At the 2014 ESMO Congress in Madrid, Mary-Ellen Taplin, MD (Dana-Farber Cancer Institute, Boston) presented the results of the Tokai Pharmaceuticals (NASDAQ $TKAI) ARMOR2 clinical trial of galeterone in men with advanced prostate cancer.
Galeterone has a novel triple mechanism of action. In effect, it is a CYP17 lyase inhibitor (like abiraterone) that has additional anti-prostate cancer actions including androgen receptor (AR) inhibition (like enzalutamide). It also causes AR degradation that decreases AR levels.
Tokai’s IPO last month is reported by Renaissance Capital to have raised $98M for the company, with most of the funds going to prior investors including Novartis Bioventures which owned 28 percent.
Shares in $TKAI were initially priced at $15. They soared to a high of $30 thanks to high insider buying and a high trading volume. Novartis Bioventures were reported by Renaissance to have bought $20M.
As of publishing this post, the stock is now trading at $15.40, slightly above it’s IPO price. So have Novartis and others made a good investment?
The market cap of $TKAI, according to their Investor Relations page (screenshot pre-market Oct 3, 2014 shown above) is $336M – not high for a company about to enter phase III drug development.
Readers are no doubt aware of the Feuerstein-Ratain rule that predicts a phase III cancer trial will be a failure when undertaken by a company with a market cap less than $300M. As Adam noted in his May 6 story on The Street earlier this year, “For companies with market caps between $300 million and $1 billion, the oncology phase III success rate is 59%.”
The big questions now are did the data for galeterone from the ARMOR2 trial impress at ESMO 2014 in Madrid and what are the challenges and opportunities in the planned phase III ARMOR3-SV trial?
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DISCLAIMER: Please note this piece offers no stock advice, is not a solicitation to invest in $TKAI and makes no recommendation on whether to buy or sell. It merely offers commentary and analysis of the data presented at ESMO 2014. Readers should do their own due diligence prior to making any investment decision.
Yesterday saw the news that Tokai Pharmaceuticals ($TKAI) have filed plans for a $75M IPO, largely based on the potential of their phase 2 prostate cancer compound, galeterone.
My first reaction on seeing this was $75M – that’s a pretty small number.
It’s been many years since I project managed drug development trials but $75M does not go a long way if you want to run a global phase 3 program. It’s certainly pails into insignificance in comparison to the recent $308M raised by Juno in Series A & B financing.
A cynical view would be to see this as the initial investors looking for a ‘save face’ exit strategy. Tokai have spent the last 10 years seeking to bring a novel prostate cancer drug to market, and they are still only in phase 2. To put this in perspective, they were initially ahead of Medivation!
Fast forward 10 years and the prostate market is now highly competitive, with other new products ahead of galeterone in development including next generation androgen receptor antagonists: ARN-509 (acquired by JNJ from Aragon) and ODM-201 (Bayer/Orion). We’ve also seen a several drugs that showed promise in phase 2, fall by the way side in phase 3; dasatinib from BMS and Orteronel (TAK-700) from Takeda/Millennium readily come to mind. Caveat emptor!
At ASCO 2014, there was a lot of interesting data in the oral prostate cancer session, which provided insights into the challenges (in addition to the competition) and opportunities that may exist for galeterone.
I have no intention of taking any future position in $TKAI. This piece offers no recommendation on whether you should invest or not.
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San Francisco – In the ASCO GU prostate cancer session yesterday morning one of the most interesting presentations was by Andrew J Armstrong, Associate Professor of Medicine and Surgery at the Duke Cancer Institute.
I previously referenced Dr Armstrong’s excellent education presentation at ASCO 2012 in my piece on Xconomy about the emerging challenges of prostate cancer drug development.
He’s a speaker that I particularly enjoy listening to, so my attention was immediately drawn to his presentation at ASCO GU on, “Beyond Enzalutamide and Abiraterone: What’s Next in Androgen Therapy.”
Looking at this title, at first glance the question that comes to mind is do we really need new treatments that target the Androgen Receptor (AR), after all we’ve heard this week about the PREVAIL trial with enzalutamide?
Based on Dr Armstrong’s presentation the answer is a resounding yes!
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At the 2012 annual meeting of the American Society of Clinical Oncology (ASCO) in Chicago, Oliver Sartor, Professor of Cancer Research and Medical Director of the Tulane Cancer Center in New Orleans told attendees in the educational session on castration-resistant prostate cancer (CRPC) that he was tired of being asked the question of what is the optimal sequence for new advanced prostate cancer drugs?
There is “No data,” Sartor told the ASCO 2012 audience. As a result he recommended the use of less toxic therapies first and that patients be involved in the decision making. Not quite the guidance the audience perhaps hoped for.
Sartor is, however, correct that we don’t yet have the data – the clinical trials have yet to be done that will answer the question of what is the optimal sequencing of prostate cancer drugs?
The approval of abiraterone acetate (Zytiga®) for the treatment of men with advanced prostate cancer, post chemotherapy, and the expected approval of enzalutamide (formerly MDV3100) and radium-223 (Alpharadin) have focused attention on sequencing and combination options.
A poster at ASCO 2012 showed that cross resistance may occur between abiraterone and enzalutamide, suggesting that if resistance to one develops it may lower the efficacy to the other if given subsequently. More data and research is needed to validate this finding and understand how resistance develops.
Reciprocal feedback between the PI3-Kinase and androgen receptor (AR) signaling pathways means that blocking the androgen receptor may stimulate the PI3K pathway and vice versa, leading to the tumor trying to ensure its survival. This is particularly important in prostate cancers that have the PTEN tumor suppressor gene, the result is that the targeting of both PI3K and the AR to avoid crosstalk may be required.
The scientific rationale for combining enzalutamide with a PI3-kinase inhibitor was discussed on Pharma Strategy Blog in Sally Church’s video from the 2011 American Urological Association annual meeting. Clinical trials are being planned to investigate the use of PI3-kinase inhibitors in prostate cancer.
I have written more from ASCO 2012 about the emerging challenges in prostate cancer drug development in a guest post published on Xconomy. Many thanks to Luke Timmerman, National Biotech Editor, for the opportunity to contribute.
Hopefully, there will be more insights available at ESMO 2012 later this year and at ASCO next year on prostate cancer drug resistance, optimal sequencing and the benefits that combinations therapies may offer.