Reviewing data for cabo and Opdivo in renal cancer

Yesterday at the ECC meeting, BMS (BMY) and Exelixis (EXEL) presented data for their respective drugs ,Opdivo (nivolumab or nivo) and cabozantinib (cabo) in renal cancer (RCC). Before delving into the inevitable comparison, it is important to note that cross-trial comparisons are tricky and it’s impossible to definitively say which drug is better without a direct comparison in the same study.  Nevertheless, the studies were very similar in terms of patient population, control arm and prior treatment lines so as far as cross-trial comparison goes, this is as good as it gets.

Overall survival – Opdivo improves overall survival and cabo is very likely to do so as the data mature. The magnitude of benefit appears similar with a numerical advantage for cabo (needs to be validated)

Opdivo demonstrated a 5.4-month survival benefit (25 vs. 19.6 months) over Afinitor with a hazard ratio of 0.73 that was statistically significant (p=0.002). Cabozantinib’s data set was immature so median survival values are not available but there was a strong trend favoring cabo with a hazard ratio of 0.67 on the verge of statistical significance (p=0.002). This is also clear from the survival curves which already start to separate after 4 months (see below). Given the strong signal, cabozantinib has a high likelihood of demonstrating a statistically significant survival benefit at the next analysis (expected in 2016).

METEOR - survival

Source: Choueiri TK, NEJM 2015

Progression-free survival – Cabo wins but what matters is overall survival

Cabo improved PFS whereas Opdivo did not but given the strong survival benefit for both drugs, the relevance of PFS is unclear. As I previously discussed, PFS has been regarded as the basis for approving most RCC drugs to date as it was viewed as a surrogate endpoint for overall survival. In Opdivo’s case, this hypothesis proved incorrect.

Safety profile – Opdivo is clearly a safer drug but dose reductions should allow physicians to keep patients on cabo until progression

Safety and tolerability is going to be a major topic going forward, as the two agents have very distinguished profiles. The way the studies reported adverse events makes it challenging to compare the two agents but it is clear that cabo has more tolerability issues. Compared to Afinitor, cabo had led to a higher incidence of most toxicities (GI, appetite, Palmar-Plantar, hypertension etc.). In contrast, Opdivo had a lower incidence of adverse events almost across the board compared to Afinitor.

Surprisingly, treatment-related discontinuation appears only slightly more common with cabo than with Opdivo. This is explained by physicians’ ability to reduce or interrupt dosing while keeping patients on the drug. Although dose reductions occurred in 60% of patients who got cabo, only 9% discontinued, demonstrating that with a daily oral pill it is possible to find an optimal dose without stopping treatment.

Market positioning – Opdivo will dominate 2nd line RCC but virtually all patients will require 3rd line options, where cabo is ideally positioned

From a clinical perspective, both drugs should be viewed as major breakthroughs. Opdivo is the first drug to demonstrate a survival benefit in the general RCC population. Hopefully, cabozantinib will be the second agent to have a survival benefit in its label with more follow up. Consequently, both agents are likely to be used sequentially in the 2nd/3rd line setting after Sutent /Votrient. Going forward both agents may be used in combination although previous experience with Opdivo and other kinase inhibitors revealed a problematic safety profile.

As can be seen in the summary table below, the two drugs are quite similar in terms of most clinical endpoints (survival, response rate, treatment discontinuation). At the end of the day, Opdivo is better positioned because it has a confirmed survival benefit (based on a more mature data set) whereas cabozantinib has a strong survival trend with a better hazard ratio that requires validation. Opdivo has a superior safety profile even though cabozantinib-related toxicities can be managed with dose reductions that minimize discontinuations. Lastly, Opdivo has the advantage of being branded as “immunotherapy” whereas cabozantinib belongs to an old class of drugs (kinase inhibitors) with many approved drugs.

cabo vs. nivo

Portfolio holdings – September 27, 2015

Portfolio - 27-9-2015biotech etfs - 27-9-2015 

82 thoughts on “Reviewing data for cabo and Opdivo in renal cancer

  1. Hi Ohad,
    Wondering if you can provide your current thoughts on CLDX. Last time I can find you mentioning them is he ASCO preview:
    “Celldex will report updated survival data for its EGFRvIII vaccine (rindopepimut) in GBM (#2009). If the survival benefit reported in November is corroborated, the trial may be sufficient for accelerated approval.”
    Since then a major sell off after the June 29 announcement of no early P-III termination grant by regulators, followed by the general sell off. From a range around $25 this spring/ summer to a low of $10 before a recent bounce to $13 does the risk/ reward seem favorable from the data so far? Interim data release anticipated sometime Nov. to Jan. from what I can tell.
    Thanks as always


  2. Ohad
    thanks for the frank MRTX answer. You said that you prefer LOXO.
    LOXO will present additional Phase I data on LOXO-101, (potentially best in class TRK inhibitor ??), at next month’s AACR-NCI-EORTC – November 5-9, 2015.
    Is it a good idea to buy some shares before the meeting? The company is 330M with 100M in cash.


  3. EXEL What can we interpret from the sale of expiring options by Dr. Lamb, preplanned sale due to the expiry date date of October 17, and nothing else. Do you think the increased short interest is a sign of manipulation to put more pressure on management to do a partnership or just correlated to increase short interest in the IBB index.


  4. Hi Ohad,

    you have a opinion to Genfit ($GNFT), french NASH player. They a good drug in pipeline which soon goes in p3 and maybe “better” than Intercepts ($ICPT) OCA with significant safety issues.

    Greetings, n0cturne


  5. ARQL When do you think is the next catalyst, and when are Tivantinib resutls expected ? I would assume it is better to sell after the next catalyst and before Tivantinib resutls come out.


  6. EXEL When do you anticipate the combo study with PDL1 to read out, and do you think they will wait until the results of this are out before doing a JV ?


  7. dave (ESPR) – Dezima was acquired for $300M plus $1B in milestones so I use 2-3 fold premium as a minimum valuation and add ESPR’s cash, which brings us to almost $1B . This is the very conservative takeout price, I believe actual price could be much higher.

    James – This is a good idea in principle but there are very few pure play immuno-oncology stocks. This approach may work better with gene therapy where there are many relevant stocks.

    Jeff (CLDX) – Despite the drop I don’t plan to get back in as this is a high risk program especially after the interim analyses did not result in a stat sig result.

    andre (LOXO) – If i had to choose I would go with LOXO but I still think it’s expensive. The drug is still in P1 and market potential is unclear.

    curiousgeorge (EXEL) – Don’t think this means everything.

    n0cturne (GNFT) – I don’t think it’s a better drug than ICPT’s drug.

    curiousgeorge (ARQL) – The next catalysts are updated data for 087 (FGFR) and 092 (Akt) in their respective studies. It will be important to validate initial signals the company observed in order to increase visibility. Tivantinib should have a first interim analysis next year (should announce completion of enrollment before).

    EXEL – The trial started recently so I don’t think they will have meaningful data. I don’t think they will wait for these data to partner the compound /sell the company. btw, I am concerned about the safety profile of this combination and am not sure the two agents can be combined.



  8. Ohad, thanks for the LOXO response.
    In the past you commented about ADRO as too risky in pancreatic cancer.
    But recently there are some interesting development.
    They just started Phase 2 with INCY – LADD+IDO1 vs LADD vs IDO1 in Platinum-resistant Ovarian Cancer. Plus collaboration with Novartis and Janssen may validate the technology.
    What do you think about their science – LADD – looks very intriguing.


  9. Hey Ohad
    hope all is good.
    I wonder if you could comment on CYAD, and especially their p3 cardio study is due in 2016… the company valuation seems low compared to peers. How do you rate their chances of success?
    Also, you added 3000 shares of ARQL recently, what is the potential here? how high could the valuation rise if the next events prove positive?
    Regarding BIS and the biotech sector, are we going to keep swinging back and forth? Do you still see BIS reaching 50 sometime in the next 6 months? It seems that nobody knows exactly in which directions things are going… tug war between bulls and bears, a lot of day-traders in this market…


  10. EXEL When do you think Roche will post Cobi results for MEK combinations with their drug in other diseases. If Cobi works in other indications it can increase the revenue significantly potentially giving EXEL an added valuation. What is best case scenario for added valuation if Cobi works in all clinical trials for additional indications.


  11. n0cturne (GNFT) – Yes, I just don’t think the drugs are comparable. If I had to choose I would with ICPT despite the high valuation.

    Dan –
    CYAD – Sorry don’t know them well.
    ARQL – The stock is still flying under the radar and is ignored by most investors so the upside here is very significant imo (and so is risk…). Positive catalysts, which include validation of efficacy signals for 092 and 087 in their respective populations, may lead to two registration trials for niche indications. My investment hypothesis relies on this transition which should result in a major re-pricing (2 wholly owned programs for biomarker defined tumors). Proteus syndrome is a smaller opportunity (<80M) but given the low market cap and the unmet need even a PD signal in patients may be an important catalyst.
    BIS – I plan to hold it in the coming months as I don't believe the correction is over. I do plan to get into stocks with clear catalysts that I view as undervalued in parallel.

    curiousgeorge (EXEL) – I expect a deal to be announced in the coming months as they will probably like to have someone handling the international filing. Given their low market cap I think an acquisition makes more sense here.
    Regarding cobi, on paper the potential is huge as there are many tumors with RAF/RAS dysregulations but I wouldn't count those indications in unless there is compelling data.



  12. EXEL Do you think Cobimetinib is sure approval ? Also, most likely they will want to see Cobimetinib data for other indications before selling out so a partnership would make more sense for the company given the low market cap. If they do a JV this year, do you still expect a buyout next year or that will then be most likely pushed out further ? What would be the incentive of let us say Roche looking to buyout EXEL for example Roche who already owns half of Cobi to partner with Exelixis now and then buy them out for a higher price. From that perspective Exelixis might get a different JV partner other than Roche because their interests will be aligned solely based on Cabozantinib’s potential.


  13. curiousgeorge (EXEL) – Yes I think cobi has a very high likelihood to get approval in melanoma given the recent OS update and the experience with Mekinist.
    With respect to a deal, I don’t think it will revolve around cobi since cabo is seen as the primary value driver (EXEL owns global rights there).
    Although it makes sense for Roche to acquire the full cobi rights, I am not sure they view cabo (a multi-kinase inhibitor) as a good fit (although their are clearly active in uro-oncology).

    I plan on holding until the deal is announced as they way I see it there is very limited downside risk with practically no major negative announcements could come in the coming months.



  14. Good durability data for GNCA on herpes; bad news on pneumonia. Assume it’s still a hold for you? Looking forward to your blog article on GNCA Thx.


  15. Hi Ohad,

    (IMGN) Any thoughts on the GATSBY failure? They were looking for OS vs a taxane control in gastric cancer and it didn’t meet this endpoint.

    (EXEL) Do you think Cabozantinib has any hope of capturing any market share in differentiated thyroid cancer now that Lenvatinib has passed its P3 for second line treatment?



  16. Ohad

    You have been right on target with your bio correction that you had predicted a couple months ago, and you just recently stated that even with this 20+ percent correction that there could be more pain ahead. what signs will you be looking for to change the negative sentiment that has overtaken the sector and start to see a leveling off of stock prices.


  17. EXEL Assume Cabo gets a JV this year, and Cobi comes positive in phase 1 by this year as well what valuation would you put on EXEL


  18. cg (GNCA) – Still haven’t decided…

    Wildbiftek –

    IMGN – Very disappointing although the commercial implications on IMGN are limited. Market cap is predominantly based on IMGN853.

    EXEL – I don’t expect any revenues in thyroid cancer beyond MTC.

    Dave – Thanks. It’s always hard to predict market behavior. My hypothesis relies on the assumption that after several years of record breaking performance and valuations which are hard to justify with commercial metrics, a serious correction is needed. imo we are still in the midst of it and I would wait until we see a really negative sentiment (especially within generalists), re-pricing of biotech stocks and significant slowdown in IPOs. To me, that would be the right time to get back in full force.

    curiousgeorge (EXEL) – If EXEL decides to do licensing deal for ex-US rights than it should be traded around $2.5B (assuming reasonably positive sentiment around cobi and an OS benefit for cabo in RCC).



  19. Hello Ohad,

    isn’t XENE at present relative cheap after Genentech has advanced a second Nav1.7 inhibitor into clinical development?



  20. TRVN – Listened to the investor presentation. Thought it was very strong, particularly with the slides, which provided a lot of color and will hopefully be available for download shortly.


  21. AUPH
    Voclosporin – Starting to get data on the trial and expecting 8 week data collection around second week of January 2016 followed by a 24 week data collection then with a 24 week data release expected in summer of 2016.

    data encouraging!! Would have loved to see more patient level data though. Videos from Rome conference will be online in a few days.

    Ohad, do you still see a B/O possibility – maybe by GILD? I love this stock, but missed the entrance several times


  22. Hi Ohad, I’m a long time follower and really appreciate you taking the time to provide such valuable information. I have only asked 1 question and it was in regards to VSTM. I want to thank you and your opinion was absolutely correct.

    Anyway, you have stated several times you cannot comment on CAR T companies like JUNO ETAL…because of your relationship with KITE.
    Instead of asking about a specific company, are there any good blogs/resources you can point me to regarding this field. I’m also interested in gene therapy companies. Are you able to give your opinion on compaies like BLUE?


  23. Hi Ohad,

    Seems MRNS delayed the data readout of P3 from Q1 to mid 2016. But does that justify the big drop? Do you plan to add more in the near future?



  24. (mrns) I have seen sage’s drug in action and there is a clear need for drugs to stop status. I think pre-clinical data is stronger for MRNS, but sage is ahead in clinical development.


  25. Christian (MRNS) – The PCDH19 data are positive but very preliminary and hard to assess without longer followup. I wouldn’t ascribe value to this indication for the time being.

    Toby (XENE) – Yes I think they’re cheap although it is not clear whether the more advanced programs has any issues.

    Paul B (TRVN) – Thanks, I still didn’t have a chance to listen to the webcast but looks like they are on track across all fronts.



  26. n0cturne-

    AUPH – Very important catalyst which is predominantly ignored by the market. I think they have good chances of a positive outcome.
    MRNS – Agree data are encouraging but I would have waited for more folowup and patients.
    CLVS – Yes I still think it’s an attractive M&A target, especially if lucitanib demonstrates good activity at SABCS next month. Gilead sounds like the perfect acquirer. I wouldn’t rule out others like Roche.

    Chris (ONTY) – I am still waiting for more data on ARR380, so far results are inconclusive imo.

    jh (MRNS) – This is very surprising to me, they are making a lot of progress and valuation gap with SAGE is still very significant. I am looking forward to see the preclinical package for IV ganaxolone, don’t know if you can say it’s superior to SAGE-547 as each company emphasizes its alleged superiority . Surprised they are not pursuing PPD with the oral formulation. Agree about SAGE being ahead but it looks like ganaxolone is at least comparable and can beat SAGE to markets where oral administration is preferable.

    Jun (BLUE) – Thanks. Yes I can discuss gene therapy companies like BLUE, which I really like and currently considering as a new investment. Too bad there is not a gene therapy ETF.

    Cloud (MRNS) – Delays are always negative but I still think the stock is cheap given the early stage programs for both oral and IV ganaxolone. Will ad more if stock drops to 5.



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