Exelixis following the prostate cancer failure

Yesterday, Exelixis (EXEL) announced Cometriq (cabozantinib) failed to improve overall survival in a pivotal study in prostate cancer. Cometriq is already approved for MTC (medullary thyroid cancer, a rare tumor type) and prostate cancer was viewed as the drug’s most significant opportunity given the large commercial opportunity ($1B+).

Following the failure in prostate cancer, investor focus moves to Exelixis’ MEK inhibitor (cobimetinib, partnered with Roche) and Cometriq in other indications. Although the news are obviously disappointing, Exelixis still has several irons in the fire, which will provide important catalysts over the next 12 months. I previously discussed these catalysts earlier this year. Continue reading

Clovis Oncology – still a long term core holding

Clovis (CLVS) was one of ASCO’s clear losers following safety issues for its lead program, CO-1686. Despite demonstrating robust efficacy in T790M+ lung cancer, hyperglycemia associated with the drug raised concerns about its ultimate market positioning vs. its close competitor, AstraZeneca’s (AZN) AZD9291. Continue reading

2 prominent themes at ASCO 2014

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As expected, the major theme this year was (again) Immuno-oncology with a focus on PD-1 antibodies. Another theme that is gaining momentum is segmentation of tumor types to small niches based on high resolution genomic profiling. This approach can be used to identify a drug’s target population already in phase I, as exemplified by multiple presentations I will discuss below. In most cases, these drugs are ineffective in the general population but highly effective in rare subsets of cancer patients. Continue reading

Drugs to watch at ASCO 2014

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Below is my ASCO 2014 preview (better late than never…). I tried to make this recap as comprehensive as possible but it is practically impossible to cover all the interesting stuff (let me know if I missed anything dramatic). Unlike last year, I decided to group interesting abstracts based on mechanism of action rather than companies in order to provide a more holistic perspective. On top of attending the conference itself, I will try to attend as many analyst events as possible (this year I have Clovis, Roche, BMS and Incyte on my list) and include them in my post-ASCO write-up. Continue reading

Exelixis – Down but not out, plenty of catalysts in 2014

Last week, Exelixis (EXEL) lost 47% after announcing the COMET-1 trial was not stopped for efficacy at the interim analysis. The reaction implies investors were expecting a positive outcome based on experience with other prostate cancer phase III trials that had been stopped early due to efficacy. These include Medivation’s (MDVN) Xtandi and Bayer’s Xofigo.

Even after the disappointing announcement, I still think Exelixis has significant upside potential for 2 reasons: Continue reading

Biotech portfolio update – 2013 summary and 2014 preview

Seattle Genetics (+65% in 2013)

In 2013, Seattle Genetics’ (SGEN) Adcetris reached market saturation in its approved labeling (relapsed/refractory HL), shifting market attention to label expansion. These include DLBCL, where Adcetris showed impressive efficacy in highly refractory patients (42% response rate, PFS of 5 months) and CTCL (73% response rate). Adcetris is in phase III for earlier stages of HL as well as CTCL, which are viewed as the next opportunity to grow sales. The company will outline its registration strategy for DLBCL in early 2014. Continue reading

Clovis Oncology – A buying opportunity following the EOS deal

Last week, Clovis Oncology (CLVS) announced the acquisition of EOS, a small Italian company with an oncology program in phase II. To me, this is the smartest deal in 2013 so far given the relatively low price ($200M) Clovis paid for a mid stage oncology asset with a strong clinical proof of concept and a clear differentiation from competition. Clovis has commercialization rights for US and Japan while Servier has EU+ROW according to a previous licensing agreement with EOS. Continue reading

Top picks for ASH 2013

The annual ASH (American society of hematology) meeting will take place next month in New Orleans. Based on the abstracts that were released 2 weeks ago, it seems that after 2 phenomenal years of introducing novel mechanisms, this year’s meeting is going to be more on the evolving landscape in each segment (Btk/PI3K inhibitors, antibody drug conjugates, myelofibrosis, CD38 antibodies, chimeric antigen receptors etc.).

Below are my top picks.   Continue reading

2 affordable biotech IPOs – Ambit and Esperion

2013 will be remembered as one of the strongest years for biotech IPOs, with over 30 successful offerings year to date. A lot has been written on the biotech IPO boom and what will be the long term consequences. My personal view is ambiguous. On the one hand, most if not all of the companies that went public are “IPO worthy”: They are innovative, address medical unmet needs and are run by capable management teams. On the other, I find it extremely hard to justify the valuations of many of the companies. What is even more frustrating is the fact that the ones with the most exciting technologies and belong to my coverage universe are also the most ridiculously priced. Agios (AGIO), Oncomed (OMED), Blue Bird (BLUE) and Epizyme (EPZM) are all good examples for great companies whose stocks are way too expensive. Continue reading

Biotech portfolio update – Array, Morphosys, Onyx and Synta

Array Biopharma – Following Puma’s footsteps

Last month Array Biopharma (ARRY) announced a licensing deal with Oncothyreon (ONTY) for ARRY-380, a selective HER2 kinase inhibitor for the treatment of HER2+ breast cancer. ARRY-380 is regarded as an insignificant program, evidenced by the modest deal size ($10M upfront) and the lack of market reaction, but this could change once investors make the connection between ARRY-380 and  Puma Biotechnology’s (PBYI) neratinib (EGFR/HER2 inhibitor). Although neratinib is more advanced, backed by more clinical data and probably has broader potential, ARRY-380’s selectivity profile could differentiate it in certain clinical settings. As the market is clearly excited with neratinib (Puma has a market cap of ~$1.6B), some of the excitement could eventually be tunneled toward Array as well. Continue reading