This week's Biotech Stock Mailbag will address some current controversies and burning questions in our little corner of the investment world.
Why the hell is Puma Biotechnology (PBYI) trading higher after the successful readout of Roche's (RHHBY) "APHINITY' study of Perjeta in adjuvant breast cancer?
What are the arguments for and against TG Therapeutics (TGTX) securing approval for ublituximab in high-risk chronic lymphocytic leukemia (CLL)?
Did Aurinia Pharmaceuticals (AUPH) make a change to the primary endpoint of its phase III study of voclosporin in lupus nephritis? Are regulators okay with it?
Let's get started.
The March 2 announcement by Roche that Perjeta met the primary endpoint in the APHINITY study caused Puma shares to fall from $38 (the March 1 close) to an intraday low of $29. The drop in Puma's stock price made sense because a Perjeta win in adjuvant breast cancer was widely seen as a loss for neratinib, Puma's competing adjuvant breast cancer drug.
But Puma didn't stay down for long. The stock rebounded almost immediately. On Wednesday, Puma shares not only fully recovered from the APHINITY fall but closed higher at $40.30. On Thursday, Puma closed at $39.25.
What? How? Why? A few explanations, after speaking with a few Puma bulls. (Yes, Puma bulls exist.)
1. The APHINITY study announcement was a "clearing event." Perjeta was expected to work in adjuvant breast cancer so Puma bulls were waiting for it to pass before stepping back in to buy.
2. The detailed data from APHINITY (which no one but Roche has seen) may leave an opening for neratinib to still win a meaningful share of the adjuvant breast cancer treatment market.
At the Cowen healthcare conference this week, Roche executives, speaking about APHINITY results, suggested the subgroup of enrolled breast cancer patients with node positive/HR negative disease were likely to derive the most benefit from Perjeta. Puma bulls seized on this Roche talk with glee because neratinib appears to be most effective in patients with breast cancer that is HR positive, according to data from Puma's EXTENET extended adjuvant study (the basis for neratinib's marketing submission.)
Puma CEO Alan Auerbach has long insisted neratinib can survive a positive APHINITY trial if Perjeta did not work well in HR positive disease. Roche comments this week suggest that might be true, but again, no one has seen actual data. Roche is expected to present detailed data from APHINITY at the ASCO annual meeting in June.
3. Will Roche even seek regulatory approval for Perjeta in adjuvant breast cancer?
Yes, although there was some confusion this week caused by an ambiguous statement attributed to Roche Chief Medical Officer Sandra Horning in the company's March 2 announcement of the positive APHINITY trial results.
"We look forward to discussing these adjuvant results with global regulatory authorities," Horning said.
Horning did not say Roche was submitting the adjuvant results for approval, which some investors interpreted as, perhaps, a sign the Perjeta data were not as good as hoped. That, in turn, provided a boost to Puma's stock price.
Roche spokesman Ed Lang, reached Wednesday, clarified the situation. "Our plan is to discuss these data with the FDA as soon as possible, and then submit," said Lang. "We have two goals: First we hope to convert the current accelerated approval in the neoadjuvant setting to a full approval, and second we hope to bring this treatment option to patients as soon as possible in the adjuvant setting."
The ASCO meeting (June 2-6) is setting up to be a big event for both Roche and Puma, assuming the Perjeta APHINITY data are showcased there.
Moving on to the bull-bear fight over TG Therapeutics. Bears believe this week's GENUINE phase III study results in previously treated, high-risk CLL -- ublituximab/Imbruvica overall response rate of 80% compared to 47% for Imbruvica alone -- won't be enough to convince FDA to grant accelerated approval to ublituximab, an anti-CD20 monoclonal antibody.
TG Therapeutics changed the design of the GENUINE study last October to eliminate progression-free survival (PFS) as a co-primary endpoint, leaving only overall response rate. The planned enrollment was also cut from 330 to 120 patients. The changes allowed TG Therapeutics to complete the GENUINE study faster, but it also nullified the Special Protocol Assessment (SPA) reached with the FDA spelling out the regulatory requirements for ublituximab's approval.
FDA is often displeased when companies renege on SPAs and fail to provide the previously agreed-upon clinical data necessary for approval.
While TG Therapeutics acknowledges the added risk of the lost SPA, the company still intends to meet with the FDA "to discuss the filing of the data for accelerated approval." The company's supporters argue the nearly doubling of the response rate in ublituximab's favor should be strong enough clinical evidence for FDA to approve.
The question of medical need for previously treated, high-risk CLL patients is the other, simmering issue. TG Therapeutics bears make the point these patients can be treated today with a combination of Rituxan, Roche's long-approved anti-CD20 monoclonal antibody, and Imbruvica. Therefore, ublituximab is not filling an unmet medical need and accelerated approval should be off the table.
Bulls counter with the argument that Rituxan is not specifically approved for use in previously treated, high-risk CLL patients. Doctors prescribe Rituxan/Imbruvica off label. From an FDA perspective, therefore, an unmet medical need still exists.
[TG Therapeutics is a member of the Gnarly Nine. Read more here.]
I had lunch Thursday with a healthcare fund manager and longtime TG Therapeutics shareholder. We talked about the ublituximab CLL-approval controversy. His reaction: Bemused. He owns TG Therapeutics for ublituximab but because he believes the drug will eventually be approved for multiple sclerosis (following the development plan used by Roche to win the approval of ocrelizumab -- another anti-CD20 monoclonal antibody.)
My TG Therapeutics shareholder/lunch date didn't participate in this week's $50 million stock offering, but he suspects (but doesn't know for sure) that the funds who did were also more interested in ublituximab-multiple sclerosis than ublituximab-CLL.
I'll close out this week's Mailbag with Aurinia Pharmaceuticals. The stock has doubled in price since March 1 when positive, updated phase II study results of voclosorin in lupus nephritis were announced.
On Thursday, I spoke to Celia Economides, Aurinia's head of investor relations, to clarify a few questions that have cropped up about the company's plans for the upcoming voclosorin phase III study in lupus nephritis. Patient enrollment is expected to start in the second quarter.
