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).
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).
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