Is Genmab’s daratumumab the next ibrutinib?

Earlier this week, Genmab (GEN.CO) announced the first J&J (JNJ) – initiated study for daratumumab, an anti-CD38 antibody that already demonstrated phenomenal clinical activity in multiple myeloma. The announcement comes after a drought of more than a year without any new clinical trials or meaningful clinical data. From this point onwards, investors should expect J&J to accelerate daratumumab’s development with a broad and aggressive program, just like it did with ibrutinib.

Accelerated approval possible within 2 years

At Genmab’s recent earnings call, CEO Jan van de Winkel disclosed the 2 companies had several meetings with the FDA in order to optimally design daratumumab’s development program. The program will likely mirror J&J’s strategy with ibrutinib and include multiple pivotal trials as monotherapy and in combination with other drugs.

Similarly to the strategy with ibrutinib, J&J will try to get daratumumab approved as monotherapy in last line patients. Daratumumab’s remarkable efficacy (discussed here), its breakthrough designation and recent experience with other myeloma drugs (e.g. Kyprolis) make such a strategy an obvious choice. If positive, the recently announced trial should be sufficient to win accelerated approval by mid-2015.

The decision to pursue daratumumab as monotherapy should be viewed as an important risk-lowering event since it implies the drug is continuing to show good activity in the ongoing phase I. Nevertheless, it appears that the optimal dosing regimen still needs to be fine-tuned as part of the phase II (possible explanation for why it took more than a year to start the trial). Genmab’s phase I included a broad range of therapeutic doses going up to 24 mg/kg, which is very high for a monoclonal antibody (Most antibodies are dosed at up to 10 mg/kg). The trial evaluated weekly injections, which is relatively frequent and based on the PK data a single shot every 2-3 weeks should be enough to reach therapeutic exposure.

J&J’s next ibrutinib

From a market awareness perspective, daratumumab could replace ibrutinib as the next big thing in J&J’s pipeline. Ibrutinib has been receiving a lot of attention as J&J’s brightest pipeline candidate thanks to unprecedented activity in multiple blood cancers (but not in myeloma). Following its expected approval later this year, ibrutinib will become a “launch” story, prompting investors to look for the next pipeline asset.

Daratumumab appears to have the essential attributes to replace ibrutinib as a first-in-class agent with phenomenal activity and high likelihood for accelerated approval. So far daratumumab doesn’t look as big as ibrutinib in terms of commercial opportunity (~$2B vs. $6B+) but numbers can go up if one assumes using daratumumab as a 1st line/ maintenance treatment or in other blood cancers.

There is no data for CD38 antibodies outside of myeloma but the first company to have results in those indications will be Sanofi, (SNY) whose CD38 antibody ( licensed from Immunogen [IMGN]) is being evaluated in various blood cancers (NHL, AML, CLL) with CD38 overexpression.

Competitive landscape – Better visibility in December

There are 3 anti-CD38 antibodies in clinical development, all being developed by a large partner: Daratumumab (J&J/Genmab), MOR202 (Celgene [CELG]/Morphosys [MOR.DE]) and SAR650984 (Sanofi/Immunogen).

Although daratumumab is the only CD38 antibody with published clinical results, the 2 other programs have been in phase I long enough to generate an efficacy signal (SAR650984 and MOR202 started phase I in 2010 and 2011, respectively). Until phase I results for these programs are available, it is impossible to analyze daratumumab’s competitive landscape.

Anti-CD38 antibodies employ several potential mechanisms including cell-death induction, inhibition of growth signals, inhibition of CD38’s enzymatic activity and effector functions (ADCC/CDC). These have been characterized for all 3 CD38 antibodies, but the contribution of the different mechanisms and whether the antibodies differ in one or more of those mechanisms is still unclear.

The ASH meeting in December may be the first opportunity to see clinical data for MOR202 and SAR650984 as single agents. Genmab will present results from a combination trial with Revlimid. Given both agents are highly active, this trial should yield a very high (80%-90%) response rate.

Celgene playing catch up with J&J (Again)

The huge deal Morphosys signed with Celgene (which I discussed here), the market leader in multiple myeloma, is a strong indication that activity was indeed observed in phase I. This will be the second time Celgene tries to chase J&J with a “fast follower”, although the last attempt hasn’t panned out well.

In 2012 Celgene bought Avila, which was developing a Btk inhibitor (same class as ibrutinib) in phase I. Celgene hoped Avila’s inhibitor, at the time in phase I, would replicate ibrutinib’s activity but to date its efficacy has fallen short of expectations. Unfortunately, Avila’s best asset turned out to be its EGFR program that had already been licensed out to Clovis Oncology (CLVS).

This time, Celgene made the decision based on a more mature data set for MOR202, which was almost 2 years into phase I. Importantly, Morphosys could probably reach therapeutic doses quickly since MOR202 started phase I with relatively high doses thanks to good cross-reactivity in animals as opposed to Genmab and Sanofi who had to use very low doses initially (0.005 mg/kg and 0.0001 mg/kg, respectively).

Summary

I expect momentum to build up around Genmab based on improved visibility and market awareness for daratumumab’s clinical program, increasing hype around CD38 as a target and recognition of Genmab as a true antibody powerhouse with: 1) an approved product (Arzerra, which just got breakthrough designation), 2) a promising first in class CD38 antibody 3) Growing ADC pipeline using Seattle Genetics’ technology and 4) Additional antibody platforms that garner a lot of interest in the industry (Duobody, Hexabody).

Portfolio updates

We are adding another position in Genmab in anticipation of a broad and aggressive development program for daratumumab. We are selling half of our Celldex (CLDX) position and the entire Onyx (ONXX) position for a profit of 754% and 57%, respectively.

Portfolio holdings – Sep 15th, 2013

portfolio holdings- Sep 15th 2013 - after changes

biotech etfs - Sep 15th 2013

80 thoughts on “Is Genmab’s daratumumab the next ibrutinib?

  1. Pardon me its 3am…tired…I meant I liked the selumetinib lung cancer discussion not novartis…they never really got much into 162…cramer gets a lite creepy excited at the very end….funny

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  2. Ohad this is regarding my immu post above hopefully better clarification…..

    The Company’s strength in intellectual property was recently recognized by the IEEE Spectrum Patent Power Scorecards, which ranked Immunomedics tenth in the Biotechnology and Pharmaceuticals category, based on the number and quality of its U.S. patents issued in 2011, as reflected in characteristics such as growth, impact, originality, and general applicability of the patents.The top-10 ranking, above industry giants such as Amgen and Merck, evidences a substantial improvement in the quality and quantity of U.S. patents issued to Immunomedics in calendar year 2011. Every other company in the top 10 has annual sales in the billion dollar range. Considering its intellectual property strength relative to available resources, Immunomedics is the top company in its class.

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  3. Hi Ohad,

    Any opinion on the Hsp90 NSCLC failure from INFI? Does it change your valuation of INFI? More importantly what do you think of SNTAs chances now? Thanks.

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  4. Ohad
    Hsp90: I also have some concerns about SNTA chances.
    Is there any trial with promising results to validate the Hsp90 approach?
    AUY922 from Novartis and Vernalis doesn’t look impressive
    Debio0932 from Debiopharm and Curis after so many years is still in Ph 1
    AT13387 from Astex is in Ph 2 but the Ph 1 results were just OK
    Retaspimycin HCl (IPI-504) from Infinity failed.
    Is there anything else I am missing?
    thanks — andre–

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  5. On ARQL MARQUEE data, results look good to me as well. While management said before that there was “substantial improvement” on OS and PFS in high MET, we now know that results were in fact stat sig (p=.03 on OS in high MET in favor of tivantinib arm). Also, HR=.07. I’m pleased with this data and will continue to hold. Hopefully we see positive impact in share price tomorrow but who knows?

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  6. Hey Ohad
    just wanted to follow up with you about MRTX. You said you were intrigued by the CABO competitor drug. Are you going to look at it more carefully, perhaps write a piece about it?
    Also, given the new glimmer of hope for ARQL, would you add to the position at these levels. Lost what it had gained last week.
    Thanks very much!
    Dan

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  7. I believe long term EXEL my be the best play…p3 for prostate, renal, hcc…and the drug is 100% wholly owned…though any success with these trials and EXEL is unfortunately bought….plus GDC-0973 looks very promising…and if I’m not mistaken, a bit more potent than gsk mek.

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  8. Ohad. I realize the SSS.v claim that it will work with macrophages, highly doubt as cd47 expressed on tumor cells and normal cells, along with other markers.

    This is a scam ro sucker in gullible crowd who think $0.30 stockmis “cheap”. Fools.

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  9. Bridgette, next time you should try and actually do some research before you resort to calling SSS.V longs like myself names. If you had actually done some research, you would have found that a Stanford team (separate and distinct from SSS.V) has already addressed your questions in their research. It still needs to be proven in the clinic, but they have addressed this in their pre-clinical research. Is SSS.V an extremely speculative gamble? Yes, of course. But, I’m long and willing to gamble with a small position here given the small valuation and fact that Stanford has independently validated CD47 target. Also, the private company SSS.V merged with to obtain CD47 asset (Trillium) had a long track record of doing deals with big pharma/big bio. Please tell me how many “scams” can say this.

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  10. MC. I am Canadian and know people involved in the deal and some know company workers . You should do some more work on the company gud luk

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  11. Thanks Bridgette. I’ll take my chances. Apparently you didn’t know about Stanford’s work. Best of luck with EXEL and $1B+ market cap. ; )

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  12. Dan – Unfortunately my schedule didn’t allow me to look into MRTX more thoroughly. Re ARQL, I thought the data was pretty good (especially for Roche…). I don’t plan on buying more for now, waiting to see more data for the earlier stage programs.

    Bridgette – As you know I am an EXEL bull and plan on holding the stock into p3 data, nevertheless, it’s still quite risky as the relevance of bone scan resolution to survival is unclear.

    CD47 is expressed on many healthy tissues, which is clearly a concern but animal data coupled wit the fact that it is not the only inhibitory checkpoint make me believe it will have a therapeutic window. We’ll have to wait and see, though

    Robert – Actually I became less excited about GDC-0973 following a recent publication from Genentech that shows that it is very effective in BRAF mutated cells but not in KRAS mutated cells. This means high likelihood of being best in class for melanoma but not in lung and other indications.

    Sherk – One of the hottest companies out there, very cool bispecific antibody technology. Not sure about their lead program, though.

    Ohad

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  13. Robert – Actually I became less excited about GDC-0973 following a recent publication from Genentech that shows that it is very effective in BRAF mutated cells but not in KRAS mutated cells. This means high likelihood of being best in class for melanoma but not in lung and other indications……………….so being best in class for BRAF in melanoma is a bad thing??…..is the market to small for u?!?

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  14. Ohad
    ECYT: Do you still follow them?
    A couple of days ago they published updated data for their small molecule drug conjugate Vintafolide Platinum-Resistant Ovarian Cancer for Folate-Receptor Positive Tumors. They reported 5.7 mo PFS vs 1.7 mo in FR positive patients (n=26, p=0.01). No data on OS though.
    Pretty good data. What is your opinion? Any chance to get EMA approval?
    thanks –andre–

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  15. I think EXEL will nail down 1-2 more indications….though a high market cap with high outstanding shares, this is going up. If all goes well $30 by mid 2015

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    i know how to save you a lot of work, there is a tool that creates unique, SEO friendly
    posts in couple of minutes, just type in google – k2 unlimited content

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