BOSTON (TheStreet) -- This week's Biotech Stock Mailbag opens with a question from Pamela K. "What's your latest opinion on the expected outcome of the FDA adcomm for Onyx Pharmaceuticals(ONXX)?"
A housekeeping item: Onyx brings its multiple myeloma drug carfilzomib in front of an FDA advisory panel meeting next Wednesday, June 20. I will live blog the Onyx panel, which is scheduled for the afternoon session starting around 1 p.m. My special guest for the Onyx FDA panel live blog will be health-care investor and TheStreet contributor Nate Sadeghi. Please join us.
Nate and I are both predicting a positive panel vote recommending the accelerated approval of carfilzomib as a treatment for advanced multiple myeloma in patients who are refractory or intolerant to Celgene's(CELG) Revlimid and Takeda's Velcade. [In other words, in very sick multiple myeloma patients who have no other approved treatment options.]
Predicting good news for Onyx is a contrarian bet. Investor consensus goes the other way, forecasting a close, but negative, vote for reasons I'll explain below.
[ISI Group analyst Mark Schoenebaum's recent buy-side survey had 72% of respondents forecasting a negative FDA panel vote against carfilzomib.]
So, yes, the odds are against carfilzomib but the risk-reward for Onyx shares is favorable. A negative vote on June 20 is widely expected, so I wouldn't expect Onyx's stock price to take much of a hit on bad news. In fact, any significant dip in Onyx shares is likely to be bought because few investors doubt carfilzomib will be approved eventually. This is a highly active and effective drug in multiple myeloma with billion-dollar sales potential. Carfilzomib may take longer to reach the market, but the drug will get there.
Of course, if the FDA panel goes Onyx's way next week and votes to recommend approval, Onyx shares will move higher on the upside surprise of earlier-than-expected carfilzomib revenue.
Carfilzomib's fate next week is likely to rest on the panel's interpretation of unmet medical need in multiple myeloma. Onyx is seeking FDA accelerated approval based on a single-arm phase II study of carfilzomib of 266 heavily pretreated multiple myeloma patients with progressive disease after two or more prior therapies.
The overall response rate in the study was 23% with a median duration of response of just under eight months.
FDA does not set a rigid standard for accelerated approval of cancer drugs based on single-arm response rate studies, but historically, a 20% or greater response rate lasting more than six months is considered robust enough to merit serious consideration.
Problems arise, however, if patients enrolled in these single-arm studies are not truly refractory to all currently approved drugs. In cases like this, FDA may question whether the drug being reviewed fills an unmet medical need necessary for accelerated approval.
Onyx finds itself mired in this "refractoriness" debate. The company argues that the most clinically relevant definition of unmet medical need in multiple myeloma is patients who are refractory or intolerant to Velcade and Revlimid and/or Thalomid.
In the subgroup of patients from the Onyx study meeting this criteria, the response to carfilozimb therapy was 20.6% with a median duration of response of 7.4 months. This is very consistent with the study's overall results and is a strong argument in favor of approval.
However, if you use a stricter definition that includes only patients who are truly refractory to Velcade and Revlimid/Thalomid (excluding intolerance), the carfilzomib response rate drops to 15%, with a lower end of the confidence interval that drops the response rate to 10%. This level of response may not be enough to secure accelerated approval.
Next Wednesday, I expect the FDA and its panel experts to debate the pros and cons of these two definitions of unmet medical need. From the data we've seen to date, most recently at the ASCO annual meeting, intolerance to prior therapy seems to center mostly on patients who discontinue Velcade therapy due to serious neuropathy, or nerve pain. Carfilzomib causes less neuropathy than Velcade, but is that enough to justify including Velcade-intolerant patients in the "unmet medical need" response pool?
We already have a strong clue that FDA is inclined to take a harder line on carfilzomib because the agency refused to grant the drug a six-month review. Had FDA believed carfilzomib was serving a true unmet medical need, the review would have been shortened to six months.
FDA will make public its carfilzomib review in panel briefing documents posted to the agency's Web site on Monday, June 18. I expect the FDA review to be critical of the drug. The FDA-adjudicated response rates could be lower, including in the true "double refractory" patient group. Also look for any concerns about toxciity and side effects not previously disclosed.
Onyx wins at the FDA panel by convincing the experts that "refractory/intolerant" is a clinically meaningful and valid definition for unmet medical need in multiple myeloma. It's a challenging, but not impossible, task.
I'm predicting victory for Onyx because I believe panel members won't be dissuaded by a smallish 5% difference in response rate, especially for patients who are critically ill and need new medical options. This is essentially the same argument that Talon Therapeutics used successfully at its FDA panel in March to garner a positive vote for the lymphoma drug Marqibo, despite iffy clinical data.
If the FDA panel votes against carfilzomib, Onyx falls back on an ongoing phase III with interim results expected in the first half of next year. This study compares carfilzomib plus Revlimid and dexamethasone against Revlimid and dexamethasone in multiple myeloma patietns with less advanced disease.
Discussion of carfilzomib is not complete without acknowledging potential competition, in the nearest term from Celgene's pomalidomide, also filed with FDA already for relapsed/refractory multiple myeloma. Watch soon for FDA's response to Celgene's filing to see if the drug is granted a six-month or 10-month review.
Make sure to stop by the live blog on Wednesday.
@josiahmp, carrying on a conversation with someone over Twitter this week, writes, "I agree that it seems like AF [that's me] has been singing $AMRN praises only to question its legitimacy as of late. Doesn't make sense."
I haven't questioned Amarin's(AMRN) legitimacy. What I have done is acknowledge that not everyone is an uber-Amarin bulland that it's legitimate and important to assess the risks to the future commercial potential of the company's prescription fish-oil pill AMR101.
What doesn't make sense to me -- and is crazy, to be perfectly honest -- is the suggestion that you can't be bullish on a stock and at the same time criticize the stock or raise questions about risks.
I still believe FDA approves AMR101 on July 26, but I can be bullish while still acknowledging that we don't know everything that's going on between FDA and Amarin right now. A drug review is not a transparent process, so what happens if Amarin has an undisclosed manufacturing problem with AMR101, or if a study design flaw has tainted the data we have seen already?
For Amarin, approval of AMR101 is really only a beginning. We still don't know if FDA will grant new chemical entity status to the drug; or if the patent situation will settle out in the company's favor. Will Amarin be acquired by a larger pharmaceutical company (as most investors hope) or will the company be forced to market AMR101 on its own?
Lots of questions remain unanswered. Investors can and should hope for the best but don't be irresponsible by not preparing for the worst.
Smart investors don't act like @trincowski, who took to the StockTwits stream to call me a"criminal" and "low-life excuse of a person" for "raising doubts about Amarin."
Adam Feuerstein
06/15/12 - 07:55 AM EDT
--Written by Adam Feuerstein in Boston.
>To contact the writer of this article, click here: Adam Feuerstein.
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