September 2014 Edition Vol.8, Issue 8

The Catalysts are Coming! The Catalysts are Coming!

The Catalysts Are Coming, the Catalysts Are Coming!

By Neil Canavan


It seems the timing’s just right. Temperatures outside are finally cooling while the oncology market continues heating up; oncology IPOs are swarming like gnats at the beach, and the media can’t get enough of cancer immunotherapies. (See our recent OBR green article for an overview).

To top it off, a flurry of clinical catalysts are expected during the coming months, so, hang on to your portfolio, and enjoy this review of pivotal events poised to move the market.

Midcap Movers

The Company: Threshold Pharmaceuticals

Founded in 2001, San Francisco-based Threshold focuses on targeting the tumor microenvironment. Their lead investigational compound is the prodrug, TH-302, an agent activated in situ by hypoxic conditions.

The Drug: TH-302

Hypoxic conditions are commonly found in tumor microenvironments. When exposed to regions of tumor hypoxia TH-302 undergoes an enzymatic transformation, releasing the DNA alkylating tumor-killing agent, bromo isophosphamide mustard (Br-IPM) from the parent compound.

The Cliffhanger

Upon diagnosis, soft tissue sarcoma patients often have locally advanced disease, are unresectable, and metastatic. “Sarcoma is  a pretty aggressive tumor,” says Barry Selick, PhD, CEO of Threshold. “But if the treatment is really successful you can shrink the lesions enough to enable surgical resection.”

The problem is that no new drug has been approved in the frontline setting in soft tissue sarcoma since the mid-1980s, and the only currently approved drug is doxorubicin, an agent with modest efficacy and significant long-term cardiotoxicities. “Patients can only endure a lifetime exposure of about 6 cycles,” says Selick. “That means even if they respond to doxorubicin and get nice tumor shrinkage, after they complete their 6th cycle they have to discontinue it.”

To address this unmet clinical need, the most advanced clinical study of TH-302 is a pivotal Phase 3 trial evaluating the prodrug in combination with doxorubicin in patients with soft tissue sarcoma. “The more hypoxic the tumor type it is, presumably the more efficacious TH-302 would be against it,” says Selick. “We knew that sarcoma was very hypoxic, and we knew that doxorubicin was ineffective in treating the entire tumor.”

Heading into the pivotal Phase 3 trial Selick also had the confidence boosters of, first, compelling preclinical animal data, and, more importantly, “we had a 91 patient, Phase 2a, single-arm trial in which we showed impressive performance on all evaluated endpoints of patients treated with the combination.”

The Trial: TH-CR-406

Threshold, in partnership with the Sarcoma Alliance for Research through Collaboration, is conducting the TH-CR-406 trial, an international, randomized, pivotal Phase 3 trial enrolling patients with metastatic or locally advanced, unresectable soft tissue sarcoma who are being treated with TH-302 plus doxorubicin versus doxorubicin alone (N=620).

A read out by the independent data monitoring committee (IDMC) is expected in September 2014. The company currently projects that, unless the IDMC recommends the trial end early, the required number of events may be reached in mid-2015, with the primary analysis of overall survival to be conducted in the second half of 2015.

Disease Prevalence: Soft Tissue Sarcoma

The National Cancer Institute estimates that 12,020 new cases of soft tissue sarcoma will be diagnosed in the United States in 2014. Of these, 4,740 patients are expected to succumb to the disease. Internationally, the annual rate of incidence for soft tissue sarcoma ranges from 1.8 to 5 cases per 100,000 individuals.

The Market

Should TH-302 be approved, the market opportunity will be significant. The financial analyst website, Seeking Alpha, declares that Threshold, “is significantly undervalued at its current price…” ($242.9 million market cap, as of 8/8/14). Indeed, under the co-development, collaboration agreement with Merck KGaA, Threshold stands to reap $550 million in upfront and milestone payments if all goes according to plan(s).

This is in line with estimates from Zacks Small Cap Research which predicts a market value of $560 million, or $9.50/share by 2019.

Threshold CEO Selick is also bullish. “The company currently has 11 trials ongoing with TH-302 in a variety of indications, for all of which we have either compelling preclinical animal data, or early single-arm clinical data. This broad portfolio of indications is consistent with the fact that we’re going after a property that is shared by virtually all solid tumors.”

The Company: Sunesis Pharmaceuticals

Sunesis is a clinical-stage biopharmaceutical company focused on the identification and development of small molecules that block cellular pathways necessary for tumor growth and proliferation. Sunesis’ leading investigational candidate, vosaroxin (Qinprezo™), is a first-in-class anticancer quinolone derivative.

The Drug: Vosaroxin

Vosaroxin’s anticancer activity operates through its intercalation into double-stranded DNA, as well as the topoisomerase II (Topo II), an enzyme critical to eukaryotic cellular replication. Because it is mechanistically different from other Topo II inhibitors vosaroxin is thought to not be subject to multidrug resistance pathways.

The Cliffhanger

The pivotal evaluation of vosaroxin is a Phase 3, multi-national, randomized, double-blinded, placebo-controlled trial (dubbed VALOR) of the active drug in combination with cytarabine, versus cytarabine and placebo in patients with relapsed or refractory acute myeloid leukemia (AML).

The current standard induction treatment for AML is seven days of continuous infusion with cytarabine plus three days of an anthracycline. “Younger patients respond fairly well and you even get some outright cures,” says Sunesis CEO, Daniel Swisher, Jr., “but that’s only for about 25% of the induction patients.” The remaining 75% of patients fall into the relapse/refractory category, for whom there are no approved therapies in treatment guidelines. “That’s why we’re trying to address this situation with a new approved standard,” Swisher says.

Of note, the AML study has a so-called, adaptive design. “It’s a cool design,” says Swisher, “It’s done in a way to not break the blind, and it insures that if there is a clinical benefit that we’re well powered to see it.” The adaptive design called for an interim evaluation after 50% of pre-specified events had occurred, at which time the data monitoring safety board (DMSB) could recommend halting the trial for futility, continuing the trial at current enrollment levels, or if efficacy was in evidence, expanding the patient cohort to insure statistical significance.

In September of 2012 the DMSB recommended expansion, adding 262 patients to a total enrollment of N=712.

In early August 2014, the company disclosed that 562 patient deaths had been reached in the trial, thus triggering the analysis of the survival results.  The company has said that top-line results from VALOR are due in the second half of 2014, but biotech pundits predict that an announcement is likely due sometime in mid-to-late September, or possibly October.

Disease Prevalence: AML

The National Cancer Institute estimates that 18,860 new cases of AML will be diagnosed in the United States in 2014, resulting in 10,460 deaths.

Given this patient caseload, and the high rate of treatment relapse, the FDA granted fast-track status to vosaroxin in 2011. This move, followed by the DSMB cohort expansion in 2012 caught investors’ attention.

“(The hedge fund) Visium for example, had a 1%-2% interest in the company and after a week or two after the interim increased to 10%,” says Swisher. “That’s where I take encouragement from the investors side, the smart money has come in.”

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