The European Society for Medical Oncology (ESMO) meeting, which wrapped up on Tuesday, featured presentations from a few smaller companies that saw their stock prices move substantially after the meeting.
|Company||Return Since Start of Meeting|
|Seattle Genetics (NASDAQ:SGEN)||11.3%|
|G1 Therapeutics (NASDAQ:GTHX)||(32.1%)|
|Mirati Therapeutics (NASDAQ:MRTX)||(14.4%)|
Hitting a double
Seattle Genetics wowed investors with a pair of clinical trials.
Tucatinib helped 52.2% of late-stage colorectal cancer patients when combined with Roche's Herceptin. The results should give investors confidence in a late-stage study called Her2climb, testing tucatinib in patients with metastatic breast cancer, which is expected to read out later this year.
Enfortumab vedotin (EV), which is up for Food and Drug Administration review in patients with late-stage urothelial cancer, also appears to help previously untreated patients with the same type of cancer when combined with Merck's (NYSE:MRK) Keytruda. A solid 71% of patients responded to the combination.
Immunomedics' sacituzumab govitecan (SG) produced a response in 29% of patients with late-stage urothelial cancer. That shouldn't be compared to Seattle Genetics' 71% response rate for EV since these are late-stage patients who should be harder to treat. Unfortunately for Immunomedics, Seattle Genetics' late-stage patient data, currently under review by the FDA, showed 44% of patients responded to EV.
Immunomedics also announced a delay in plans to resubmit its application for SG as a treatment for breast cancer that was rejected earlier this year. Instead of resubmitting the application early in the fourth quarter, Immunomedics now plans to file in late November or early December. A couple of months' delay shouldn't be that big a deal -- especially if it ultimately increases the likelihood of approval -- but short-minded investors might have been selling on the news.
Known knowns and known unknowns
G1 Therapeutics disclosed in June that its phase 2 trial of trilaciclib helped patients with metastatic triple-negative breast cancer live longer. The data presented at ESMO put some numbers to the results, showing trilaciclib plus chemotherapy helped patients live a median of 20.1 months compared to 12.6 months for patients taking chemotherapy alone.
Maybe investors were expecting a larger difference, but more likely, the report ended up being a sell-the-news event, especially when combined with a second clinical trial presentation at ESMO for one of G1's other pipeline drugs that was rather disappointing.
An early-stage study of G1T48 in a different type of breast cancer showed only 1 of the 19 evaluable patients experienced a partial response. Granted, these are late-stage patients who have failed multiple treatments, but a 5.3% response rate is still rather poor.
Mirati Therapeutics didn't present any significant data at ESMO this year for its KRAS inhibitor MRTX849, but its shares fell because its competitor Amgen (NASDAQ:AMGN) presented miserable data for its competing KRAS inhibitor AMG 510. In an early-stage clinical trial, only 1 of the 12 colon cancer patients treated with the highest dose had a partial response to AMG 510.
MRTX849 might be different enough to work, but the disappointment in colon cancer is likely a class effect, since Amgen has shown AMG 510 works well in lung cancer, where 54% of patients responded.
When investing in biotechs, it's usually better to jump in late after seeing good data than to try to catch the bottom after disappointing news, making Seattle Genetics the clear winner of the group.
If you're dead set on investing in something on sale, the move in G1 Therapeutics looks overdone. But with a market cap that's still more than $850 million and no drugs on the market, it's hard to argue that G1 is a great value, even after the post-ESMO fall.