Event – ChemGenex’s Omapro awaiting panel scrutiny

ChemGenex Pharmaceuticals’ Omapro, a potential new leukaemia treatment, will be assessed by the FDA’s oncology panel on February 10, and hopes are high for a positive review from the committee of experts.

The drug is a first-in-class cetaxine with a novel mechanism of action and has shown encouraging efficacy in a very sick and specific patient population who have failed on other therapies, and for whom there are no further treatment options. Combined with a manageable side effect profile, this bodes well both for the panel review and regulatory approvals, which could be granted in March in the US and not much later in Europe. Success would be transformative for the small Australian drug developer, and as such the panel’s opinion is a pivotal event.

Product Name Omapro
Company ChemGenex Pharmaceuticals
Mkt Cap $250m (as of 14 Jan 10)
% of Mkt Cap -
Event Summary FDA AdCom
Expected Decision February 10, 2010
Could also impact N/A

Drug resistant

Approval is being sought in a defined patient population, adults with chronic myeloid leukaemia (CML) who have failed prior therapy with Gleevec and developed the Bcr-Abl T315I mutation. This makes the cancer cells highly drug resistant.

Tyrosine kinase inhibitors (TKIs) are mainly used to treat leukaemia; Gleevec first line and Sprycel and Tasigna second line. At the moment, doctors are out of options for patients who fail on these therapies and are found to have this mutation.

ChemGenex believes that because of Omapro’s different mechanism of action, it can have a therapeutic benefit in these patients. The compound works by inhibiting protein translation of short-lived oncoproteins that are upregulated in leukaemic cells.

Pivotal studies demonstrated the compound’s ability to clear the disease from the blood in 85% of chronic phase patients and from the bone marrow in 15% of chronic phase patients who do not benefit from the current treatment.

High hopes

Regulators will be assessing whether this level of efficacy is sufficient to past muster in this patient group; considering lack of other options there is a good chance they will believe so.

Investors are clearly optimistic; the company’s Australia-listed shares more than doubled in value last year making it one of the best performing small drug companies; the stock is currently trading close to A$1, giving a market cap of A$272m ($251m) (Clinical surprises drive small cap risers, January 7, 2010).

Hospira is obviously also impressed, last month the group bought rights to the drug in Europe, Middle East and Africa. The deal brought A$17.8m upfront with the potential for up to A$119m in milestones, plus royalties.

The intial fee means ChemGenex has around A$30m in the bank, enough to get the ball rolling on commercialisation in the US, where it plans to undertake the marketing itself.

Approval in Europe would almost definitely trigger a milestone payment from Hospira, and this could come around mid year; as such the company might not need to ask shareholders for any further funds. Also, Hospira will be collaborating on trials of the drug in other haematological malignancies, but it has not yet bought any rights beyond CML, therefore this represents another potential source of income for the future.

Growing potential

Of course, this first indication is not going to be huge; analysts at RBS Morgans have estimated that around 2,000 people in the US and Europe will fail on TKIs due to this mutation. However, with trials underway in wider patient populations, including patients demonstrating resistance without the mutation, and in combination with other drugs, its target market could grow.

With a price in the region of $50,000 a year quite possible, maybe even double that, RBS believes, this initial patient population would mean revenues of $100m a year. For a company of ChemGenex’s size, this is not insignificant.

The drug’s progress through the regulatory process in the US so far has been swift; it was filed in September, accepted in November and granted priority review, and then this panel was announced in December. The six month review would mean a PDUFA date of around 8 March, so ChemGenex is no doubt hoping the FDA keeps the pace up.

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