Onconova stock has continued to reward investors, with ONTX up by over 20% since CNA first covered the stock on November 3rd. Average volume (liquidity) has also increased rather substantially, with an average trading volume uptick to over 100K shares per day, up from approximately 55K shares on a historical basis.
ONTX is a phase 3 clinical-stage biopharmaceutical company that is focused on discovering and developing novel products to treat cancer. The company’s clinical and pre-clinical stage drug development candidates are designed to work against specific cellular pathways that are important in cancer cells while causing minimal damage to normal cells. Onconova’s most advanced product candidate, Rigosertib, is a small molecule inhibitor of cellular signaling and acts as an RAS mimetic.
As well as announcing earnings on November 14th, ONTX provided an encouraging update for both its INSPIRE and Oral Rigosertib trials.
ONTX Trials – Oral Rigosertib
Investors remain focused on two key initiatives at ONTX, the Oral Rigosertib and INSPIRE trial, with ONTX providing progress updates for each.
Specific to the Oral Rigosertib trial, 54 patients were evaluated in the phase II trial 09-08 of Oral Rigosertib plus azacitidine, culminating in an end of phase II meeting with the FDA during which updated trial results were presented. The intent of the meeting centered around designing a phase III clinical trial to compare the combination of Oral Rigosertib plus azacitidine to a controlled study using azacitidine plus a placebo.
The intravenous (IV) form of Rigosertib has been employed in phase I, II, and III clinical trials involving more than 800 patients and is currently being evaluated in the randomized phase III global INSPIRE trial as a second-line treatment for patients with higher-risk MDS after failure of hypomethylating agent therapy. This formulation is suited for patients with advanced disease, provides a long duration of exposure, and ensures adequate dosing in a controlled setting.
ONTX’s goal is to focus on treating a sizable portion of the MDS population, targeting patients that have not been previously treated with HMA’s (a poorly met medical need), and to replace existing front-line treatments that are only effective for a small fraction of patients.
The primary endpoint for the phase III pivotal trial will employ Response Rate as the approval endpoint, a departure from the Overall Survival endpoint in the INSPIRE trial. The Response Rate endpoint will allow for a more rapid trial completion and end of study evaluation. The measurement will be a composite of complete remission and partial remission.
The INSPIRE trial is by far the larger of the two, with the trial recruiting and treating patients on four continents in more than 150 participating trial sites in 15 countries.
ONTX continues to make significant trial progress and reached additional milestones, most recently in the development of Rigosertib for patients with myelo dysplastic syndromes. In July, Symbio Pharmaceuticals, a partner in the trial, announced the enrollment of the first patient in Japan for Rigosertib in 2nd line, higher risk MDS patients.
The phase III (intravenous) INSPIRE trial is designed based on guidance received from the FDA and EMA and is derived from findings within the ONTIME Phase 3 trial. INSPIRE is a multi-center, randomized controlled study to assess the efficacy and safety of IV Rigosertib in HR-MDS patients who had either progressed on, failed to respond to, or relapsed after previous treatment with an HMA within the first nine months of initiation of HMA treatment. This time frame optimizes the opportunity to respond to treatment with an HMA prior to declaring treatment failure, as per NCCN Guidelines. The trial will enroll approximately 225 patients randomized at a 2:1 ratio into two treatment arms: IV Rigosertib plus Best Supportive Care versus Physician’s Choice plus Best Supportive Care. The primary endpoint of INSPIRE is overall survival, and an interim analysis is anticipated.
INSPIRE is a global phase III trial with enrollment continuing throughout the United States, Asia, Europe, Australia, and Japan. As of October 3rd, 157 sites were open for recruitment to advance the INSPIRE trial.
Additionally, the trial data was recently reviewed in a planned meeting with the Drug Safety Monitoring Board, who recommended that the trial continue without any modification.
The promise of each of the Rigosertib trials is bolstered by two peer-reviewed publications that describe the clinical and non-clinical studies suggesting the benefits of Rigosertib in MDS.
Financial Position and Upcoming Catalysts For ONTX
From a financial perspective, ONTX has continued to sport a healthy cash balance, which was in excess of $25 million dollars at the end of the third quarter. Net revenue was stable at $1.7 million dollars for the period, a slight increase from the comparable period in 2015.
Research and development costs trended lower by $1.3 million dollars from the comparable period in 2015, and general and administrative costs also were trimmed lower by over $200K dollars.
The third quarter results represented an earnings beat measured against analyst consensus, and Maxim Group has maintained its Buy rating on ONTX, offering a twelve-month price target of $6.00 a share.
ONTX is planning to release updated data from the 09-08 combination therapy trial in December of 2016, including data that supports safety and tolerability in more than 500 patients. Onconova management has guided that they will include additional analysis of previously completed, randomized clinical trial data of Rigosertib at that same annual shareholders’ meeting.
Prior to the ASM, ONTX will be presenting at the American Society of Hematology on December 3-6, 2016.
With ONTX continuing to perform and execute on its strategic milestones, investors remain cautiously optimistic for the future. With the stock trading well south of its 52-week high of $18.90 a share, ONTX is capable of continuing its trend higher as additional and consistently communicated milestones are announced. With the company financially sound for the near term, and with a compelling data set that offers an optimistic view for future results, ONTX offers investors a speculative play for a treatment looking to address an unmet medical need.
While the broader market is clearly disguising the general weakness of many small- and mid-cap biotech names, investors should remain cautious going into year end with any stock that may be susceptible to year-end tax selling or portfolio re-balancing.
I liked ONTX at $2.41 a share, and I still like it at these levels for investors that can absorb some volatility. Be cognizant of pending data at the end of the month, and monitor the progress of the trials on a regular basis.
ONTX will be catalyst driven, and the hint of news – either good or bad – can change the momentum of the stock in an instant. If, however, ONTX continues to deliver similar results to what has already been published, the trend may very well be a friend.
[Image Courtesy of Flickr]