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What Blueprint Medicines Just Said About Its Future

By Todd Campbell – Aug 2, 2018 at 6:31AM

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Investors flocked to the clinical-stage biotech following an encouraging second-quarter update.

After reporting second-quarter financial results and updating investors on the progress it's making in developing cancer therapies targeting specific genetic mutations, Blueprint Medicines (BPMC -6.95%) saw its shares rocket 17% yesterday. News that management is initiating new trials and potentially filing its first drug for FDA approval in 2019 helped spark investors' interest, but that wasn't the only thing management said about its future. Read on to learn more about this clinical-stage biotech stock and whether it's right for your portfolio.

Racing toward the finish line

Blueprint Medicines is in a race to develop next-generation, cancer-killing therapies that work in an entirely new way. Instead of targeting cancer based on the location of its origin, Blueprint Medicines is crafting therapies that address cancer in patients based on their genetic makeup. 

A man in a suit looking through binoculars.


Blueprint Medicines' most advanced clinical-stage therapy is avapritinib, an inhibitor of KIT and PDGFRA, two protein kinases that can become overly active in patients with gastrointestinal stromal tumors (GIST) and systemic mastocytosis because of genetic mutations.

The company enrolled the first patient in its phase 3 GIST clinical trial in June, and that trial will evaluate avapritinib head-to-head against the currently approved nine-figure cancer drug, Stivarga, in third-line and fourth-line patients with advanced disease. Management says updated data from Blueprint Medicines phase 1 trial in second-line or later GIST should be available later this year and that it's on track to file for FDA approval in fourth-line GIST in the first half of 2019. If the second-line data reads out positively, then management plans to begin enrolling patients in a second-line GIST phase 3 trial next year.

Blueprint Medicines presented phase 1 clinical data for avapritinib in advanced SM during Q2, including an 83% overall response rate, and management says it plans to start two registration-enabling phase 2 trials in advanced SM by the end of 2018. According to the company, avapritinib's addressable patient population in the EU, Europe, and Japan, including both GIST and SM patients, is north of 30,000 people.

The company's also continuing to add patients to the expansion part of its phase 1 trial of BLU-667, a RET (rearranged during transfection) fusion targeting therapy. In April, management said BLU-667 delivered a preliminary overall response rate of 50% in 14 patients with non-small-cell lung cancer (NSCLC) and 40% in 25 patients with medullary thyroid cancer (MTC).

Solid financial footing

The company's balance sheet got a bit better last quarter following the receipt of $40 million in upfront licensing money from CStone Pharmaceuticals, a Chinese biopharma company that's licensed the rights to develop and commercialize avapritinib, BLU-667, and a third drug, BLU-554, in mainland China. 

Also, the company pocketed a $10 million milestone payment from Roche Holdings in the quarter tied to their 2016 collaboration agreement. As part of that deal, Roche secured options to up to five cancer immunotherapies in exchange for $45 million in upfront money and promises of up to $965 million in option fees and milestones tied to pre-clinical, clinical, regulatory and sales-based milestones.

The additional $55 million inflow of cash partially offset cash burn from research and development and general and administrative spending, allowing Blueprint Medicine to finish Q2 2018 with $617 million in cash on the books. Based on its current spending projections, management believes that's enough money to fund its operations into the back half of 2020.

Competition mounts

The business update, including the chance for an FDA filing early next year, has sparked investor interest, but Blueprint Medicines isn't the only one pursuing therapies that target these genetic mutations. 

For instance, Loxo Oncology (LOXO) is working on a RET-fusion drug, Loxo-292, and it reported data earlier this year that includes response rates of 77% in NSCLC patients and 45% in MTC patients. Also, Deciphera Pharmaceuticals (DCPH -2.96%) has a KIT and PDGFRA inhibitor, DCC-2618, in trials for late-line GIST. Earlier this year, it reported a 24% overall response rate in second-line and third-line GIST patients, and a phase 3 trial in second-line GIST is expected to begin this year. 

Is it a buy?

The data reported so far is solid, but results from trials involving more patients are necessary before we can say for sure that targeting RET fusions and KIT and PDDGa mutations is effective and safe. It's also unclear if Blueprint Medicines will be able to outmaneuver its competitors.

Nevertheless, precision medicines such as those Blueprint Medicine is developing could revolutionize cancer treatment in the future, so owning a basket of companies, including Blueprint Medicine, in a diversified portfolio could be a smart bet.

Todd Campbell has no position in any of the stocks mentioned. His clients may have positions in the companies mentioned.  The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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