October 24, 2018

Esmo 2018 – Adaptimmune gets the wooden spoon

The company emerges as the worst-performing stock after Europe’s most important cancer conference, which claims numerous other victims.

As the oncology-focused biotech industry bade farewell to Munich and this year’s Esmo conference it left considerably poorer than when it arrived. The stock market losers over the weekend far outnumbered the winners.

And the outstanding performer of the Esmo-relevant stocks, Innate Pharma, cannot even chalk its success up to its presentation at the conference, promising though this was, but rather to yesterday’s deal with Astrazeneca. Meanwhile, limping away from the meeting carrying heavy losses are such former stars as Aduro, Clovis, Tesaro and, by far the most heavily punished company, Adaptimmune.

This analysis compares the share prices of companies at market close last Thursday, a day before the most important Esmo abstracts were unveiled, and close of play yesterday, formally Esmo’s last day. During this period Adaptimmune lost over a third of its valuation as investors digested the fact that its T-cell receptor therapeutics against Mage A4 and A10 elicited zero efficacy, with considerable toxicity.

This lack of a therapeutic window casts a long shadow over the group’s entire technology, which has proceeded slowly through development and has suffered clinical holds. Just as well – for Adaptimmune, if not for investors – that the company managed to close a $100m equity raise a month ago.

Then there were stocks that presented decent enough results at Esmo, but were crushed by developments from peers or competitors. Aduro did not even have an Esmo abstract, but crashed 33% on fears that its Sting pathway activators might be useless after a similarly acting agent from Merck & Co showed no monotherapy activity.

Selected Esmo 2018 fallers*
  Market cap ($m) Share price chg Vantage story
Adaptimmune 663 -35%  
Clovis Oncology 1,059 -33% Encouraging early prostate data fail to lift Clovis
Aduro Biotech 346 -33% Merck & Co fails to Sting
Kura Oncology 423 -28%  
Nektar 6,813 -20% Lilly and Roche confirm their place in the cytokine race 
Immunogen 934 -20%  
Pharmamar 242 -18% Lynparza delivers a huge result in first-line ovarian cancer
Tesaro 1,975 -16% Lynparza delivers a huge result in first-line ovarian cancer
Jounce 164 -14% Loxo sees off Roche 
Noxxon Pharma 8 -13%  
Bristol-Myers Squibb 82,655 -10% Merck & Co’s head (and neck) scratcher
Exelixis 4,417 -10% Front-line kidney showdown now features four players
Halozyme 2,277 -10%  
Aveo Oncology 276 -10%  
Mirati 1,216 -10% Accelerated approval looks more doubtful for Mirati
Cytomx 670 -9%  
Oncolytics 52 -7%  
Loxo Oncology 4,862 -5% Loxo sees off Roche 
Epizyme 656 -4% Epizyme keeps the tazemetostat flame burning
Note: *closing prices on 23 Oct vs 18 Oct.

Perhaps the most impressive Esmo dataset, Astrazeneca’s Solo-1 trial of Lynparza, took its toll on other ovarian cancer players. This is evident in the collapses of Clovis, Tesaro and Pharmamar, the last of which compounded the problems with a presentation of its failed Corail study.

This highlights another strange fact about the meeting: Solo-1 was one of the few big, late-breaking studies highlighted at Esmo that actually met with unequivocal acclaim. The highly touted positive trials of Tecentriq in triple-negative breast cancer, Impassion-130, and of Keytruda in head and neck cancer, Keynote-048, seemed to fall short of expectations.

Roche at least reined in enthusiasm sufficiently in the days running up to Esmo to limit the damage. And it presented data on entrectinib in NTRK-positive patients suggesting that its purchase of Ignyta was not disastrous; these in no way beat Loxo’s larotrectinib, but the latter company fell nevertheless.

Among other small-molecule players, Mirati’s sitravatinib disappointed, perhaps raising additional doubts about the potential of combining novel agents with immuno-oncology, a common theme of the meeting.

Selected Esmo 2018 risers*
  Market cap ($m) Share price chg Vantage story
Innate Pharma 443 37% Astrazeneca asset swap kickstarts Innate's independence
Dynavax 832 17%  
Jiangsu Hengrui 33,076 9% Without overwhelming efficacy the me-too PD-1 chase is futile
Ionis 6,704 5%  
Novartis 224,480 2% In breast cancer Novartis hopes to succeed where Roche failed
Roche 210,992 2% Roche misses the bullseye in triple-negative breast cancer
Astrazeneca 100,304 2% Lynparza delivers a huge result in first-line ovarian cancer
Incyte 13,826 1% Bile duct cancer doctors herald the age of targeted therapy
Note: *closing prices on 23 Oct vs 18 Oct.

No such doubts applied to Dynavax, however, which put on 17% after reporting response data from a melanoma trial of SD-101 combined with Keytruda. Novartis made the most of results from the Netter study of Lutathera, presumably in an effort to justify last week’s $2.1bn takeover of Endocyte, owner of another lutetium-labelled therapeutic.

Another broadly positive trial, Pfizer/Merck KGaA’s Javelin Renal 101 study of Bavencio and Inlyta in first-line kidney cancer, hit Exelixis, which sells a competing drug, Cabometyx. The role of Bristol-Myers Squibb’s Opdivo plus Yervoy in this setting must now also be in doubt, though the group’s 10% crash, $9bn of market cap, was down to Friday’s US delay in first-line lung cancer.

The Bristol collapse aside, Esmo turned out to be another oncology conference where big pharma outmanoeuvred biotech.