The discovery of a novel target in castration-resistant prostate cancer (CRPC) and the potential of drugs targeting this to delay or overcome adaptive resistance is the subject of today’s post.
Followers of the prostate cancer field know that one of the challenges with drugs such as enzalutamide and abiraterone is that patients stop responding to them over time and they develop acquired resistance.
So imagine that you could give a drug that is not only an effective anti-cancer agent in patients with acquired resistance, but might then allow those treatments to be effective a second time around. A recently identified druggable target means this is now a possibility.
Of course, it’s early days yet, and the preclinical work has yet to translate into humans, but it’s not hard to see the commercial implications in the prostate cancer landscape for companies such as $MDVN, $JNJ, $TKAI, Bayer and anybody else who wants to be a player.
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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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