Biotech Strategy Blog

Commentary on Science, Innovation & New Products with a focus on Oncology, Hematology & Cancer Immunotherapy

Posts tagged ‘Prostate Cancer Market Analysis’

A lot has happened this month with San Antonio Breast Cancer Symposium (SABCS) and other data emerging that it could be subtitled:

A brief tale of two breast cancer drugs

SABCS San Antonio CrowdAt SABCS a couple of things looked pretty intriguing indeed. One we will cover in the New Year, along with an in-depth expert interview on the topic, while the other is the main focus of today’s note.

In the last post of 2014, it’s time to address some pertinent questions on triple negative breast cancer (TNBC) from subscribers – there is good news to report here, unlike the surprising MARIANNE results for Kadcyla and Perjeta in frontline HER2+ disease that were announced early this morning.

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A big thank you to all who have supported Biotech Strategy Blog Conference Coverage this past year. Wishing you good health, happiness and prosperity in 2015. See you on the other side!

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.

ESMO 2014 Dr Taplin Galeterone ARMOR2 Presentation

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?

Tokai Pharmaceuticals Stock Info Oct 3, 2014The 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.

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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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