For part I click here
On top its JAK programs, Incyte has been developing two additional programs it intends to out-license. The first program is INCB13739 for diabetes, which already reached clinical proof of concept and could be licensed imminently. The second program, INCB7839 for breast cancer, is less advanced but could become very interesting later this year depending on data from an ongoing trial.
Earlier this month, Micromet (MITI) concluded an impressive public offering of $75M, approximately 20% of the company’s market cap. The offering illustrates the transformation the company has undergone from an anonymous biotech play into a recognized industry leader. This is also echoed by the growing attention from Wall St. When I first wrote about Micromet in 2007, the company was covered by a single analyst, RBC’s Jason Kantor, who was one of the first to see the potential in Micromet’s platform. Today the stock is covered by six additional research analysts.
A drug with an almost certain approval and immediate sales potential of hundreds of millions of dollars is an asset very few biotech companies possess. In that sense, Incyte (INCY), which is developing a breakthrough drug for blood disorders, represents a unique opportunity in an industry plagued by risk and uncertainty. Incyte is also unique in its problematic capital structure, which makes an otherwise simple investment decision into a tricky one.
The past 12 months have been anything but boring for Micromet’s shareholders (MITI). Last summer, Micromet’s stock climbed to $7 following excellent clinical data (discussed here) and a landmark publication in Science Magazine (discussed here), but since then the company has lost half of its value. Volatile trading is quite standard for small, cash burning biotechnology companies, however, Micromet’s case was particularly frustrating.
Micromet invented a new class of antibodies it calls BiTE (Bispecific T-Cell Engager) antibodies. Unlike conventional antibodies, BiTE antibodies bind two targets, the first target is presented on a cancer cell and the second is presented on an immune cell. The simultaneous binding of both cells by the BiTE antibody can redirect the immune cell to attack the cancer cell, thus exploiting the body’s natural immune mechanisms to fight cancer. Conceptually, a BiTE antibody is similar to cancer vaccines, which also aim at producing an immune response against tumors. Despite a history of failures in the field of immunostimulating antibodies, it looks like Micromet has found the right formula.
There is always a debate regarding market efficiency and to what extent stock prices represent the available information about a company. Micromet’s (MITI) surge last week shows that in some cases, the market is far from being efficient. The spike of more than 35% in the last two trading sessions is attributed to the publication of a short article in Science Magazine, one of the world’s most prestigious scientific journals. The article contained clinical data from an ongoing phase I trial of Micromet’s lead candidate, MT103 (partnered with Medimmune). The data was spectacular, showing a strong, dose dependent response in concert with a good safety profile, exactly the kind of data that can put a small biotech in the spotlight. Ironically, the article contained data which has already been presented more than two months ago at the ICML in
Regardless of whether market reaction was justified, publishing clinical data at such an early stage in Science should be viewed as an indication for the scientific community’s embrace of Micromet and its BiTE platform. The BiTE platform relies on monoclonal antibodies for stimulating the patient’s immune system to attack cancer cells that have managed to evade or suppress the body’s immune response. Although most attention is given to the first product from the platform, MT103, it can generate an unlimited number of agents against a variety of cancers, making it a potential revolution in the way cancer is treated.
Forty years after the accidental discovery of their anti-cancer properties, platinum based compounds represent one of the most important classes of oncology drugs. Platinum compounds are effective in treating a wide array of malignancies including lung, ovarian and colorectal cancers. Cisplatin was the first approved platinum drug (1978) followed by carboplatin (1989) and oxaliplatin (2002), which together generated annual worldwide sales of approximately $3 billion in 2007. These drugs exert their antitumor activity by binding to DNA and interfering with DNA replication, ultimately leading to cell death.
Despite their impressive activity, platinum drugs suffer from two primary drawbacks. The first drawback is the appearance of undesirable side effects and toxicities. Cisplatin often leads to kidney toxicity, while carboplatin and oxaliplatin often lead to bone marrow and nerve toxicities. The most urgent safety issue is the nerve toxicity caused by the use of oxaliplatin in colorectal cancer, as it sometimes forces physicians to stop the administration of the drug. The second drawback of platinum compounds is the emergence of platinum resistance in most patients during or following treatment. These patients stop responding to treatment after an initial response within several months of initial treatment. Moreover, some cancers are inherently resistant to platinum even before being exposed to platinum drugs. Fortunately, many resistance mechanisms tumors utilize to block the anti-cancer effect of platinum drugs have now been elucidated, and this knowledge will hopefully provide the basis for the development of the next generation of platinum drugs.
Chemotherapeutic Drugs in The Clinic – Competitors or Potential Partners?
Obviously, SGN-33 was not directly compared to any other agent, so insight gained from comparing SGN-33 to other agents from different clinical trials is far from being conclusive. In addition, a comparison of a naked antibody (that will likely be given in combination with other drugs), to other chemo and combination regimens is not a fair one. Nevertheless, these comparisons are the only means researchers and investors alike have when evaluating the prospects of SGN-33.
The efficacy/safety ratio of SGN-33 is very impressive when compared to available treatments as well as other treatments currently evaluated in clinical trials. The cornerstone treatment for older AML patients is low-dose araC which has less than 20% complete response rate as a single agent (compared with 29% for SGN-33 in the current trial). araC is typically administered with other agents and is currently evaluated in combination with some novel drug candidates. These combinations result in a much better response rate, in the range of 30-60% among a variety of patient populations.
A lot of clinical data was published at the American Society of Hematology (ASH) meeting, some of it quite impressive. Naturally, established drugs such as Millennium Pharmaceuticals‘ (MLNM) Velcade, Genentech’s (DNA) Rituxan and Celgene’s (CELG) Revlimid got most of the attention. In my opinion, the real star of the conference is MT-103 which is being co-developed by Micromet (MITI) and MedImmune, the biologics division of AstraZeneca (AZN). I won’t go too deep into describing the mechanism of action and the platform based on which MT-103 is built (I intend to do that in a review I hope to publish next week). However, the clinical data presented by Micromet is so impressive and so groundbreaking from several perspectives, that it must not be ignored.
The partnership with MedImmune, which dates back to 2005, is probably Seattle Genetics’ second most important partnership. On the scientific side, now that MedImmune has been merged with Cambridge Antibody Technology [CAT] to form AstraZeneca’s (AZN) biologics division, Seattle Genetics has a real antibody powerhouse on its side. On the financial side, Seattle Genetics could benefit from another pharma giant on its partner list, equipped with the 8th largest R&D budget in the industry and consequently the ability to support multiple clinical programs simultaneously. Looking at Immunogen’s partnership with Sanofi-Aventis, which has thus far led to 3 clinical programs, is making us hope that AstraZeneca will be to Seattle Genetics, what Sanofi is to Immunogen.
The cooperation with MedImmune originally revolved around one target – EphA2. This intriguing target is highly expressed in numerous solid cancers including breast, prostate and colorectal, which makes the potential opportunity immense. In addition, there is a growing body of scientific evidence that expression of EphA2 is associated with aggressiveness and poor survival, which makes its targeting very reasonable in advanced stages of the disease. The specific targeting of EphA2 looks particularly promising since MedImmune’s scientists discovered that there are several regions within EphA2 which become exposed and consequently accessible for antibodies only on cancer cells.
MedImmune views Epha2 as a very important target. In fact, it has such high hopes for it, that there it is currently evaluating multiple approaches to targeting this promising antigen. One of these approaches is Micromet’s (MITI) Bite (stands for: Bi-Specific T cell Engager) platform, which is being co-developed with Medimmune for several targets, one of which is EphA2. The Bite Platform, a very interesting technology (that deserves an article of its own being so different from other antibody-based platforms) consists of two small antibodies that link between a tumor and specific immune cells in order to manipulate them to attack the tumor. It has demonstrated very impressive potency in mice, and even more impressive results among heavily pre-treated NHL patients, mainly due to the very low doses that showed a clinical effect. The Bite platform hasn’t been evaluated in solid tumors yet, but clinical trials are expected to be announced in the future, one of them is for a Bite agent that targets Epha2. Due to its unique characteristics that present both advantages and disadvantages, it is very hard to predict Bite’s efficacy in these settings. Although some consider Bite an immunotoxin, it differs from immunoconjugates in that it does not contain any drug or toxin payload, so it is reasonable to expect that MedImmune will explore it in parallel to Seattle Genetics’ platform. Although Bite is not necessarily a direct competitor, I bet the folks at Seattle Genetics are following that program closely. Nevertheless, MedImmune seems pretty happy with Seattle Genetics’ platforms, as it has recently licensed Seattle Genetics’ ADC technology for a second undisclosed target.
Author is long SGEN
The capability of developing antibodies for cancer can be found at most pharma companies’ R&D centers, either as a result of internal R&D efforts or M&A activity, such as the acquisitions of Cambridge Antibody Technology and Abgenix by AstraZeneca (AZN) and Amgen (AMGN), respectively. Therefore, there is nothing unique about a company that can develop cancer antibodies, even though there are many other differentiating factors between the companies. The crucial element in developing an ADC is linking the antibody to the drug payload. As simple as this concept may sound, its realization is highly complex and challenging, and in our opinion represents the main entry barrier to the field. As ADCs are also termed “armed antibodies”, companies like Seattle Genetics can be viewed as the arms merchants of the antibody industry.
As an arms merchant, the company focuses on two areas: Technologies for conjugating antibodies to toxic drugs and potent toxic compounds that will be attached to the antibodies. The ability to develop highly potent drugs and conjugation technologies is Seattle Genetics’ main asset, since this is the ideal way to differentiate itself and to broaden the company’s pipeline through partnership deals. In an industry where the vast majority of candidates fail, it is imperative for companies like Seattle Genetics to have as many candidates as possible, even if eventually most of the revenues go to the partners. At this stage, with the limited resources Seattle Genetics has, betting on few wholly owned candidates is statistically unfeasible. Although the company has had its share of failures over the years, we believe the advances made both in terms of linkers and drugs will finally enable it to generate a constant flow of candidates into the clinic, whether independently or in collaboration with partners. In order to look at the progress that has been made so far, the best place to start is the failure of Seattle Genetics’ flagship product, SGN-15, an antibody linked to the chemo agent Doxorubicin, whose development was discontinued in mid 2005 after a series of discouraging clinical trials. On top of the usual uncertainties related to drug development, there were probably two main factors that severely sabotaged this candidate’s prospects.
The first factor was the use of an approved chemotherapy drug such as Doxorubicin as the conjugated drug. Chemotherapy agents that are conventionally administered to patients are distributed across the body and affect healthy cells as well as cancer cells, leading to the so typical side effects of chemo. Consequently, approved chemo drugs represent a fine balance between two needs: They must be strong enough in order to kill cancer cells, but not too strong, so the damage caused to normal tissues is acceptable. In contrast, when chemo drugs are linked to an antibody, they can be targeted to tumors specifically, since the antibody guides them. This enables the use of much more potent drugs, otherwise impossible to use in conventional administration. Furthermore, since only a small fraction of the administered antibodies eventually accumulate in cancer cells, it is critical that the few antibodies that do reach the tumors carry a very potent payload. This can be accomplished by two approaches: The antibody must either be loaded with a large amount of drug molecules or a small amount of very potent drug molecules. Although there are efforts on both fronts, the latter approach is more practical, at least for now. Bottom line, in order to have an effective ADC, drug developers should use chemo drugs that are too toxic to be generally administered. This approach was validated by the only FDA-approved ADC, Mylotarg, which utilizes Calicheamicin, a drug that is too toxic on a stand alone basis. Both Seattle Genetics and Immunogen (IMGN) are currently using such compounds as the basis for their ADC platforms: Seattle Genetics picked auristatin, while Immunogen focuses on maytansine. The second disadvantage in SGN-15 is linker instability. An ideal linker should be very stable in the bloodstream but also readily degradable once inside cancer cells, so it would release the free drug only inside target cells. For SGN-15, Seattle Genetics uses an acid-labile linker, which is relatively stable in neutral environment (bloodstream) and very unstable in acidic environment (present in certain compartments inside cells). This kind of linker is used very successfully in Mylotarg for the treatment of acute myelogenous leukemia [AML], making Seattle Genetics’ pick very reasonable at the time. However, SGN-15’s stability in patients proved to be pretty low, mainly as a result of premature linker degradation in the bloodstream, before reaching the tumors. Mylotarg had a great success despite being based on an acid-labile linker because it attacks a blood-borne malignancy and the antibody can find its target quickly, before linker degradation and drug release. In contrast, the dense mass of solid tumors makes them far less accessible compared to blood cancers. Therefore, the ADC must be present in the bloodstream for longer periods at higher concentrations, necessitating highly stable linkers.
By the time SGN-15 was scrapped, Seattle Genetics already had its next generation of ADC technology up and running. On the drug front, the company licensed a potent drug called auristatin E from Arizona State University, which was found to be almost 200-fold more potent than Doxorubicin, and used it as a basis for its own proprietary drug, MMAE. This drug is a very potent anti-tubulin inhibitor that can be synthesized cheaply in very large quantities and subsequently be conjugated to a virtually unlimited number of different antibodies. Another appealing attribute of Seattle Genetics’ conjugation technology is the highly homogeneous population of ADCs, as oppose to other methods, including that of Immunogen. On the linker front, Seattle Genetics chose a peptide-based linker which is cleaved by enzymes that are present inside cells but not in the bloodstream. Upon cancer cell binding, ADCs are trafficked to a special compartment called lysosome, where there is an abundance of enzymes that cleave the linker and release the drug inside the cell. Seattle Genetics’ peptide linker has demonstrated an increase of more than 3-fold in stability in the bloodstream, which, combined with the high potency of MMAE, puts the company’s candidates in a better starting point.
It is crucial to understand that ADCs are not commodity products, but highly complex systems that require a great deal of customization and optimization. Multiple factors, including (but not limited to) cancer type, the target on cancer cells, exact binding site, type of linker, efficiency of drug release, mechanism of conjugation, type of drug and amount of drug payload affect the performance of each candidate. The number of variations for each ADC is high but it is impossible to predict the optimal combination in advance. Thus, the exact antibody-linker-drug combination should be tailored specifically for each ADC candidate, perhaps even for each condition the candidate is aimed at treating. In order to stay relevant, Seattle Genetics must constantly develop new linkers and drugs, in addition to developing antibodies and identifying attractive cancer related targets. It is not surprising though, that the company is currently developing next generation linkers and drugs that will possibly be employed in future projects.
Author is long SGEN
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