While the general markets are leaning toward positive territory following a quiet summer period, the enthusiasm for biopharma equities remains muted. One of the most closely monitored therapeutic areas is oncology. Earlier this year, public companies developing innovative medicines in that area had enjoyed strong support; however, investors now appear to be more selective in backing companies in that sector.

Since the end of August, the BioWorld Cancer index has slipped 3.3% in value and for the year is down 4% compared to the Dow Jones Industrial Average and Nasdaq Composite index that both have recorded year-to-date gains of 16% and 23%, respectively. (See BioWorld Cancer Index, below.)

BW-cancer-index 10-23

After cancer companies reported their latest clinical trial results at the 2019 annual conference of the European Society of Medical Oncology (ESMO) in Barcelona, Spain, in late September, there has been a modest uptick of 0.73% in the performance of the index so far this month.

Notable index group member gainer is Vancouver, British Columbia-based Zymeworks Inc., whose shares (NYSE:ZYME) are up 21% in October and have doubled in value since the beginning of the year.

At ESMO, the company reported updated data from an ongoing phase I trial evaluating ZW-25, a bispecific antibody, in 58 patients with HER2-expressing solid tumors, including biliary tract cancer, colorectal cancer, gynecological cancers and gastroesophageal adenocarcinoma. At the time of data cutoff, 46 of 58 patients were response-evaluable. Overall, a majority of patients experienced a decrease in their target lesions, with a disease control rate of 72%, comprising 16 (35%) patients with partial responses and 17 (37%) with stable disease. The objective response rate in the six evaluable biliary tract cancer patients was 67%, with most patients experiencing disease control greater than six months.

Based on the data from the study, the company reported it has initiated a broad clinical development program for ZW-25 in multiple HER2-expressing cancers. In June, it bolstered its bank balance with a $201.3 million underwritten public offering to accelerate and expand the global development of ZW-25 both as a single agent and in combination with other cancer agents in a variety of HER2-expressing tumors.

Shares of Seattle Genetics Inc. (NASDAQ:SGEN) have also performed well recently and are up 54% so far this year. Almost a quarter of that increase was catalyzed by news that an antibody-drug conjugate it is developing with Tokyo-based Astellas Pharma Inc., when combined with Keytruda (pembrolizumab, Merck & Co. Inc.), shrank tumors in a majority of people participating in a phase I first-line bladder cancer study. Already the subject of a BLA granted priority review for second-line metastatic urothelial cancer, the new phase I data showed enfortumab vedotin plus pembrolizumab could prove safe, with "encouraging clinical activity" in first-line patients who had not been previously treated with platinum-based chemotherapy, the companies reported. (See BioWorld, Oct. 1, 2019.)

Cancer vaccine

Small cap Neon Therapeutics Inc., of Cambridge, Mass., which is using its neoantigen platform to develop both vaccine and T-cell therapies, has also enjoyed a 27% boost in its shares (NASDAQ:NTGN) this month.

The company's investigational personal neoantigen vaccine, NEO-PV-01, is custom-designed and manufactured based on the mutational fingerprint of each individual patient. NEO-PV-01 is being studied in multiple ongoing phase Ib trials, including an ongoing study evaluating the vaccine in combination with Opdivo (nivolumab, Bristol-Myers Squibb Co.) in patients with metastatic melanoma, smoking-associated non-small-cell lung cancer (NSCLC) or bladder cancer. Top-line results were reported in July from 82 patients in the NT-001 trial, demonstrating prolonged and consistent improvements in progression-free survival (PFS) that compare favorably to those observed with checkpoint inhibitor monotherapy, based on historical benchmark data. At a 13.4-month median follow-up in 34 patients with metastatic melanoma, the median PFS had not yet been reached; in 27 patients with metastatic NSCLC, median PFS was 5.6 months; and in 21 patients with metastatic bladder cancer, median PFS was 5.6 months.

Headwinds

Negative investor sentiment has pushed down the share value of Los Angeles-based Puma Biotechnology Inc. (NASDAQ:PBYI). So far in October the shares are trading lower at 38%, contributing to a 67% drop year-to-date. Although sales of its breast cancer drug, Nerlynx (neratinib), which was approved in 2017, got off to a great start, they dropped in the first quarter of this year due to patients stopping treatment because of diarrhea and other side effects, causing investors to worry about the long-term prospects for the drug.

In the second quarter, Cowen analysts noted that "Nerlynx 2Q sales were in line to slightly better after disappointing 1Q miss, but flat Y/Y volumes suggest longer-term trajectory has slowed."

The company will be hoping that the FDA approval of a labeling supplement for the drug will help boost sales going forward. The label now includes safety information based on interim results from the company's phase II CONTROL trial, evaluating antidiarrheal prophylaxis or dose escalation in the reduction of neratinib-associated diarrhea that has a primary endpoint of the incidence of grade 3 or higher diarrhea. Interim data from the trial showed that the addition of prophylactic treatment with loperamide plus budesonide reduced the discontinuation rate due to neratinib-associated diarrhea to 11% vs. a discontinuation rate of 18% with loperamide alone.

According to Alan Auerbach, president and CEO of the company, "We believe FDA approval of the labeling supplement will help us to ensure that physicians and patients are better informed in selecting prophylactic therapy that may improve the tolerability of the drug."

Earning respect

With few other potentially stock-moving catalysts on the horizon for the index group companies before the end of the year, they will have a chance to impress investors and bring them back into the fold if they come out with impressive third-quarter financial reports, which will start to be released over the next few weeks.