OncoGenex Waits, and Waits, For Data on Prostate Cancer Drug
Pity Scott Cormack. As the CEO of an aspiring prostate cancer drug developer, he’s got to answer to the masters at the FDA and the cancer physicians who want unequivocal, long-term data to prove his company’s product works. His other masters, those on Wall Street, want to know the answer by next Monday.
Naturally, Cormack and his team at OncoGenex Pharmaceuticals took the only sensible option they had, aiming to create a rock-solid data set. But that means that its investigators, employees, patients in trials, and its investors are all going to have to do something so unusual in our age of instant gratification—they have to wait.
To make matters worse, Cormack, 46, has had to watch as no fewer than five competitors have made leaps ahead in the treatment of prostate cancer over the past couple years, while his most important trial has been enrolling, enrolling, enrolling patients.
As Bothell, WA, and Vancouver, BC-based OncoGenex (NASDAQ: OGXI) prepares for its second quarter financial update today, there’s little it can say that will steal back the buzz. The OncoGenex storyline hasn’t changed much in the past couple years. This little company of about 40 employees, with no drugs yet on the market, placed its biggest bet in September 2010 when it started a 1,000-patient clinical trial called Synergy. It expects to spend a little more than two years enrolling patients, and will need to do another year of follow-up analysis to see how well patients do on the new drug versus those in the control group. The answer from the study is expected before the end of 2013. That means OncoGenex could end up spending 1,200 days of waiting in suspense—give or take a few hundred days—to see whether its drug can help men with terminal prostate cancer live a few months longer with a reasonably better quality of life.
If OncoGenex nails that clinical trial, it will at least be in the conversation with higher-profile companies like Seattle-based Dendreon (NASDAQ: DNDN), New Brunswick, NJ-based Johnson & Johnson (NYSE: JNJ), San Francisco-based Medivation (NASDAQ: MDVN), South San Francisco-based Exelixis (NASDAQ: EXEL) and Norway-based Algeta. Until then, there’s just not going to be a whole lot to get analysts excited about. So until those results arrive, OncoGenex continues to putter along with a market valuation of about $200 million, and average trading volume of a puny 50,000 shares a day.
“It’s all catalyst-driven in the stock market,” Cormack says, with a shrug, acknowledging the lack of an instant catalyst. “As you go into these big Phase III trials, they take a few years to accrue and get data.” Translation—everybody is just going to have to wait a while for the precious data.
OncoGenex has sought to maneuver into a niche so its drug, custirsen (pronounced CUE-stir-sen) can be approved by the FDA, and have a shot in the marketplace. Other companies like J&J, Medivation, and Dendreon, are going after a larger pool of patients who have stopped responding to traditional hormone deprivation therapy, but who haven’t yet progressed all the way to chemo—the so-called “pre-chemo” population. Some of those drugs and others have been tested in the last-ditch patient population, among people whose disease has gotten worse after chemo—the so-called “post-chemo” population. OncoGenex is one of the few aiming to position itself in the middle, with a treatment that’s taken in combination with chemotherapy, which you could call the “with-chemo” population.
One of the big risks for OncoGenex is that the other companies will make so much progress in the “pre-chemo” population, that there may not be that many patients left to sell to in the chemo population. Dendreon and Johnson & Johnson have shown in company-sponsored clinical trials that they both can extend lives by a median of about four months, and Medivation is positioning itself to possibly upstage both of those companies in that patient group. Plus, since many men with advanced prostate cancer either choose to forgo chemotherapy because of the side effects, or can’t take it because they’re too frail, it’s an open question how many patients would opt for the OncoGenex treatment in tandem with chemotherapy. Cormack says as many as 50 percent of men eligible for chemotherapy end up getting it, which he says translates to an addressable market of about 34,000 men in the U.S.
Given how much improvement has been made for prostate cancer patients, there’s a good chance many of them will end up dying from some other cause before they end up progressing to the point of considering a chemo drug combined with the OncoGenex product, says David Miller, the president of Biotech Stock Research in Seattle.
Miller follows prostate cancer drugs from the other companies, but not OncoGenex, partly for that reason. “The [OncoGenex] drug may or may not be a good drug,” Miller says. “I really question whether there’s a substantial market there.”
Still, that question will take on greater urgency two or three years from now if OncoGenex is successful. Before digging into that further, a little bit of science and medical background is required to understand what’s interesting enough to keep OncoGenex in the hunt.
OncoGenex and its partner, Israel-based Teva Pharmaceuticals, began collaborating back in December 2009 on the plan to co-develop custirsen for advanced prostate cancer. The OncoGenex drug is designed to work differently than all the others made by the competition, as it is genetically engineered to block RNA that gives rise to a protein called clusterin, which is thought to help tumors resist chemotherapy. OncoGenex’s bet is essentially that by disabling the clusterin tumor defense mechanism, a proven cell-killing chemotherapy agent like docetaxel ought to be even more effective at killing the cancer cells.
OncoGenex has some impressive data to support its concept. When given in combination with docetaxel chemotherapy in a study of 82 men, the OncoGenex drug helped men with terminal prostate cancer live a median of 23.8 months, about 6.9 months longer than they did on chemo alone, according to data presented at the American Society of Clinical Oncology’s annual meeting in 2009. Patients in that study, and across an array of five other studies, also showed signs of having reduced bone pain, which lasted for as long as three months of observation. That is a big deal, because men with this terminal form of prostate cancer often suffer as the tumors migrate into the bones, causing pain that’s so severe it can’t be consistently controlled with opioid-based pain medications like morphine.
OncoGenex believes it has a good scientific explanation for this, as its infusion drug has shown a good ability to be distributed into the bones, and the clusterin molecular target is overexpressed in bones. That means there’s a good chance the drug is seeping inside the bones, enabling chemo to penetrate in there and kill those particularly nasty tumors.
Getting really solid answers to questions like this take a lot of time, money, and risk. Back in 2010, the company designed a pair of clinical trials—called Synergy and Saturn—that were supposed to answer whether the drug can help men live longer, and reduce bone pain? OncoGenex ended up having to shut down the Saturn trial after finding it couldn’t get a consistent reading on baseline pain levels of patients, since it fluctuated so much during a one-week lead-in period to the trial. So OncoGenex and Teva, knowing that it would be easier to confirm the benefit of the Synergy trial with another study designed to measure survival time, replaced the 300-patient Saturn trial with a 630-patient trial called Affinity.
The main difference with the Affinity trial is that it was designed to combine OncoGenex’s drug with a different chemo agent, Sanofi’s cabazitaxel (Jevtana), and to recruit even sicker patients getting their second round of chemotherapy. While that Affinity study is going to take even more time and money to yield a result, OncoGenex is hoping that the results will be strong enough from the first trial that regulators will want to clear it for sale on that basis alone.
OncoGenex’s Synergy study uses the same combo of drugs, same schedule, and the same doses that it used in the earlier study that suggested such a strong survival advantage of 6.9 months, Cormack says. One difference is that new patients enrolling in this trial could have been previously exposed to some of the new agents like Dendreon’s sipuleucel-T (Provenge) and J&J’s abiraterone (Zytiga). Years have also gone by since the patients enrolled in the earlier study, so other factors could be at work to improve the life expectancy of patients who enroll today. The company will be able to declare success if the ongoing study improves survival time by about 15 percent over chemo alone, Cormack says. That means if you assume patients in this population will live about 20 months on chemo, then they’ll need to live about 23 months on chemo and the OncoGenex drug.
Until an answer like that arrives, OncoGenex just has to keep toiling on all kinds of behind-the-scenes work all biotech companies must do, Cormack says. The company has invested in a second drug, OGX-427, that gives the company another drug in its pipeline to work on besides custirsen. OncoGenex also raised about $54 million from investors in March to finance its clinical trials, and provide enough of a cash cushion to run the company into 2015—at least one more year after the critical results from the Phase III Synergy study arrive.
If the results are bad, the questions around OncoGenex will be about what else it has in the pipeline to remain viable. If the results are good, then the questions will be about regulatory filings, the size of the patient population, marketing strategy, competitive positioning, and potential expansion opportunities beyond prostate cancer. The data that will influence all of those factors just won’t arrive until the second half of 2013. It’s a moment Cormack says he’s looking forward to. “That’s obviously going to be a turning point for the company,” Cormack says.
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