Onyx Pharmaceuticals Inc. and partner Bayer Healthcare Pharmaceuticals Inc. stole the show at this year's American Society of Clinical Oncology meeting with results from the Phase III trial with Nexavar (sorafenib) in liver cancer, but plenty of buzz circulated around larger-cap biotech names, too, including Amgen Inc. - whose investors might have grown more nervous about the fate of the firm's EPO drugs, despite the Ilypsa Inc. takeover - and Genentech Inc., perhaps breathing easier as a result of data regarding GlaxoSmithKline plc's Tykerb.
And there was more. ASCO, the most-watched scientific event in the industry, set loose an avalanche of data, though the "year of Avastin" remains unmatched. That was 2003, when Genentech offered Phase III data from a 900-patient study showing that Avastin (bevacizumab) plus chemotherapy boosted colorectal cancer patients' chances of survival by 50 percent compared to those given chemo alone. The hazard ratio was 0.65 (p=0.00003), and Genentech had designed the study to detect a hazard ratio of 0.75, which would correspond to a 33 percent increase in survival.
The Avastin story brought about "a moment of clarity with respect to U.S. biotech and, to a certain extent European biotech," recalled Robbert van Batenburg, head of research with Louis Capital Markets. "They had been neglecting oncology for lifestyle drugs, diabetes and cardiovascular [compounds]," he said.
This, of course, has changed. Witness, for example, such drugs as Pfizer Inc.'s Sutent (sunitinib), a multi-tyrosine kinase inhibitor approved for gastrointestinal stromal tumors and advanced kidney cancer in late January 2006. Pfizer got the compound through its Pharmacia Corp. acquisition almost four years earlier.
FDA clearance for Sutent came about a month after the nod for Onyx/Bayer's Nexavar, first labeled for advanced kidney cancer, which became a star in liver cancer at the latest ASCO. The firms had reported interim results in February of this year showing that the pivotal study met its endpoint of improvement in overall survival earlier than expected, but data disclosed at the meeting proved even better: a 44 percent increase in overall survival in patients receiving Nexavar compared to placebo.
Remarkably, median overall survival was 10.7 months in the Nexavar-treated group vs. 7.9 months in the placebo group, an important advance in a disease for which existing therapies confer no longer life.
On the subject of kidneys, Amgen disclosed near the finish of ASCO that the firm will pay $420 million for Ilypsa, taking on a Phase II phosphate binder known as ILY101 for chronic kidney disease.
The oral non-metal polymer's mechanism of action is similar to that of Genzyme Corp.'s Renagel (sevelamer hydrochloride), U.S.-approved in 1998 for patients with end-stage renal disease on hemodialysis. Genzyme's Renvela (sevelamer carbonate) will target the larger market of CKD, and the firm already submitted Renvela's new drug application late last year. Positive Phase III data were disclosed in April.
"Amgen has a reasonable track record with acquisitions," van Batenburg said. The most obvious example is the $2.2 billion buyout of Abgenix Inc., disclosed in late 2005 - a deal that gave Amgen Vectibix (panitumumab), approved by the FDA for colorectal cancer last fall.
"It's their most important drug right now," he added, acknowledging that Vectibix hardly rocked the house at ASCO. In March, Amgen stopped a Phase III trial testing the compound with Genentech's VEGF inhibitor Avastin and chemotherapy, due to lack of efficacy, plus concerns about toxicity. European regulators have issued a negative opinion on Vectibix, and Amgen appealed.
Regarding ILY101, Ilypsa partnered the drug in Japan with Astellas Pharma Inc. when the compound was still at the Phase I stage, and results from the Phase II dose-ranging study with ILY101 should be available within months. Amgen might push the drug into Phase III this year. So, with Renvela in CKD, Genzyme is ahead of Ilypsa (which would become a wholly owned Amgen subsidiary under the buyout deal), and Amgen has other things to worry about anyway.
Last week, the firm posted comments on proposed reimbursement changes by the Center for Medicare & Medicaid Services with regard to erythropoietin stimulating agents - the anemia drugs Aranesp (darbepoetin alfa), Epogen (epoetin alfa) and Procrit (epoetin alfa, sold by Johnson & Johnson).
CMS proposed in May to curtail paying for ESAs given to beneficiaries with certain cancers and related neoplastic conditions, after an FDA panel advised curbing EPO use and a "black box" warning was added to labels of the products, approved for anemia caused by chemo in cancer patients, and for kidney failure. The label add-on cautions that the drugs, when given to target a hemoglobin level of >12 g/dL, boosted the risk of death and cardiovascular events, reduced time to tumor progression in patients with advanced head and neck cancer who got radiation therapy, and shortened overall survival as well as hiked deaths because of disease progression at four months in metastatic breast cancer patients on chemo.
Van Batenburg downplayed the EPO risk. "It's probably going to be less severe than people have been pricing in," he said, citing a recent study by Northwestern University that favors ESA's. He also noted that a good portion of public comment to the CMS seems to favor Amgen.
"There's going to be a lot of headline risk" in the coming months for Amgen, though, van Batenburg said. The deadline for comment to CMS on ESA's is June 13 (with a decision due in August), Amgen will report earnings a week later, and the trial over F. Hoffmann La-Roche Ltd.'s planned entry into the ESA market, Mircera, is due to start this summer.
Even with all the hubbub, Amgen might make more acquisitions, van Batenburg speculated, since the firm has very little of its own that shows promise.
Amgen will not push AMG-706, an oral VEGF inhibitor tested in a 180-patient Phase II trial for thyroid cancer, and a study with AMG-102, an antibody to the ligand for the c-Met receptor, got no response in 31 patients (as compared with other c-Met drugs reporting at ASCO, such as ARQ 197, the Phase I candidate from ArQule Inc., and XL880, from Exelixis Inc., also in Phase I, which performed better).
The company does have AMG-531 for immune thrombocytopenia purpura and, at an earlier stage of development, for myelodysplastic syndromes. AMG-531 stimulates the thrombopoietin receptor to boost platelets, and could be the subject of a new drug application for ITP - a smallish indication - in the second half of this year. AMG-655, a fully human monoclonal antibody that targets TRAIL receptor 2 patients with advanced solid tumors, proved encouraging at ASCO, but it's only at Phase I.
"With Amgen's stock being so cheap, it's very hard [to do the necessary buyouts], because they will be dilutive," he said, noting that the firm "almost by default, is forced to do acquisitions in cash, and it's going to be always on the small side."
He mentioned Celgene Corp. as a possible takeover candidate, but "that's going to be very hard to buy, and it's probably one of the smaller ones within the realm of the first-year biotech companies focused on oncology," he said. "[ImClone Systems Inc.] to a certain extent would be the same. ImClone is tied in with [Bristol Myers Squibb Co. and Merck KGaA], and the whole Erbitux story is very stretched."
ASCO data with the approved cancer drug showed it slightly prolonged survival in previously untreated colorectal cancer patients on chemo. Results showed that the addition of Erbitux (cetuximab) increased survival to 8.9 months vs. 8 months in the chemo group.
Onyx "has probably run away now," van Batenburg said. "[Amgen] would still be able to buy it if they wanted to, but they would most likely wait now, to get a little of the enthusiasm out of the stock. You could go farther down the line" and find other, smaller cancer-focused firms that might be of interest to Amgen, he said. "I'm sure there is going to be something interesting in there."
Sure enough, just after van Batenburg made his remarks, Amgen disclosed a plan to buy Alantos Pharmaceuticals Inc. for $300 million cash, gaining rights to a DPP-IV inhibitor in Phase IIa for Type II diabetes, as well as Alantos' matrix metalloproteinase-13 (MMP-13) inhibitor program in osteoarthritis.
The notion of a pharma firm taking over Amgen is not entirely farfetched, in van Batenburg's view. "You're buying a good oncology franchise, albeit damaged, with a lot of free cash flow," he said. Sanofi-Aventis Group has made known its interest in buying other firms. Merck has hit the acquisition trail with last year's purchase of Serono SA for $13.3 billion.
J&J "missed the boat big time last year on buying Guidant Corp., which went to Boston Scientific Corp.," though J&J would not likely want Amgen, with whom it already shares the EPO market, he told BioWorld Financial Watch. "But you have [Novartis AG], with a strong oncology franchise and not that many promising drugs in the pipeline and they're very well capitalized. At some point they were in the competition to buy [Aventis AG] but they had to walk away from it," and Sanofi-Synthelabo SA bought Aventis.
"I'm not saying [an Amgen takeover] is obvious at this point, but say Amgen gets another hit over the head that could spook investors out of the stock," van Batenburg said. "This could be a more reasonable scenario."
Also at ASCO, GSK's Tykerb (lapatinib) - approved in March for second-line metastatic breast cancer - yielded less than spectacular results when added to paclitaxel in the first-line setting in the overall population of HER2-positive and HER2-negative disease, leaving that space to Genentech's Herceptin (trastuzumab), at least for now.
"I was somewhat disappointed with what Genentech brought forth [at the meeting], although part of it was probably expected," van Batenburg said, referring to trials with Avastin and with Omnitarg (pertuzumab). The latter humanized antibody is the first in a new class of investigational agents known as HER dimerization inhibitors.
With ASCO finished, "all eyes will go back on Amgen," he predicted, as company officials "steer themselves through the minefield ahead this summer."