The turbulent financial markets that have seen the Dow Jones Industrial Average drop over 2% in August appear to have caught up with innovative mid-cap public companies engaged in exciting cancer research such as immuno-oncology. Up until now they have enjoyed strong investor support, but for the first time this year investors appear to be moving out of this sector and, as a result, share values have dipped dramatically. As a result, the BioWorld Cancer Index is trading down 11% in August. (See BioWorld Cancer Index, below.)

It looked as though the group would continue its upward trajectory following positive news flow early in August with Cambridge, Mass.-based Blueprint Medicines Corp., which is focused on genomically defined cancers, rare diseases and cancer immunotherapy, reporting that the FDA had accepted its new drug application for avapritinib for the treatment of adult patients with platelet-derived growth factor receptor (PDGFR) Exon 18 mutant gastrointestinal stromal tumors (GIST), regardless of prior therapy, and fourth-line GIST. The FDA granted priority review and set an action date of Feb. 14, 2020, under the Prescription Drug User Fee Act. The agency also noted it is not planning to hold an advisory committee meeting to discuss the application. Avapritinib is a potent and highly selective KIT and PDGFRA inhibitor for patients with advanced GIST.

Competitive landscape

The company had already enjoyed an 86% share value (NASDAQ:BPMC) increase by the end of July. Unfortunately, it then dipped 22% after Deciphera Pharmaceuticals Inc. reported results of a pivotal phase III study that showed its lead candidate, ripretinib, enabled people with fourth-line and beyond GIST tumors to live a median of 6.3 months before disease progression vs. one month with a placebo. Ripretinib also reduced the risk of disease progression or death by 85%.

On a key secondary endpoint of the Invictus trial, ripretinib demonstrated an overall response rate of 9.4% compared with 0% for placebo (p=0.0504), though that result was not statistically significant. (See BioWorld, August 14, 2019.)

Piper Jaffray analyst Christopher Raymond said the results of Invictus did not disappoint. "Compared to BPMC's avapritinib, which demonstrated PFS of ~3.7mos in ≥4L GIST and has yet to show an OS benefit, we believe this confirms that ripretinib is likely the best-in-class KIT inhibitor in GIST."

Shares of Deciphera Pharmaceuticals Inc. (NASDAQ:DCPH) were trading up 67% for the month at market close Aug. 22.

Positive phase III data on Astrazeneca plc and Merck & Co. Inc.'s PARP inhibitor Lynparza (olaparib) in certain metastatic castration-resistant prostate cancer (mCRPC) patients weighed on index member Clovis Oncology Inc., and its shares (NASDAQ:CLVS) have sunk over 44% in value in August. The company is also targeting mCRPC patients, and is evaluating its own PARP inhibitor, Rubraca (rucaparib), that is currently being evaluated in both phase II (Triton 2) and phase III (Triton 3) studies among men with germline or somatic BRCA mutations.

Positive quarter

Menlo Park, Calif.-based Forty Seven Inc. saw its shares (NASDAQ:FTSV) tumble 19% despite reporting a positive second quarter. The clinical-stage, immuno-oncology company, focused on developing therapies to activate macrophages, is developing its lead product, 5F9, as a first-in-class therapeutic for the treatment of cancer.

In June 2019, the company presented updated initial data from its phase Ib trial evaluating 5F9, a monoclonal antibody against CD47, as a monotherapy and in combination with azacitidine for the treatment of myelodysplastic syndrome (MDS) and acute myeloid leukemia (AML) at the American Society of Clinical Oncology meeting. Among patients treated with the combination regimen, the ORR was 100% in higher-risk MDS and 64% in untreated AML.

Also, the company, after receiving feedback from the FDA, said that a single-arm trial evaluating durability, complete responses and partial responses may be sufficient to support the registration of 5F9 in combination with azacitidine in patients with untreated, intermediate to very high-risk MDS.

During the quarter, Forty Seven closed an $86.3 million underwritten public offering of shares of its common stock and entered into an exclusive licensing agreement with Ono Pharmaceutical Co. Ltd. for the development, manufacture and commercialization of 5F9 as a monotherapy or combination agent in Japan, South Korea, Taiwan and the ASEAN countries. It received an up-front payment of $15.7 million and will be eligible to receive up to an additional $103.3 million in downstream milestones.

Trending up

Puma Biotechnology Inc. is one bright spot, with its shares (NASDAQ:PBYI) trending 16% higher in August thanks to a positive second quarter. Net revenue from its first commercial product, breast cancer drug, Nerlynx (neratinib), was $53.8 million, compared to $50.8 million in the second quarter of 2018.

Also in the quarter, the company reported its licensing partner Knight Therapeutics Inc. had received marketing authorization from Health Canada to commercialize the drug in Canada for the extended adjuvant treatment of women with early stage hormone receptor positive, HER2-overexpressed/amplified breast cancer within one year after completion of trastuzumab-based adjuvant therapy.

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