Prostate Cancer Drug Vaults OncoGenex Onto Investor Radar Screens
The best-performing stock on the Nasdaq last week was a little biotech company from the Pacific Northwest that few people had heard of before.
The company was OncoGenex Pharmaceuticals, a cancer drug developer based in Vancouver, BC and Bothell, WA, with technology licensed from Carlsbad, CA-based Isis Pharmaceuticals. Before last week, OncoGenex appeared to be heading nowhere fast. Investors gave it a market value that was less than the cash it had in the bank. Then on Dec. 3, it grabbed a lot of attention. That morning, OncoGenex reported on a clinical trial that showed its experimental drug, when added to a chemotherapy combination, helped prostate cancer patients live about 10 months longer than if they got the chemo alone.
The OncoGenex stock chart (NASDAQ: OGXI) tells the story of what happened next. Trading volume the day before the news was 3,100 shares. The day of the news: 570,700. The stock’s price has almost tripled since the announcement, climbing to $6.06 at Monday’s close. Since prostate cancer affects more than its share of wealthy, powerful men later in life (think Intel co-founder Andy Grove, financier Michael Milken, and former New York Mayor Rudy Guiliani) anything that works is bound to generate big-time headlines. That explains why OncoGenex CEO Scott Cormack had a whirlwind week of meetings in New York last week with investors eager to learn more about his drug. Prostate cancer is one of the nation’s leading cancer killers, responsible for the deaths of 30,000 men in the U.S. each year, according to the American Cancer Society.
“Suddenly, people are looking at this drug and saying, ‘Wow,’” Cormack said by phone, after he returned home to Vancouver, BC on Friday.
It’s quite a reversal of fortune for a company that was left for dead a few months ago. OncoGenex tried to go public last year, and failed. It got its stock listing in August when it essentially took over what was left in the ashes from Bothell, WA-based Sonus Pharmaceuticals. (Sonus failed to show its reformulated chemo drug was any better than the original, and didn’t have much left other than some cash in the bank, some devastated employees, and a stock ticker.)
To scrape by with enough cash, OncoGenex’s Cormack laid off half its staff when he took over, leaving the company with just 27 employees. By the end of September, it had $17.2 million in cash and investments left as a merged company, enough to run “through 2009.”
That was all before the results from Dec. 3. The randomized study enrolled 82 men whose disease had spread or worsened after getting the usual hormone-deprivation therapy. Patients who took the experimental drug, OGX-011, in combation with docetaxel (a chemo drug marketed at Taxotere) and prednisone (an immune suppressor) had a 27.5 month median survival time, compared with 16.9 months for those on those two treatments alone. The difference between those two groups, if it can be confirmed in a larger trial, is huge. For comparison, docetaxel was approved for prostate cancer based on its ability to prolong lives by just an extra 2.4 months. That product is used for multiple cancers, and generated more than $3 billion in sales last year.
The OGX-011 study was sponsored, conducted, and analyzed not by OncoGenex, but by the National Cancer Institute of Canada, and was supported with a grant from the Canadian Cancer Society. A fuller picture of the data is expected to be presented at the American Society of Clinical Oncology (ASCO) 2009 meeting in Orlando.
This drug has its origins in work done by Martin Gleave, a urologist at the Prostate Centre Vancouver General Hospital. His idea was that if you could block clusterin, a protein associated with helping tumors resist chemotherapy, then the chemo would do a lot better job of killing cancer cells. OncoGenex negotiated for a license from Isis to develop an antisense drug that could serve as like a genetic mirror image that would shut down production of clusterin. The drug is given in a 2-hour intravenous infusion once a week.
The science and clinical trial results were a lot to absorb for most people on the Street, Cormack says. An earlier peek at the data was presented at the ASCO meeting in 2007 in Chicago. The trial showed it reached its main goal of lowering PSA scores, a measurement of tumor aggressiveness that’s thought to correlate with survival. It also showed that it could slow the spread of tumors, but again, that’s just a “surrogate” goal that’s supposed to give researchers a sense of whether the drug is reaching the gold standard measurement of prolonging lives.
Now that the survival data is pointing in the right direction, and it will be another six months before we get to see a full picture at ASCO, Cormack is getting peppered with questions about what comes next. He’s looking to sign a partnership to help him finish a pair of Phase III clinical trials of OGX-011. One has a primary goal of prolonging lives of men on a second round of chemotherapy for their terminal prostate cancer, and the other aims to relieve cancer-related pain.
The first survival trial will enroll about 765 patients randomly assigned to OGX-011 and docetaxel or docetaxel on its own. The second trial will enroll about 300 patients on the same head-to-head comparison. The total budget for these studies is about $70 million, and OncoGenex had $17 million in cash in the bank at the end of September, so that’s why Cormack needs to rustle up a partner, and fast.
The clinical development team responsible in carrying this out for OncoGenex has a couple of familiar names from Seattle-based Corixa. Cindy Jacobs is the company’s chief medical officer, and the vice president of regulatory affairs is Monica Krieger, who both played a part in getting tositumumab (Bexxar) approved by the FDA. The team is a lean one, with just 27 total employees between Vancouver, BC and Bothell. Cormack isn’t in either office a whole lot, spending more of his time in New York, Boston, and San Francisco in an effort to boost his company’s stock price.
Cormack notes that there aren’t many prostate cancer drug candidates in late-stage development, other than candidates from Seattle-based Dendreon, Los Angeles-based Cougar Biotechnology, London-based AstraZeneca, and San Francisco-based Medivation. Cougar Biotech, he notes, has a market valuation of more than $500 million, and doesn’t have data showing its drug boosts survival like Oncogenex’s. His company, meanwhile, has a stock market value of $33 million at Monday’s close.
For now, Cormack sounds like he’s content to let the “data speak for itself” rather than issue a press release with a bunch of bold quotes from leading cancer physicians. He wants to save the scoop for when it will have a bigger impact at next year’s ASCO meeting, the largest annual confab of cancer docs.