OncoGenex Retrenches, and Searches for Answers, After Failed Trial

Xconomy Seattle — 

There are several harsh lessons to be learned in drug development, and OncoGenex learned perhaps the most brutal one of all: a knockout Phase 2 trial doesn’t guarantee a thing in Phase 3.

Earlier this year, Bothell, WA- and Vancouver, BC-based OncoGenex (NASDAQ: OGXI) thought it had everything figured out. Its RNA-based cancer drug, custirsen, seemed to be disarming a protein thought to help tumors resist chemotherapy. Take out that protein, and custirsen would make chemotherapy more effective. Patients should live longer. And in fact, patients in Phase 2 trials for prostate cancer on custersin and chemo lived months longer than the average for patients with similar diagnoses and chemo alone. So OncoGenex felt pretty confident about the idea of recreating that trial, just with more patients, and waiting for the confirming data to roll in.

To the stunned disbelief of OncoGenex, however, the trial the company ran—a 1,022-patient study, called Synergy, of prostate cancer patients—flopped. Patients getting custirsen and chemotherapy lived only slightly longer, a median of about a month, than those on chemo and a placebo. The hazard ratio for overall survival was a disastrous 0.93, meaning in a statistical sense, there was barely any difference between the two groups of patients. Droves of investors immediately jumped ship, sending shares down more than 50 percent. They currently trade at just under $4 per share, levels that the company hasn’t seen in more than five years.

OncoGenex isn’t alone here, of course. Plenty of cancer drugs fall flat in Phase 3. A recent study published by Nature Biotechnology, for instance, showed that late-stage oncology trials have the poorest success rate of any therapeutic area. A 2012 article in the Journal of the National Cancer Institute put that Phase 3 failure rate at a whopping 62 percent. Even so, it’s not as common for those failures to follow the kind of mid-stage trial OncoGenex had posted.

Scott Cormack, CEO of OncoGenex

Scott Cormack, CEO of OncoGenex

“I like to follow logical dots. Data have to make sense,” says OncoGenex CEO Scott Cormack. “And when you come up with a result like this, that is very different than your previous experiences, and all of your experiences, you kind of shake your head and go, did we miss something? Or is this the one that is the outlier? Until you figure that out, you continue to lose a little bit of sleep.”

Indeed, the future now looks much tougher for OncoGenex. The company is still plowing forward with two more late-stage studies of custirsen: a test of the drug in prostate cancer patients who have progressed on to their second chemo drug, and a second-line trial for lung cancer. And it’s got a second drug prospect, apatorsen, that it owns full rights to, and is currently being tested in a slew of mid-stage studies. Apatorsen dials back the production of a protein that’s elevated in cancer cells and that helps them survive. The results from early-stage trials of the drug have been promising so far.

OncoGenex isn’t done, not by a long shot, Cormack insists. It failed one of 10 trials. It has plenty more bullets in the chamber.

But the crushing failure has brought a dramatic change in OncoGenex’s fortunes and forced a shift in strategy. Had custirsen succeeded, the company could’ve banked millions in future milestone payments and royalties from partner Teva Pharmaceutical (NYSE: TEVA), and taken its time making a strategic decision on apatorsen. The stock price would have stayed high, making it easy to turn to Wall Street for cash.

Now, however, OncoGenex doesn’t have the luxury of time. Without new financing, the company’s cash will run out after the first quarter of next year—before data come in from the other custirsen Phase 3 studies. So the company needs apatorsen to come up aces when results from the first of that drug’s Phase 2 trials—a bladder cancer study—-come later this year. OncoGenex is thinking about whether it’ll finance, or find a partner, on a more compressed timeframe than it would have before, says Cormack.

So why was OncoGenex’s confidence in the pivotal custirsen trial so badly misplaced? And will the altered strategy work?

Some of the answers lie in the company’s history.

OncoGenex’s story begins in the Prostate Centre at Vancouver General Hospital in Canada, where then-urologist and surgeon Martin Gleave was trying to figure out why cancer drugs stopped working in prostate cancer patients. He banked tumor tissues from surgical procedures he’d perform—prostate or lymph node tissue—on patients in various stages of cancer and treatment. Then he’d look for genes in those samples that seemed to be causing those tumors to fight off the treatment.

He found several intriguing candidates. To test their effects, Gleave ran experiments in which those genes overexpressed the proteins they produced. In some cases, those proteins made tumors resistant to chemotherapy, he found. He then blocked the genes or proteins to see if the tumors would again be sensitive to treatment.

This process turned up two highly promising leads. Blocking either clusterin, a protein linked to cell death, or a heat-shock protein called Hsp27, made tumor cells much more sensitive to chemotherapy.

Gleave and Cormack co-founded OncoGenex in 2000 to develop drugs like these that are supposed to impact treatment resistance. The company cut a deal with Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS) to create antisense drugs based on that thesis. One drug—now known as custirsen—blocks the RNA that codes for clusterin. Another, OGX-427, or apatorsen, grabs onto Hsp27, blocking its action.

Of the two, custirsen came first. But the company faced a decision. Clusterin is overexpressed in a whole variety of solid tumors, so OncoGenex could test it in a number of different cancers. The company decided to start with prostate cancer, though, because it was Gleave’s area of expertise. So OncoGenex set up a Phase 1 study testing the drug in men with early-stage prostate cancer to see if the drug was getting to its target, and blocking the production of clusterin. Mission accomplished: weekly infusions of custirsen knocked down levels of the protein in patients’ prostate tumor cells by a dramatic 92 percent, and in lymph nodes by an even more impressive 98 percent. OncoGenex picked a dose, 640 milligrams, and eagerly started human clinical trials in 2006.

The key questions: Would patients live longer if given custirsen along with chemo? And would the drug work in different cancers? OncoGenex launched five Phase 2 trials in prostate, lung, and breast cancer, testing the drug with chemotherapies like docetaxel and mitoxantrone. All the while, OncoGenex was relatively obscure, a lightly-traded stock with a miniscule price—until December 2008.

That’s when Oncogenex reported the top-line results of one of those Phase 2 trials. In the study, 82 men with terminal forms of prostate cancer were broken into two groups and given either docetaxel and custirsen, or the chemo drug and a placebo (docetaxel, at the time, was the standard of care for prostate cancer). OncoGenex’s drug seemed to be extending the lives of prostate cancer patients, and its stock doubled from about $2 to $4, starting a steady climb over the course of the year. Once the full data from the Phase 2 prostate cancer study were released in May 2009, OncoGenex said that its drug helped men live a median time of 23.8 months, about 6.9 months longer than those on placebo, and even showed it might reduce bone pain—a big side effect men suffer when prostate cancer tumors migrate to the bones. Shares of OncoGenex closed as high as $40.16 on Aug. 31, 2009.

OncoGenex was now in the prostate cancer discussion with more widely-known players like Dendreon (NASDAQ: DNDN), Johnson & Johnson (NYSE: JNJ), and Medivation (NASDAQ: MDVN). And Cormack says the company wanted to make absolutely sure it hadn’t been fooled before forging ahead with a multi-million dollar Phase 3 trial. The company “tore that dataset down to a fairly high degree,” examining things like patient discontinuations, the number of chemotherapy cycles received by each arm, and other baseline characteristics, looking for any biases in favor of its drug.

The conclusion: The drug must have worked. “We looked at that and said ‘wow, that’s worth further development,” says Cormack.

OncoGenex, of course, didn’t have the financial firepower to take custirsen into lengthy pivotal trials. But after its Phase 2 victory, it did have the credibility to shop itself to a partner. So OncoGenex cut a deal with Teva in December 2009. The little Washington State company got $60 million up front, including a $10 million equity investment from the big drugmaker. It handed over worldwide rights to custersin—though it had an option to co-promote the drug in the U.S. and Canada—but in return, Teva agreed to foot the bill for a series of large Phase 3 clinical trials, and pay OncoGenex up to $370 million in potential milestone payments, and additional royalties if custersin could make it to market.

The clinical plan was to essentially hedge a bet on clusterin. The idea was to test the drug at two different times—during the initial chemo and then after patients had failed treatment because their tumors had developed resistance. In addition, trials were planned not just in prostate cancer, but also in lung cancer as well. The two companies ultimately designed three studies for those tasks: Synergy, Affinity, and Enspirit. (OncoGenex and Teva dumped a fourth study called Saturn that was supposed to judge bone pain.)

By far, the trial with the most riding on it was Synergy—which tested custirsen along with first-line chemo, docetaxel. “For the most part,” Cormack says, the trial was the same study OncoGenex carried out in Phase 2, just with a bigger sample size. All it had to do, executives thought, was recreate the same type of results, and OncoGenex would likely have a marketable drug for prostate cancer.

So OncoGenex enrolled patients, and waited…and waited. And a few key things happened along the way. The field for prostate cancer drugs became intensely competitive. Johnson & Johnson’s abiraterone (Zytiga) and Medivation and Astellas Pharma’s enzalutamide (Xtandi) seeped into the marketplace, first showing benefits for prostate cancer patients after chemotherapy, and then before. The paradigm for prostate cancer treatment started to change. Even if OncoGenex were to succeed, the potential market size for its drug became less clear. The share price began to drop. Investors became less convinced that custirsen really had big potential.

Still, any company would prefer market potential questions to efficacy questions, and OncoGenex could at least show its drug had real value if Synergy held up. Even with the other new prostate cancer drugs, custirsen would have a place, Cormack argued, since all drugs eventually lose efficacy .

And then the results came in. On April 28, OncoGenex delivered the bad news. Patients on its drug and docetaxel had a median survival rate of 23.4 months, compared to 22.2 months for patients dosed with chemo and a placebo. The results were “unexpected,” OncoGenex said in a press release, given the “wealth of scientific evidence” supporting targeting clusterin in prostate cancer.

“The hazard ratio part of it was probably the most surprising,” Cormack says.

What went wrong? Cormack and his team now are searching for answers, tearing down the data just as they did in the Phase 2 trials. Among the questions: Was the study “balanced” appropriately? Did the introduction of new prostate cancer meds after the study began have an impact, and if so, what kind? Is there an imbalance in the patients that received one of those therapies? An imbalance in the timing of when they went on to those therapies? Does the changed paradigm of treatment options, for example, mean that chemotherapy is being introduced earlier or later than it was in the case of OncoGenex’s Phase 2? And did all that completely change the dynamics of the study’s control group? Cormack says, for instance, that if docetaxel isn’t used earlier on, then clusterin levels in those patients probably aren’t that high. As a result, the tumors might not have been as resistant to chemotherapy as in the original population OncoGenex thought it was studying.

Of course, regardless of what OncoGenex finds, it can’t change the past. Cormack is adamant OncoGenex isn’t hunting for data that would turn a failed study “somehow into a positive trial.” Instead, the company just wants to better understand what happened.

“The result is the result,” he says. “What we’re trying to do is understand why is this different than what we saw in Phase 2, and [if] it informs anything else we want to do with the drug.”

In looking back, there isn’t anything in particular Cormack would change about the Synergy study given what OncoGenex saw in Phase 2. If anything, he says, an argument could be made that the company should’ve charged right into Phase 3 after it got the Phase 2 data, instead of halting everything while it tried to find a partner. By doing so, OncoGenex might not have had to worry about the abiraterone or enzalutamide effect it’s surmising might have affected the results, because those drugs wouldn’t have been on the market then.

Easier said than done, however. Cormack says OncoGenex would’ve needed a large amount of cash from Wall Street during the peak of the financial crisis to kick off a Phase 3 on its own.

“We couldn’t have found a couple hundred million dollars in the capital markets like today,” he says. “So it wasn’t really a choice to start it earlier—we had to do partnering.”

Where does this all leave OncoGenex? In all likelihood, custersin is probably done as a first-line drug paired with chemotherapy for prostate cancer. But if the scientific hypothesis still holds water—if clusterin is an important target, and if custersin knocks it down—then, Cormack says, then patients whose cancers have built a resistance to one chemotherapy, progressed, and moved to another, should respond. Meaning, at minimum, Oncogenex is hoping that the drug has a future in that niche and that the ongoing Phase 3 studies (Affinity, second-line prostate cancer with cabazitaxel; and Enspirit, second-line non-small cell lung cancer with docetaxel) will prove it.

Still, those are tinier opportunities than what OncoGenex was hoping for. What’s more, the failed study has forced the company to change its strategy. Had custersin succeeded, OncoGenex could count on Teva milestone cash and royalties (though Isis is entitled to a portion of those milestone payments under its licensing deal with OncoGenex). The company’s stock price would’ve jumped, and OncoGenex would’ve had the option to raise cash on Wall Street at a good price, and develop apatorsen from a position of strength.

“You would’ve had different financing opportunities, and you’d probably be less pushed into making earlier decisions on what you do with the apatorsen program, because you have the cash to make decisions and take more time to consider different alternatives,” Cormack says.

No longer. With custirsen’s future uncertain, and OncoGenex’s cash reserves dwindling, its fate now rests heavily on the results—expected later this year—of the first Phase 2 trial of apatorsen, in bladder cancer. The company may have to quickly finance or find a partner.

But despite the big setback, Cormack is steadfast that OncoGenex can pull through.

“It’s biotech and these things happens, and from our perspective, the good thing is, it’s not a single binary event for us,” he says. “You go ‘ok, obviously not what we wanted to see, it’s a surprise, but we do have nine other trials, and we believe in the concepts of what we’re doing with addressing treatment resistance. Let’s go get the answers and carry on.’”

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One response to “OncoGenex Retrenches, and Searches for Answers, After Failed Trial”

  1. WMLRB50bn says:

    If Cormack can explain why no major Oncology player was willing to pony up and why he had to settle for a very unexciting deal with a third rate pharma company, then that would go a long way to help me believe that the data from Ph2 was clean. My guess is that more sophisticated companies saw issues with the Ph2 design and data.