Bluebird Bio (NASDAQ:BLUE)
On October 19, 2015 shares of Bluebird Bio fell approximately 4% after the company announced that one patient on its old generation gene therapy had required two blood transfusions due to anemia. One thing to keep in mind was that this patient was blood transfusion free for 7 years and that’s why the share price took a minor hit that day. In addition this one patient was treated seven years ago with Bluebird’s old generation therapy known as HPV569.
We believe that investors overreacted to this news because the HPV569 was Bluebird’s first-generation therapy, and that should have no bearing whatsoever on its next generation gene therapy platform. The company’s next generation gene therapy product is known as BB305 and it substantially increases hemoglobin production at a greater rate than the first-generation product. Right now investors can speculate on whether this new gene therapy product BB305 will continue to make hemoglobins in patients that are treated for the next seven years, but for now we know that it works.
As mentioned above that one day drop was a knee-jerk reaction without investors fully realizing the scope of the news. Once investors have time to digest this news, and then consider all positive previous results Bluebird Bio has show the share price should start an upward trajectory once more.
Synta Pharmaceuticals (NASDAQ:SNTA)
On October 20, 2015 shares of Synta took a dive of 64% after the company said that it would completely stop the Phase 3 lung cancer trial that it was currently running. The phase 3 trial entails Synta’s drug ganatespib in combination with docetaxel against docetaxel alone. These patients were being treated for second-line treatment of advanced non-small cell lung cancer — NSCLC. This phase 3 trial was known as the GALAXY-2 trial, and now the company has chosen to terminate the trial completely.
The reason for the trial being terminated was that an independent board known as the Independent Data Monitoring Committee — IDMC — concluded that even if the trial was seen to completion the combo therapy of ganatespib in combination with Docetaxel would not be superior to Docetaxel alone. That means that the study would not meet on the primary endpoint of Overall Survival — OS — even if the study was completed all the way.
The good news that came from this phase 3 trial was that ganatespib was safe and well tolerated in all patients, but the drug failed to produce the necessary effects to be statistically significant compared to Docetaxel alone. While this was a major setback for Synta the company is still going to test its ganatespib drug against other cancer indications. In addition Synta has another platform to use as a backup in its pipeline known as the HDC platform which is still in pre-clinical stages of testing. Although this program is early in nature and it could be many years before investors see any progress with respect to this platform.
Merrimack Pharmaceuticals (NASDAQ:MACK)
On October 23, 2015 Merrimack announced that is had received FDA approval for its pancreatic cancer drug known as ONIVYDE. What is so special about ONIVYDE? Well ONIVYDE treats an advanced form of pancreatic cancer in patients who have already failed with gemcitabine drug therapy. Gemcitabine is a chemotherapeutic drug that is used as first line treatment for pancreatic cancer.
A lot of the patients that end up taking gemcitabine though never see improvement of their cancer, that means gemcitabine fails to produce any type of efficacy whatsoever. This is where ONIVYDE comes in because it showed in a phase 3 trial that it could achieve efficacy in these patients who first failed gemcitabine drug therapy. One key thing to note though is that ONIVYDE is not a single therapy drug. That is because Merrimack combines it with two other drugs known as F-5U and leucovorin to give that extra boost in efficacy.
Merrimack is not selling this drug alone, because it has already established a commercialization partner Baxalta (NYSE:BXLT) . Baxalta will be responsible for commercialization of ONIVYDE in Taiwan and outside the United States. Baxalta has already submitted a marketing authorization application — MAA — for ONIVYDE, and possible European approval of this drug is expected by the 4th quarter of 2015. This provides for another catalyst for shares of Merrimack and continues to show that the company is on the right track in creating shareholder value.
The only minor problem is that the FDA approval of ONIVYDE carries a black box label warning because the drug combination caused diarrhea and low white blood cell count in patients. While this is not a great thing, we must accept the fact that pancreatic cancer patients typically only live within one year after being diagnosed. They are already in dire need of some type of therapy, especially one that even works. That’s why we believe this black box label warning should not hinder the sales of the drug which could potentially produce peak sales in the U.S. and Europe of $1.5 billion annually.
[Image Courtesy of GEN]