Motley Fool Rule Breakers pick Exelixis (Nasdaq: EXEL ) released data on its lead drug this morning, showing favorable results in the early stages of a trek toward what could be a crowded market. The drug dubbed XL647 is the compound that just six weeks ago had investors doubting Exelixis after GlaxoSmithKline (NYSE: GSK ) refused to take over its development.
XL647 is in testing as a treatment for nonsmall cell lung cancer (NSCLC) as well as other solid tumors. The data presented today at an international lung cancer medical conference were from a small phase 2 study in previously untreated NSCLC patients. In the study, eight out of the 30 people who took the drug experienced a partial response, otherwise known as a reduction in the tumor's size.
Other treatments for NSCLC on the market include Genentech's (NYSE: DNA ) Avastin and its partner, OSI Pharmaceuticals' (Nasdaq: OSIP ) Tarceva, which inhibit different receptor pathways.
XL647 by itself inhibits both pathways, as well as targeting another enzyme common to several types of cancer. By inhibiting the same targets as both Avastin and Tarceva, XL647 may potentially be more effective (but also possibly induce more adverse events) than these other two drugs.
AstraZeneca (NYSE: AZN ) also has a compound similar to XL647 named Zactima in its pipeline. Other potential competition includes GSK's Tykerb, which it is positioning to expand into treating NSCLC, and ImClone Systems' (Nasdaq: IMCL ) Erbitux.
While generally not comparable due to differing patient profiles and study criteria, 8.9% of NSCLC patients treated in the pivotal phase 3 study of OSI's Tarceva experienced partial or complete responses. Earlier in the year, Genentech announced that Avastin in combination with chemotherapeutic agents produced a 34% response rate in NSCLC patients. So XL647's 27% partial response rate as a single agent compares very favorably to these other compounds.
But even if it shows greater efficacy than comparable drugs, XL647 is not a lock for future FDA approval. The drug obviously treats a tough condition, but its safety profile relative to Avastin and Tarceva won't be known until Exelixis gets more patients treated with the drug. An unfavorable relative safety profile may be the highest risk to XL647's development.
It's refreshing when a drugmaker's management isn't dishonestly bluffing when it defends the quality of its compounds. Exelixis may be proven right when it calls the data on XL647 "compelling" like it did following GSK's refusal to pick up the drug. We won't know for several years though, as phase 3 studies of the drug won't start until early 2008.