off label use. Eventually, Bmab will surely face competition but thanks to Micromet’s strategy, it will be the first to get approval for ALL.

Portfolio updates 

3 years after inception, the biotech portfolio managed by Ran Nussbaum and myself is up 90%, which compares favorably to general and healthcare related indices and ETFs (see tables below). We feel comfortable with the three positions in Micromet (account for 10% of portfolio) going into ASH this December.

BMS Zeroes In On Its Next Blockbuster

Last week BMS (BMY) increased its stake in BMS-936558 (formerly MDX-1106) by regaining worldwide marketing rights for the drug except in Japan, Korea and Taiwan. This was the result of a deal with Ono Pharmaceutical, who originally held ex-US rights for the drug. In return, Ono received marketing rights for Orencia, a BMS drug  for Rheumatoid arthritis which is already in the market. BMS’ decision to exchange its stake in a product with real sales in return for a candidate in mid stage clinical development might seem odd at first glance, but a quick look at BMS-936558’s data is enough to understand the deal was a brilliant move.

Like Yervoy but better

BMS-936558 is an antibody against PD-1, a protein involved in repressing the immune system. Blocking PD-1 with an antibody activates the immune system and enables it to fight tumors. This concept has been validated by BMS’ Yervoy, which blocks CTLA-4, another inhibitory protein expressed on immune cells. Yervoy and BMS-936558 belong to the same class of drugs which release the brakes on the immune system, generating an anti-cancer response using the patient’s own immune system. However, they should not be viewed as competitors but as complimentary (BMS is even evaluating the combination of the two antibodies in a phase I).

Yervoy, which recently got approved for metastatic melanoma is expected to generate over $1.5B in sales solely based on the current label. Sales could easily double if Yervoy becomes approved for additional indications. BMS-936558 still has a long way to go and, but based on the limited clinical data it appears more promising  than Yervoy in many aspects.

With respect to efficacy, BMS-936558 has not been evaluated in large randomized trials but it still generated impressive signs of efficacy in multiple indications. The extent of this effect appears superior to what Yervoy demonstrated in early stage trials. Data presented last year at ASCO included a 30% response rate in patients with late stage melanoma or renal cancer, which is very unusual for a single agent. BMS-936558 also had an intriguing signal in lung cancer with a response rate of ~10% and disease stabilization in an additional 40% of patients. It is important to note that response rate is believed to under-represent activity of immunotherapies, as they tend to be more subtle with a durable long lasting effect even after discontinuation of treatment.

Additional potential advantages include a better safety profile compared to Yervoy and the ability to select patients based on the expression of relevant biomarkers. Lastly, from a regulatory and time to market point of view, BMS might be able to get BMS-936558 approved for certain indications (primarily renal cancer) using progression-free survival whereas Yervoy could be approved only based on overall survival.

Increased competition

Anti-PD-1 antibodies are viewed as the next big thing in cancer immunotherapy owing to promising clinical data with BMS-936558. There are two additional PD-1 antibodies in clinical testing: Teva’s (TEVA) /CureTech’s CT-011 in phase II and Merck’s MK-3475 (MRK) in phase I. Last year, GSK (GSK) entered the arena after signing a $500M ($23M in upfront payment) deal with Amplimmune, which is developing drugs that target the PD-1 pathway.

BMS is in a clear leadership position with the most advanced drug, despite being the 2nd company to enter the clinic. Its strategy to go after indications that are traditionally suitable for immunotherapy and show a direct anti-tumor effect should enable it to choose and pursue regulatory approval in a relatively short time. In addition, the experience and expertise gained with Yervoy are extremely valuable.

Route to market

BMS appears to view renal cancer as the initial route to market for BMS-936558, in contrast to its strategy with Yervoy, which focused on melanoma. The company started two phase II studies in renal cancer earlier this year, which could have topline data already in 2012. Renal cancer appears to be a reasonable choice given the impressive signs of efficacy, good track record with immunotherapies and the unique mode of action that is different from that of approved agents (Sutent, Afinitor etc. ).

Additional important data should come from the combination trial with Yervoy in melanoma. Teva could have important results with its PD-1 antibody from a randomized phase II in colon cancer. This will be the first randomized data set with a PD-1 antibody, using progression-free survival as a primary endpoint. This could also be the first clear sign of efficacy for CT-011, which until now has been evaluated in settings where it was impossible to show a clear signal with a single arm study. Merck could also have data from its phase I next year, which started enrolling patients last April.

In summary, BMS increased its exposure to one of the most promising development programs in oncology. There is still a great degree of risk associated with every clinical program, but based on the available data, BMS-936558 has an exceptional risk/reward ratio with a proven efficacy, good safety profile and and a blockbuster potential.

Exelixis – First partnered program enters phase III

Roche recently disclosed a decision to start phase III with GDC-0973 (formerly XL518), a MEK inhibitor licensed from Exelixis (EXEL) to Genentech 6 years ago. The trial is expected to start next month and will evaluate GDC-0973 in combination with Roche’s Zelboraf in patients with BRAF-mutated melanoma. This is an extremely positive catalyst for Exelixis, who now has a second drug in pivotal studies with a high likelihood of success and a substantial market opportunity.

Large commercial opportunity – The commercial opportunity for GDC-0973 in advanced melanoma is ~$1.5B globally, based on pricing and sales estimates for Zelboraf. MEK inhibitors have potential for many additional cancers, including lung and ovarian cancer.

Favorable deal terms – Deal entails a profit share agreement and an option for Exelixis to co-promote the drug in the US. Exelixis is eligible for additional milestones and royalties on ex-US sales.

Short timelines – The phase III trial will start next month with progression free survival as the primary endpoint. Enrollment should be very quick given Roche’s experience in the indication (Zelboraf was the 1st approved drug for BRAF-mutated melanoma) and the fact melanoma patients are routinely screened for BRAF status and treated with Zelboraf. Top line results could be available in mid-2014 and Roche expects to submit the combination for approval in 2014.

High likelihood of success – GSK (GSK) presented phase II results for a similar combination (dabrafenib plus trametinib), which proved superior to dabrafenib alone. Roche reported encouraging results for a small phase I trial for the Zelboraf-GDC-0973 combination in 25 melanoma patients. The combination led to meaningful tumor shrinkage in every patient (see figure below).

Differentiated safety profile – Although safety data are limited, GDC-0973 appears to have a different safety profile compared to GSK’s trametinib. In particular, it does not lead to fever and chills, which were observed in the majority of patients in the GSK trial.

Roche as an ideal partner 

In retrospect, Exelixis could not have chosen a better partner for GDC-0973. On top of being the world’s leader in oncology, Roche is facing a major threat to its position in the BRAF-mutated melanoma market.

As background, Roche pioneered the field of BRAF mutated melanoma with Zelboraf, the first BRAF inhibitor to get FDA approval. Although Roche dominated the market since 2011, it will face fierce competition from GSK, who recently submitted its BRAF inhibitor, dabrafenib, for approval for the treatment of BRAF mutated melanoma. GSK’s Dabrafenib is perceived as equally effective but better tolerated than Roche’s Zelboraf.

Last week at ESMO, GSK reported positive results for the combination of debrafinib and its MEK inhibitor (trametinib). The combination is already in phase III and is expected to become standard of care from 2014 onwards, pushing Roche’s Zelboraf out of the market. The Zelboraf + GDC-0973 phase III trial is Roche’s answer to that threat.

Fortunately for Exelixis, GDC-0973 represents Roche’s main effort to protect its melanoma franchise. This guarantees an aggressive and efficient development program for the drug. Roche is 6 months behind GSK, but positive results should enable it to retain its presence in melanoma from 2015 onwards. In parallel, GDC-0973 is in several early stage combination trials.   

Market ignores a major milestone – a buying opportunity

Exelixis now has a second drug in pivotal studies, in development by a strong  and committed partner. Roche’s commitment, a large commercial opportunity, favorable deal terms and a high likelihood of clinical success, make GDC-0973 an important asset for Exelixis that is still not reflected in the company’s valuation. This creates a buying opportunity, as the market will eventually acknowledge the opportunity as well as the strategic importance of GDC-0973 to Roche.

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.

The GALAXY trial design

 Synta evaluated ganetespib in combination with chemotherapy (docetaxel) for 2nd line NSCLC (non-small cell lung cancer).  The trial is a large (240 patients) randomized phase II study designed as a “signal searching” trial for identifying specific patient populations that are more responsive to the drug. The trial is big enough to detect a signal even in a subset of 20% based on progression-free survival (PFS). Based on the signal in the phase II portion, Synta plans to take ganetespib to phase III in the relevant patient populations.

Originally, there were 2 subsets in which ganetespib had already shown an efficacy signal: ALK mutants and KRAS mutants. As the drug is already being studies in dedicated trials for ALK mutated tumors, the GALAXY  trial focused on other subsets, primarily KRAS mutants (based on early clinical experience) and high LDH (based on preclinical evidence and scientific rationale).

Initial signs of activity

At the interim analysis, the database included 183 patients, with an efficacy signal across three subsets:

  1. Adenocarcinoma subtype (114 patients, 62% of overall population)
  2. Adenocarcinoma subtype with high LDH (31 patients, 17% of overall population)
  3. Adenocarcinoma subtype KRAS mutants (20 patients, 11% of overall population)

In the adeno subset, ganetespib generated a signal in PFS and overall survival. Patients who received chemo+ganetespib had a median PFS of 4.2 months vs. 2.9 months in the control arm. Response rate was also higher in the ganetespib arm (15% vs. 8%). The most striking signal was in the preliminary overall survival analysis, which showed a clear separation between the two arms, which started from day 100. This analysis should be treated with cautious given the low number of events but the trend looks very promising.

In the high LDH and KRAS mutant subsets, adding  ganetespib led to an impressive signal in progression-free survival (PFS). LDH-high and KRAS mutant patients in the control arm had a median PFS of 1.4 and 1.6 months respectively. Patients in these subsets who received chemo+ganetespib had a PFS of 4.2 months, representing a 3 and 2.6-fold increase, respectively. Responses were also more common in the combination arm for both subsets.

Are the signals real?

Subset analysis relies on several factors including sample size, numerical difference, prospective definition of subset and type of endpoint. The 3 different subset analyses presented by Synta look compelling although they vary in terms of data maturity and reliability.

The adeno subset included a large sample size (114 patients, half of whom experienced progression) but the PFS difference was modest and was not pre-defined as a co-primary endpoint. The overall survival signal in adeno patients is early but the separation of the curves looks very promising.

The extent of PFS difference in the adeno group (1.3 months, 45% improvement) might not look impressive at first glance. However, PFS often under-represents the survival benefit of targeted agents like ganetespib. Two examples in lung cancer are Tarceva and Avastin, both of which are approved based a survival advantage. Avastin led to 1.7 month (38%) improvement in PFS with Tarceva adding only 0.4 months (25% improvement).

The LDH and KRAS subsets were small but the magnitude of PFS was impressive (2.5-3 fold increase) and they were prospectively defined. One encouraging sign is the fact that effect size was maintained as the data matured during the past 3 months, according to Synta’s CEO. Although the KRAS subset is the smallest, it is the only one relying on a molecular characteristic of the tumor with a clear rationale and clinical activity for ganetespib in an earlier trial as monotherapy.

No statistical measures were provided by the company, due to the early stage of the data set. Nevertheless, Synta’s decision to proceed to phase III implies that there are at least statistical trends.

Synta vs. Array

In KRAS mutated lung cancer, the most relevant comparator for ganetespib  is AstraZeneca’s (AZN)selumetinib, which I wrote about in my ASCO 2012 summary. Originally licensed from Array Biopharma (ARRY), selumetinib was also added to docetaxel for NSCLC patients with KRAS mutants.

An indirect comparison between the two agents shows a similar PFS benefit over docetaxel, with a ~2.5-fold improvement. Response rate for selumetinib appears higher, but it is unclear whether responses were defined in the same way (confirmed vs. unconfirmed).

Selumetinib’s data set is larger and more mature, automatically making it more reliable.  The difference in PFS and response rate were also statistically significant with selumetinib, whereas there was simply not enough data to evaluate statistical significance for ganetespib. Lastly, the selumetinib trial was a double blind study in contrast to the ganetespib trial, where physicians knew which patients were receiving the drug or placebo. This could have created an investigator bias in evaluating PFS and response rate. Needless to say, updated results for ganetespib could change this comparison to either direction.

Both drugs are expected to enter phase III in KRAS mutants later this year. Since they have distinct modes of action, they could be synergistic in combination. It is unlikely that evaluating the two drugs in combination will occur before they reach the market, as they are running neck and neck towards approval. The only company with an Hsp90 inhibitor and a MEK inhibitor in clinical testing is Novartis.