What happened
Shares of Odonate Therapeutics (ODT), a company developing a new way to apply an old chemotherapy, rose 70.7% in June, according to data from S&P Global Market Intelligence. Breezing through an interim assessment early in the month followed by a successful public offering boosted investor confidence.
So what
Odonate Therapeutics began a 600-patient phase 3 study called Contessa shortly after its initial public offering in December 2017. The independent data monitoring committee privy to which advanced-stage breast cancer patients were receiving Odonate's lead candidate, Tesetaxel, and which were given placebos recommended the trial continue without any modifications following an interim assessment.
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Passing an interim assessment near the beginning of June inspired the company to try raising $123.5 million near the end of the month. Reports of company insiders, including the CEO, betting their own money on Tesetaxel's future probably did more than anything else to drive the stock higher last month. The important thing to remember about watching insiders is that they have lots of good reasons to sell their shares, but just one good reason to buy.
Now what
Odonate expects to complete enrollment of Contessa in the second half of 2019, and top-line results should be ready in 2020. While some insider buying is usually a great sign, it's important to remember that there's a lot we still don't know. Tesetaxel, which is orally administered, is a chemotherapy of the taxane class, which has been available up to this point only as an intravenous infusion.
In a mid-stage ascending dose study with metastatic breast cancer patients, Tesetaxel on its own helped shrink tumors for 45% of patients treated, but there wasn't a control arm for comparison. In the Contessa study, patients received Odonate's candidate plus another oral chemotherapy called capecitabine at a low dose or capecitabine on its own.
Passing a futility analysis is a lot better than failing on the spot, but it isn't exactly a positive signal, either. If Tesetaxel delivered a particularly strong benefit, the data monitors would have ended the trial early so everyone could take part. Although this $1.15 billion company could have a blockbuster cancer treatment on its hands, it might be best to wait for some comparison data before blindly following company insiders.
