It turns out Incyte (NASDAQ:INCY) didn't have any special sauce after all. Following lackluster results that led Roche Holding (NASDAQOTH:RHHBY) to abandon the IDO inhibitor GDC-0919 last year, industry watchers had remained confident that Incyte's IDO inhibitor, epacadostat, would avoid a similar fate. That confidence appears to have been misplaced. On Friday, Incyte revealed that epacadostat's most advanced clinical cancer trial has failed. The bad news casts doubt on epacadostat's future and the future of IDO inhibition altogether.
Improving PD-1? Nope
Cancer cells can hijack the indoleamine 2,3-dioxygenase (IDO) protein to suppress the immune system, so researchers have been hopeful that inhibiting IDO could restore immune system responses and help other cancer-killing drugs work better.
Unfortunately, this doesn't appear to be the case.
Despite encouraging overall response rates in small mid-stage studies, data from larger studies have failed to demonstrate that adding IDO inhibitors like epacadostat to a commonly used class of cancer drugs -- PD-1 checkpoint inhibitors -- is particularly effective.
Evidence of this first appeared last year, when Roche Holdings walked away from NewLink Genetics' (NASDAQ:NLNK) IDO inhibitor, GDC-0919, which, like epacadostat, targets the IDO enzyme directly, rather than via cell signaling.
Roche's decision followed data showing only a mild benefit associated with adding GDC-0919 to Roche's PD-L1 checkpoint inhibitor, Tecentriq. Only 9% of patients responded to that two-drug combination, and all of the responses were partial responses (in other words, the tumors didn't go away completely). In the end, the improvement was too small to convince Roche to commit any more time to GDC-0919's development.
Roche's decision to give up on GDC-0919 appears even smarter following Incyte's disappointing news. Although teaming up Incyte's epacadostat with Merck & Co.'s (NYSE:MRK) PD-1 checkpoint inhibitor Keytruda delivered overall response rates of 30% to 35% in early trials, a phase 3 melanoma study of the combination appears to be a total bust.
Following analysis of trial data, an external review committee concluded that treating patients with unresectable or metastatic melanoma with epacadostat and Keytruda failed to extend progression-free survival when compared to therapy with Keytruda alone. The committee also said it didn't expect the two-drug combination would improve overall survival either. That one-two punch will most likely force Incyte to shutter the study.
Not much that's encouraging
Sometimes, companies can parse trial data and salvage drugs based on efficacy in study subpopulations. Unfortunately, Incyte's comments don't seem to signal that will happen this time. According to the company, the trial's hazard ratio of 1 (indicating low efficacy) suggests it's unlikely that there is a group that would potentially benefit from the treatment.
Incyte's other trials are still continuing. There's always the chance that epacadostat's results in those studies will be better, but that's a risky bet. According to management, those studies might need to undergo changes. That doesn't bode well for their success or the success of other IDO inhibitors that are in trials at Incyte's competitors.
Overall, Incyte's revenue was $1.5 billion last year, up 39%, and as of Dec. 31, it had $1.2 billion in cash and no debt on its balance sheet, so this isn't game over for the company. It is, however, a big setback, and that should keep investors on the sidelines for now.