Seattle Genetics Digs Deeper Into the Proverbial Haystack

3/13/12Follow @xconomy

Everyone who has tried to discover new drugs has heard the one about looking for the proverbial needle in the haystack. At Seattle Genetics, they’ve already found one of the needles they’ve been looking for, and it raises a fascinating new set of questions.

How many more needles are in the haystack? How can you find them, fast? Is there a way to scale up beyond the original niche, to treat larger numbers of people with a personalized medicine?

Seattle Genetics (NASDAQ: SGEN) is making an aggressive push to start answering those questions this year, and the results will go a long way toward determining how many cancer patients it will be able to treat with its new targeted cancer drug.

The quest has taken on greater urgency since August, when Seattle Genetics won FDA approval for its first product, brentuximab vedotin (Adcetris). The drug is designed to zero in specifically on a receptor on cancer cells called CD30, and then unload a potent toxin to kill the tumor. The molecular bulls’ eye is found on couple of rare lymphomas—Hodgkin’s disease and anaplastic large cell lymphoma.

On the road to FDA approval, the Seattle Genetics treatment showed compelling results, causing tumors to shrink for at least 75 percent of patients in clinical trials. More impressive clinical results have rolled in recently among patients with another rare malignancy, cutaneous T-cell lymphoma. And there are so many ideas in the scientific community about this drug that a dozen different investigator-sponsored trials are expected to be underway by years’ end—in which researchers outside the company will test their own ideas of how best to use the therapy.

Despite all the activity, the market for Adcetris in its early days is small. About 8,500 patients get Hodgkin’s disease each year in the U.S. and about two-thirds are cured with standard chemotherapies—the rest eventually relapse and become candidates for the new drug. Like most any drugmaker would do in this situation, Seattle Genetics and its partner, Millennium, have some conventional trials underway that seek to expand the use of the product to broader groups of patients with earlier stages of disease.

But there’s also an unusual scientific experiment underway in which Seattle Genetics, and its research collaborators around the U.S., are casting a wide net for more patients who carry the CD30 receptor. Researchers are being asked to send in tumor biopsies from 2,500 patients around the country to see if their cancer cells have an excessive number of CD30 protein targets sitting there on the surface. Those who do can opt to take the Seattle Genetics drug that’s precisely designed to hit the target. And if this drug works for them like it worked for patients with the rare lymphomas, the study could provide the impetus for a series of new clinical trials that could broaden the usage of Adcetris, and clear some new trails ahead in personalized medicine.

“I don’t want to raise or lower expectations too much, but it’s important for us to see if there are ways we can help more patients,” Seattle Genetics CEO Clay Siegall says.

No one can really say how many patients out there have excessive CD30 markers on their tumors, and therefore might be candidates for the new treatment. But if Seattle Genetics is successful with this approach, it could not only expand its addressable market, but also prompt patients to start thinking of themselves as having “a CD30 positive malignancy” instead of Hodgkin’s disease or anaplastic large cell lymphoma.

Tom Reynolds, chief medical officer of Seattle Genetics

As Tom Reynolds, Seattle Genetics’ chief medical officer, put it, “We’d like to see the field evolve from a disease-based focus to become more molecular target-based. We think we’ll be one of the first out there who will change the way we think about cancer.”

The Seattle Genetics screening study just got under way last fall, but there has been so much enthusiasm from researchers, the company said at a recent investor conference, that more than 1,200 samples have already come in to the Seattle Genetics repository in just a few months. The company has said it expects “more than 50″ patients with high CD30 counts to get treated with Adcetris in the second part of the trial. Preliminary results should be available by the end of 2012, Reynolds says.

While Seattle Genetics has its doubters on Wall Street, who believe it is overvalued because its potential patient population is too small, some of the value is based on projections that the company will be able to expand beyond its current small base of patients. “While we continue to expect investors to focus on the near-term ramp of Adcetris, the longer-term market opportunity is likely to emerge as the more important story in 2012,” said analyst Jason Kantor at RBC Capital Markets, in a note to clients Feb. 28.

Investors should get a better handle on the potential market once the screening study is done. The idea for the study came after Seattle Genetics combed through the scientific literature on CD30 and found lots of unanswered questions. There have been studies over the past 20-30 years about this marker, largely for its use in rare lymphomas that Seattle Genetics has had on its priority list for years. But when you look at solid tumors, the data is thin, Reynolds says. There are anecdotal reports of its showing up on testicular cancers and sarcomas, but they are scattered studies, done without control groups. “Nobody has done a large systemic survey,” to look for CD30 on various tumor types, Reynolds says.

So now that Seattle Genetics has shown it has a pretty good hammer against CD30, it has set out to find out where all the various nails are that it can hit. The company has been working internally to develop a diagnostic test that can look at a tumor biopsy sample in a standard pathology lab and determine the extent to which CD30 is overexpressed on the surface of the cells. But Seattle Genetics is a drug company, not a diagnostics maker, so it is now working with a large partner—it isn’t ready yet to say who—that is developing a companion diagnostic. “It’s best to have a modern diagnostic tool out there, like which exists for Herceptin,” Siegall says.

It’s anybody’s guess what new opportunities this trial might unearth for Adcetris. It could be that 5 percent of ovarian cancer patients have abundant CD30 counts that make them prime candidates, or maybe it will be 5-10 percent of pancreatic cancer patients. As Siegall and Reynolds acknowledged, this study is more about helping Seattle Genetics and researchers form hypotheses about where to test Adcetris in the future than it is about gathering bulletproof evidence in favor of the drug. That kind of hard data will have to come in more precisely goal-oriented follow-up trials. But David Miller, president of Biotech Stock Research in Seattle, said this approach could provide a strong rationale for future clinical trials, and those studies could be attractive because they are likely to be shorter, less risky, and cheaper than investors are accustomed to.

What it amounts to is that the FDA might be willing to allow Seattle Genetics to get additional uses for Adcetris approved for certain CD30-positive patient groups, on the basis of testing just 100 or so patients, as long as it can show two-thirds or more of them are going to respond to therapy, and it’s paired with a companion diagnostic. Many of today’s cancer trials—in which companies can’t precisely predict who will or won’t respond to the drug—are forced to enroll many more patients in order to capture a relatively small percentage who will benefit.

Besides changing the financial equation for drug development, these new uses of Adcetris could change the math for insurers as well. Suddenly an expensive drug like this one—which costs $13,500 for an every-third-week infusion—doesn’t look as expensive when it’s only going to be used by precisely identified niche of patients who are 60-80 percent likely to benefit.

Like any clinical trial, there are plenty of risks. Patients on the Seattle Genetics drug have been diagnosed with PML, a rare and potentially deadly brain infection, and it could be a warning sign if a disproportionate number of those turn up. And while Adcetris looks like a potent hammer against CD30, it’s possible that it won’t be as effective in hitting that target on solid tumors, which can be more difficult for antibody drugs like Adcetris to penetrate, as compared to blood-based liquid tumors. Those are questions that would have to be answered in subsequent trials. But the odds of an anti-CD30 antibody working in people who overexpress the CD30 receptor on their tumors are bound to be high.

“This isn’t like throwing the spaghetti up against the wall and seeing what sticks,” Miller says. “I’m very hopeful they will find additional indications that can expand the (FDA-approved) label. If they can, it will be good for the industry, not just good for the company.”

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  • Well Read Investor

    Not bad for a layman’s coverage on the SGEN strategies. However your questions regarding solid tumors completely omitted the fact that SGN-75 was killing 100% of large cell cancer on solid tumors in the last study I saw published. (Way back in fall/winter 2010) It was so compelling that they created another large cell cancer drug with a new payload specifically for large tumors. This was due to the fact that the chemo cocktail was originally developed or a smaller population of cancer. Now it should be up for Phase II any time.

    The fact that they’re working with a diagnostic testing company to identify patients with CD30 markers will only expand the number of patients in the study group and hopefully help isolate the ones who should be receiving those samples.

    Since their patent is good for another 13-16 years and has a host of large cancer companies licensed to it, including Abbott, Roche, Takeda and numerous others, this is only the beginning for SGEN.

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