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OncoGenex Pharmaceuticals, Inc. Message Board

  • dr.kuvasz dr.kuvasz Aug 29, 2010 11:53 AM Flag

    OGXI Investment Strategy

    Hi Ices,

    I didn't want to post this analysis on ISIS board because it might have bothered those who want discussions on that board to be confined to ISIS.

    My investment strategy in OGXI is based on following strategy. OGXI went public in 2008 after doing reverse takeover of SONUS. I have regularly added to my position over many years buying as high as $26 without remorse (but getting some criticism from my wife). I have large investment in OGXI and am comfortable with my average cost pps.

    I am holding until I see accretion in price with anticipation of approval of 011. May sell some then, may not.

    The biggest question I have is when will the market see that the timing is right to buy into OGXI. The partnership with TEVA was considered negative because most people wanted a buyout. Also the deal was novel and people thought TEVA was second rate. This is wrong and the analysts applaud TEVA as a partner. Some people thought if big pharma did not want to partner, then something was wrong with the drug. The recent JCO publication should put that piece of misinformation to rest.

    The timing of buying is critical for any new investor. The general market hasn't helped as there is risk aversion. But if Abingworth LLP is buying big now, it may be a signal price will start to climb.

    However, here is the background information you need to make the assessment of whether to buy in.

    011 is now being tested in prostate and expect commercialization in 2 years. Test in lung starts next year. TEVA is paying 100% of development and testing for both drugs. Royalties are tiered and may go up to over 30% in favour of OGXI depending on sales. Prostate global market is 2 bl, lung indicator of 011 is 1 bl. My view is that TEVA will buy OGXI if 011 approved in prostate, and TEVA will use 011 and 427 to build its branded oncology division.

    IF 011 approved in prostate, I can't guess the value of OGXI. It will be at least 1 bl, but TEVA buyout would be higher given the pipeline. You will see that the float is 6.3 million shares. This is the most unique feature of the company. The current market cap is under 90ml US dollars.

    011 and 427 are cheap drugs. They will be attractive to pubic health care systems.

    People may differ on view of competitive risks. DNDN is not. Prostate market is large enough and use of different drugs at different stages will allow for many different drugs in the market. In fact, DNDN may expand market for 011 since it will facilitate more prostate patients living longer who will turn to 011 down the road.

    I hope this helps. Others on this board may have different views based on whether they are traders or longs.

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    • Not completely different but you are correct. That's why I said "even though it doesn't exactly prove my point".

      Slide 71 is an evidence that there was no site with significant number of patients that shifted the trial one way or another. So if you were a site coordinator and give me (and show me that there is no foul play in the site selection) all the patient info of your site that contributed to 40-50 patients to the first line trial, I will be happy to use it in my investment decisions. I'm not claiming I'll make the correct decision all the time but I'll use it (if legal) and I'll have an unfair advantage over others who don't have this information.

    • <<calculated by deleting one site at a time to make sure the results are not due to a single site>>

      That's completely different. This means one site doesn't have impact on overall result, but it doesn't mean one site can predict overall result.

    • >I have never seen HR across sites.
      Slide 71 of the ASCO presentation actually is not HR across sites but overall HR across sites calculated by deleting one site at a time to make sure the results are not due to a single site.

    • OGXI had options in the months leading up to partnership announcement, low demand now as you point out, but soon the demand will return.

    • your statement:

      "buy out of the money "leap put options" a year or more out"

      OGXI does not have options!!

    • <<more patients in the control arm discontinued treatment early on mainly due to disease progression>>

      Patients are supposed to discontinue treatment if cancer progress. When you talk about getting cabazitaxel earlier you are talking about actual time, in relative cancer time, getting cabazitaxel only after cancer progression is the same for both arms. Patients on comparator arm are supposed to progress earlier if your treatment works.

      <<In the same 2009 ASCO presentation slide 72 (even though it doesnt exactly prove my point) shows that HR from all sites were balanced. As an investor I wouldnt mind peeking into the data set of a random site unless it was deliberately chosen to misled. >>

      I have never seen HR across sites. The number of patients in each site in phase II is so small, the CI should be all over the place. If they are too consistent, I actually question the data.

      How does anyone get to look at the dataset from the sites? They don't enroll patients at the same time, and even doctors don't get to see full dataset, they only get to see each individual patient data, they don't compile them, data are sent away for compilation. Clinical data collection is a complicated process. The only one gets to see full picture is the end user of dataset who analyze the data, and if they don't know treatment assignment, they don't know anything either until unblind. People who think they can get accurate picture by talking to one doctor don't know the process that well. Same with talking to patients. There are so many stories of patients doing so well in so many oncology trials, guess what, that doesn't prevent these trials from failing.

    • >The next line treatment should be relatively balanced for 800 patients.

      I agree. However, would there be any time benefit to the patient if cabazitaxel treatment is started early? I dont know.

      Even in the Phase 2 trial (before cabazitazel is approved), more patients in the control arm discontinued treatment early on mainly due to disease progression (Slide 71 of the ASCO presentation). Would this number the same if the trial were double blind? I dont know.

      >People who rely on one site for this information will likely make incorrect inference.

      I disagree with this. In the same 2009 ASCO presentation slide 72 (even though it doesnt exactly prove my point) shows that HR from all sites were balanced. As an investor I wouldnt mind peeking into the data set of a random site unless it was deliberately chosen to misled.

    • <<However, we now have cabazitaxel approved. I'm not sure how that would affect this study. If you knew that you are not getting OGX-011 would you be more inclined to quickly declare yourself refractory and demand cabazitaxel? >>

      This would not be a problem for this trial because patients on both arm get docetaxel/prednisone. The next line treatment should be relatively balanced for 800 patients.

      <<OGXI might not benefit from making this study open label as picoplatin might have been a victim of the SPEAR study being open label. If the patients and the doctors knew that they are not getting the drug, they might be more inclined to switch to another trial or use chemo.>>

      That was PARD's excuse. The data showed clearly the key reason the trial failed was mainly due to patients sensitive to platinium didn't benefit from pico that much. If they had included only refractory patients, they would have better chance to succeed.

      <<I expect to see sites with 40-50 enrolled patients. Since the study is open label, statistically significant information can be leaked just from a single site.>>

      40-50 patients from one site can't represent 800 patients statistically, they might not even be randomized in equal number to two arms - the only true representation is randomly selecting 40-50 from all sites adjusted for baseline characteristic of all patients and treatment assignments. People who rely on one site for this information will likely make incorrect inference.

    • My estimate is 1 year (at most the end of 2011).

      Remember that in Phase 2, 80 patients gave them near stat significance.

      80 patients is 1/10th of the number of patients they will enroll in Phase 3.

      Assuming that they ramp up not so slowly, they should have 80 patients pretty quickly.

      The first secondary outcome is PFS at day 140. This is to compare the arms with respect to the proportion of patients having a milestone Day 140 status of alive without event (no death or disease progression).

      They should have an early indication of this in at most 10 months.

      Actually in phase 2, 2.5 months shows an even clearer PFS advantage (25% vs <5%).

      In just 6 months they should see whether they also have this advantage in this trial as well.

      10 month shows a clear OS advantage for OGX-011.

      I'm not saying they would make this data public. However, TEVA would know.

      So speculations should begin earlier.

      I dont have strategy for this stock anymore.

      Any other hidden long term germs (<100m market cap; strong randomized phase 2 data; phase 3 results are at least 1 or 2 years out) do you guys play?

    • Makes sense. I think there's time though before we need to worry about this. It will probably take them at least a year to enroll the patients and it would probably be at least another year before any survival differences between the two groups could begin to be apparent.

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