Cowen biotech team lists possibility of STORM trial success as potential 2013 catalyst
Says if comes true could add upto 10$ to the value of Nexavar to Onyx.
Nexavar's Adjuvant STORM Trial Succeeds
Consensus view: Anti-VEGF agents have a poor history of success in adjuvant trials. Most notably, despite much enthusiasm and anticipation leading up to the release of
results, Avastin's NSABP-C08 trial failed to show a benefit of adjuvant Avastin in colorectal cancer. Therefore there is little reason to believe that Nexavar's adjuvant STORM trial in hepatocellular cancer could succeed. Results from STORM are likely years away in any case, and so won't come during 2013.
Why a surprise is possible: The planned completion of the STORM trial is closer than most investors realize. According to a clinicaltrials.gov entry updated in October 2012, the primary endpoint of the STORM study will read out in May of 2014, and so even should it go to completion, data will likely be available not long after the end of 2013. However, there is some chance that an interim analysis could trigger a premature end to the trial during 2013. Onyx and Bayer have released few details of the statistical criteria for success in STORM. The companies have said that STORM enrolled over 1,100 patients who have received either surgery or local ablation and randomized to either 400 mg twice daily of Nexavar or placebo for four years. The study has a primary endpoint of recurrence-free survival and several secondary endpoints including overall survival and time to recurrence. Onyx and Bayer have not disclosed the trial's powering, or whether there are any interim analyses. This has lead most investors to assume there are no interim analyses capable of ending the study early. However, based on the design of Avastin's NSABPC08 trial, there is reason to think that STORM could have several. NSABP-C08 included 6 interims which were conducted approximately every 6 months through the trial's completion. As STORM started in 2008, a large number of events should have accrued already. Therefore it seems quite possible that there could be one or more interims in 2013 before STORM's H1:14 completion.
Could Nexavar prolong event-free survival in the adjuvant setting? There are a couple of intriguing reports in the literature that suggest it could. Both trials examined Nexavar's use as adjuvant therapy in HCC patients who received a liver transplant. One was published by Teng et al in the World Journal of Surgical Oncology in February 2012. While the numbers are small (17 patients), the benefit of Nexavar was impressive. The disease-free survival rate at 18 months was 66.7% for patients who had received adjuvant Nexavar, compared to 0% for those who didn't (p = 0.011). Similarly, in 2010, Saab et al from UCLA published a case-control study of adjuvant Nexavar following liver transplant in Experimental and Clinical
Transplantation. Again, patient numbers were small (16 patients). Nonetheless, according to the report, 12.5% of patients who received adjuvant Nexavar developed HCC recurrence, compared to 50% matched controls. Results from such small studies must be interpreted cautiously, particularly since they are examining Nexavar post-transplant, not post-resection. Nonetheless, as they both produced sizable differences in the rate of recurrence, they do provide reasons for optimism that the STORM trial could succeed, and perhaps even be stopped at an interim analysis.
Expected timing of event: Anytime during the year.
Stock impact if surprise comes true: Our consultants estimate that 20-25% of HCC patients are treated with curative intent (the entry criteria of STORM). Excluding the 5% or so that undergo a liver transplant, this leaves approximately 20% that have surgical resection or ablation with curative intent. This implies about 8K patients will be eligible each year in the US and Europe combined. If one assumes that each patient will get 12 months of adjuvant Nexavar at a half dose (dose reductions were common in the two trials cited above), than adjuvant HCC as studied in STORM would be an approximate $400MM opportunity for Nexavar. Incorporating adjuvant sales into our model and valuation analysis would add an estimated $7-10 to the value of Nexavar to Onyx.