"An assumption could be made that the short thesis in biotechs is the odds favor bad things happening more often than good."
Bingo! For every 2 spectacular biotech successes there are at lest 3 meltdowns. The big players on the short side hold a full portfolio of positions and shorting is only one tool within a strategy that includes options, convertibles, and offsetting long positions in other companies. If I were putting together a portfolio of promising short positions it would include a half dozen companies whose names are frequently batted around on this mb. Picking winners in biotech is difficult and requires a great deal of research, patience and tolerance for market moves at odds with the original investment thesis. EXEL may well be the last developmental biotech I will gamble on in a big way. Frankly, I see Genentech (Roche), Bristol (courtesy of MEDX), and Amgen (largely thanks to Abgenix et al) having reenergized their drug development programs at the expense of the upstarts.
"If PD1's work does that make Cabo a drug with no future?"
The PD1's do work but there isn't much overlap with Cabo's potential commercial market, so not to worry. At least initially the market EXEL is targeting is at the refractory end, very sick patients who are pretty much running out of viable alternative treatments. The PD1's will be upstream, in frontline and eventually adjuvant settings.
"I can't name a single vaccine based therapy that's worked..."
In fact, if you want to take a broader look at cancer immunotherapy, there are a handful of approved products. BCG, IL2, Interferon, Provenge and Ipilimumab all are approved immune products for various cancers. The PD1 products will be the most effective and will be monster revenue generators.
The vaccines have been developed based on the premise that tumors escaped immune recognition. The more accurate description is that tumors actively suppress immune response. That is the paradigm being addressed by the checkpoint inhibitors and it is a branch of the science still in the early stages with many exciting discoveries yet to come.
"I can't name a single vaccine based therapy that's worked..."
Provenge is often thought of as a form of vaccine. It is definitely an immune therapy product, but doesn't quite fit the traditional antigen/adjuvant product we identify as a vaccine.
"....look for the right check points when it comes to the immune related strategies."
The checkpoint inhibitors are a different class of drug than the kinase inhibitors like Cabo and Ponatinib. The checkpoint inhibitors work by acting on the pathways by which tumors induce immune anergy. The first (and only) approved checkpoint inhibitor is Ipilimumab, which acts on the CTLA4 receptor. The PD1 and PDL1 inhibitors are working their way through phase 3 trials now. These drugs are immune therapy and they do result in significant tumor shrinkage. That was the point I was making. Immune therapy should not be thought of as limited to a role of tumor stabilization. That is the story being sold by the vaccine companies.
"immunotherapy has a different mode of action. it almost never shrinks tumors, it slows growth. So no effect on PFS, but a good effect on OS."
Let's talk about this a bit. The "slows growth and thereby increases survival without shrinking tumors" is the paradigm that the cancer vaccine companies have been pushing for years. I have a few issues with this entire notion. First, we now know from the example of the checkpoint inhibitors and previously from interferon and interleukin-2 that immune therapy can and does shrink tumors. The vaccine companies would like you to believe that vaccines do not shrink tumors because they are somehow "different." My premise is that they don't shrink tumors because they just are not very effective.
Tumor shrinkage is a measure of activity. Research compounds can be screened for activity and then are tested further to see if this activity results in a benefit to the patient in terms of increased survival. With the vaccines our hints of activity are immune response that is ASSUMED or PRESUMED to have benefit and the occasional anecdotal patient that appears to benefit from vaccine therapy. So the vaccine companies have less cause/effect data and have to rely more on a statistical argument for the investment thesis. Here's my issue with this. Statistically test 50 different placebo vaccines and a handful of them will have what appears to be compelling survival or PFS data. Look hard enough at any body of data and natural variance will give a good statistician plenty of fodder to make a claim of efficacy. Add to this the selectively opaque one way viewing of data that is de rigueur for developmental biotech and it is easy to see why a heck of a lot more money has been made betting on the short side of cancer immunotherapy than has been made on the long side.
I can only see the abstracts. Kurzrock was lead author for the phase 1 study of Cabo that had the MTC cohort that led to the phase 3. This was back when they were using very high dose Cabo. I wonder if the calcitonin spikes correlated to drug treatment holidays or dose reductions? NCCN is doing an MTC webinar later this morning you might be interested in.
Not sure, but I'm guessing the takeaway message is for oncologists to find a dose level that their patients can maintain without interruption.
"What do you suppose is the point of this commentary?"
I believe what's missing is the actual "commentary." For the reasonable remunerative contribution of $21 you can access the complete article and see what perspective the author wishes to add to the current body of thinking on the 2 year old data set presented in the abstract.
"This might lead to a compendium listing allowing patients not enrolled in the trial to get reimbursement for Cabo."
They did well to get the RET NSCLC listing. It's unfortunate that they can't promote that use with oncologists as this is actually a larger commercial opportunity than MTC. The bottleneck is identifying the patients that would benefit. Oncologists routinely submit samples for genetic testing, but standard panels do not check for RET. ROS1 is another treatable (off label crizotinib) aberrant gene that occurs with about the same frequency as the RET translocations. Standard panels check for EGFR, KRAS and ALK, but not RET or ROS1. A significant number of patients (roughly half) have a negative result and my sense is that in most cases this is where their testing ends. Routine diagnostics have not kept pace with recent research and comprehensive advanced gene typing is not the standard of care. This will change, but it will take time and effort.
I feel strongly that we will not see any NCCN compendia listings in the indications in which EXEL is running pivotal trials. The committees seem to have an informal no compete clause with ODAC and the FDA. A possibility I have mentioned before is in refractory DTC. Nexavar has a PDUFA date in December. Once it is approved, it would make sense to run a single arm ORR endpoint trial in Nexavar refractory patients. A good ORR rate in this population would likely earn another listing and the existing MTC marketing force would serve the same clinicians who would be in a position to treat these patients.
"Let me wrap up by commenting on our cash position. We ended the quarter with $465 million in cash and investments. Our guidance for year end cash also remains unchanged with an expected year end cash balance of approximately $400 million."
Nothing in that quote precludes a possible secondary. $400 mill is a considerable amount of cash, but the ongoing clinical development program is very expensive. EXEL's past practice is to keep at least 2 years of burn in the coffers. We are getting close to that level now. I am hopeful that they will opportunistically wait for good press and a higher stock price before they pull the trigger. There are two events on the horizon that have very high probability of positive outcomes. Roche's phase three trial with Cobimetinib will make its primary endpoint and Comet 2 will make its primary endpoint. The other upcoming seminal events are less predictable. EXEL has to plan for both of the possible outcomes for Comet 1. If I were the CEO I would try to manage the timing of the news cycle to have the opportunity to raise cash at a higher stock price, but before the final analysis for Comet 1.
"I'm basing the "tail off" theory on that the relative toxicity of Cabo builds up because of a long drug half-life and the daily dosing regimen used for COMET-1 so I'm expecting more and more patients to drop out as time goes on even at 60 / 40 mg, and that targeted therapy sometimes experiences an accelerated rebound after discontinuation."
Let's take a look at a real world example real close to home. EXAM completed enrolment in Jan 2011. The primary analysis for PFS on 4/6/11 also triggered an interim survival analysis. At that interim analysis there was no curve separation and the p value was .99. Another interim was done 14 months later on 6/15/2012 and the Cabo arms median survival improved from 21 months to 26 months and the p value dropped to .24. I am hoping/expecting the p value to drop even more at the final analysis yet to be done.
"(Correct me if I'm wrong but if this trial is anything like abiraterone's, Cabo will be discontinued on disease progression right?)"
This is true for all of the Cabo trials.
"So after the interm analysis anything longer than 3 months you would consider icing on the cake - so to speak."
Yeah, not so much. The standard notion is that "the longer, the better." There is a logic to it, but I wouldn't get too dependent on this notion. Right now our concept of how the control arm performs is just guesswork. A longer trial could be the result of better than anticipated control longevity, backended enrolment, delays in announcing the results, or best case--the treatment is working better than anticipated. We'll just have to wait and see how it all turns out. We do know that target enrolment was 960 (it likely overshot by a handful) and 900 patients were enrolled between January and September. BTW, that speaks well for the size of the potential commercial opportunity.
"...the nature of the hazard ratio model presumes you are fitting against some presumed constant sized hazard reduction accrued across the duration of the trial."
You are not comparing the treatment arm to a presumed constant hazard reduction, you are comparing it to relative risk experienced by the control arm. With the accumulation of more data, the p value can/ will continue to improve even if the HR decays a bit. Eventually the survival curves will meet or cross just due to old age, but look at p value as a measure of the area between the curves, not as a measure of maximum separation. It's not exact, but not a bad rule of thumb.
As I said the most likely Comet-1 interim outcome is that the trial will continue to completion. The protocol will spell out what information the DSMB will share with EXEL. Typically, DSMB's do not share any of the statistical data unless the primary endpoint is achieved, but I've seen it done otherwise. Companies are privy to enrolment and event totals so the timing of analyses will not be a surprise for EXEL. It took EXEL 2 months to announce EXAM topline results, but PFS trials are more complex than OS outcomes. I expect the Comet-1 interim announcement in the Jan/Feb timeframe.
"Since the effect of Cabo tails off, it wouldn't be a bad idea to even apportion half to the interim since there could be a cleaner separation at interim than toward the end of the trial."
First. I don't accept the notion that the effect of Cabo will "tail Off". If anything, the phase one data in MTC indicates that there is a minority of patients that tolerate long term treatment. This may or may not hold true for CRPC, if it does, there could be a "right-sided" tail separation between the survival curves.
Second, you are forgetting that patients don't all enroll on the same day. At the interim, the September enrollees will have been on trial for only a few months; at the final analysis, probably only for about 6-7 months. Enrolment probably peaked at the end, so even if your premise of "tailing off" efficacy is valid, the final analysis will still capture more positive data than the interim.
"... but I've satisfied myself that the trial is adequately powered."
Just the fact that the trial is so large (n=960) tells us that if Cabo imparts a clinically meaningful advantage, that signal will be statistically demonstrated at the final analysis.
The probability is that the interim analysis will not pass muster. We have the final analysis powering, but not the interim, although we do know the event total for triggering. A good guess is that EXEL used the similar model for Comet 1 that was used on EXAM. For EXAM the following interim parameters applied:
"An interim analysis of OS was expected to be performed at the 0.00006 level per a
Lan-DeMets O’Brien-Fleming alpha spending function based on an expected 31% information
level. The actual alpha level would be based on the actual information fraction at the time of the analysis."
Very little available p value was "spent" on the interim and most was preserved for the final. I expect the same for Comet-1. Because the enrolment was so compressed and the disease so lethal, I expect the final analysis will occur just 3 months after the interim. Event triggers are 387 and 578 respectively.
"However, at any time, the independent data monitoring committee can stop the trial if they deem it appropriate, and this can be for either excessive patient death or clear efficacy."
You essentially have it right, but let's talk about this a bit. For the interim analysis the data monitoring committee is given a clear roadmap. The data will be run and if the pre-specified p value is attained, the trial is unblinded and presumably the company will submit an NDA. If the p value is not attained, the trial continues to the final analysis. Some analyses also include a futility analysis. Comet 1 does not. A futility analysis provides a path to discontinue a trial because it is unlikely to succeed if allowed to run to completion.
Beyond these boundaries, DBMC's have the discretion to recommend a trial be stopped for overwhelming efficacy or if they determine that the treatment is counterproductive and treatment arm patients are being harmed. Trial stoppage for overwhelming efficacy outside of an interim analysis is an incredibly rare event. However, just as "off-label" use is always overestimated on YMB's, there are always voices predicting early unblinding.
On a related subject. Differentiated thyroid cancer shares many of the same oncogene drivers that fuel MTC. There is already a Quest Diagnostics test available to analyze FNA biopsy samples and determine aberrant genes. RET and RAS account for a significant portion of these patients. Nexavar is or soon will be approved as frontline therapy. I really wonder why EXEL does not run a single arm uncontrolled trial in RET or RAS positive patients who have failed on Nexavar with an ORR endpoint. Now we are talking "lay up" with a cheap path to approval in an indication not requiring an additional sales force. Even if they are only looking for another compendium listing it would still contribute to the bottom line.
"From the article: Kind of a layup for Cometriq, don't you think?"
The answer is perhaps and here is why. High cMET is clearly associated with a worse outcome, but it does not necessarily follow that targeting cMET will improve that outcome. What is not known is if that expression is essential to disease progression or merely an artifact--a side effect analogous to a rash or runny nose in other disease settings. The observation certainly provides the rationale to test the hypothesis, but until the clinical work is done, Cabo efficacy in this indication is still iffy.
Here's some more reading material. "Cleveland Clinic Using Foundation Medicine Test for Study on Impact of Sequencing in Cancer Care" This study is relevant for 2 reasons. It may hit on a few NSCLC RET fusion patients and it may also turn up other as yet unidentified cancers driven by RET mutations