Overreaction - Still have Global Rights to BIC PI3K
Longs, this is classic overselling post-ASCO. Infinity is being hit on two fronts. First, Synta presented results of their HSP90 drug in NSCLC. While this drug showed a positive trend - the results did not meet statistical signifance - and the trial had been enriched with patients that showed the most encouraging responses in their earlier trials. SNTA is down more than 30% and INFI is taking some of the hit since they have a similar product with a similar development strategy. In addition, Gilead presented very strong data for their PI3K drug idelalisib this weekend. Gilead is being viewed as the front-runner in PI3K drugs - and idelalisib is arguably about 2 years ahead of IPI-145 (Infinity's drug). Investors are viewing IPI-145 as being "2nd best" to Gilead - and potentially third best to PCYC/JNJ's ibrutinib. Since most investors pay a premium for the "market leader", there is a sell-off the past few weeks as investors digest the possibility that INFI may not have a market leader in either of their late development candidates.
Here is why I would caution sellers about dumping their shares today. 1. INFI owns the global rights to IPI-145 and global rights to a highly active hematology drug is rare these days. This drug is likely just as good - and may be better than idelalisib. However, INFI will need a partner and/or will need more cash to accelerate the development of this product before ibrutinib and idelalisib are commercially available (will be hard for INFI to recruit patients to their trials). 2. Novartis holds a 8% stake in INFI. Consider how much better this product would look if there was a larger company with deep cash reserves behind it. Novartis has already placed some money down. 3. IPI-145 inhibits both delta and gamma isoforms of PI3K. This may play an increasingly important role - as T-cell lymphoma treatments are dominated by IV therapies that come with significant toxicities. This would be a quick to market strategy for INFI