Sillajen and Transgene bid to revive the oncolytic virus craze

The industry’s most advanced oncolytic virus project, Pexa-Vec, faces a make-or-break pivotal study readout.

While deal-making has maintained some investors’ interest in oncolytic viruses, clinical data backing such enthusiasm have been woefully lacking. This might change, as a pivotal trial of the most advanced development-stage oncolytic virus, Sillajen/Transgene’s Pexa-Vec, faces a futility analysis during the current quarter.

Failure here would set the sector back considerably, and unfortunately for bulls there are several reasons to expect a negative result. Pexa-Vec has earlier failed to generate convincing results, there have been rumours that the study is going badly, and to cap it all the two partners are in dispute.

All the while, however, investors in Sillajen have shown remarkable resilience. The South Korean company’s stock has risen more than fivefold in the past two years, and its market cap today stands at over $4bn. Pexa-Vec is by far its most advanced asset.

Phocus on first line

The project’s pivotal open-label study, Phocus, tests it in 600 first-line liver cancer subjects. Half have been assigned to Pexa-Vec plus the standard of care, Bayer’s Nexavar, and the rest to a Nexavar-only control cohort.

There is a sole primary endpoint, overall survival, which in Nexavar-treated subjects amounts to a median 10.7 months, according to the drug’s US label. Sillajen and Transgene bulls will point to a small phase II liver cancer trial in which the higher of two Pexa-Vec doses (and the one being used in Phocus) yielded median overall survival of 14.1 months.

However, this was a study in just 30 subjects, and it is impossible to tell how their baseline characteristics compared with those enrolled into Phocus. Moreover, the standard of care is changing, with Eisai/Merck & Co’s Lenvima securing a first-line label last year.

Tellingly, Lenvima’s pivotal study showed median overall survival of 13.6 months, versus 12.3 months for Nexavar, and both are likely a better representation of the benchmark for Pexa-Vec. Added to this must be the growing importance of checkpoint blockade: Keytruda and Opdivo both carry second-line liver cancer labels.

Pexa-Vec’s phase II test had been run by Jennerex, a San Francisco-based company that had originated Pexa-Vec. Sillajen bought Jennerex, along with Pexa-Vec, for just $100m up front in 2014, having then been the contract manufacturer for the oncolytic virus.

Not only was this acquisition a low-ball buyout, its trigger was the failure of Pexa-Vec in the phase II Traverse study, also in liver cancer, in subjects who had failed Nexavar. Last October Jennerex’s former owners sued Sillajen, alleging failure to make subsequent milestone payments stipulated under the deal.

Transgene’s Pexa-Vec involvement dates back to its deal with Jennerex, and the French group is also in dispute with Sillajen. Transgene’s most recent financial report reveals that mediation is ongoing to extract from Sillajen a €1.0m ($1.1m) milestone payment, also relating to the Jennerex takeout.

And, to underline Pexa-Vec’s precariousness, rumours surfaced in the local press last month that Phocus was not going well and questioning its design – though Sillajen was quick to refute these claims.

Selected trials of Pexa-Vec in liver cancer
Study Setting Design Notes
Phocus (NCT02562755) 1st-line +Nexavar vs Nexavar Phase III; futility analysis Q2 2019; interim data 2020
NCT03071094 1st-line +Opdivo (single-arm) Safety review had been expected in 2018; interim data delayed from mid-2019 to H2 2019
Traverse (NCT01387555) 2nd-line (post-Nexavar) Monotherapy vs best supportive care Study failed
NCT00554372 Unspecified Monotherapy (2 dose levels) mOS 6.7mth for low dose, 14.1mth for high dose

Overall, however, the biggest red flag is the paucity of clinical backing for a decision to go into phase III; beyond the occasional patient remission Pexa-Vec has not exactly bothered the scorers.

And that would be entirely in keeping with the rest of the oncolytic virus field. The only such product approved in the West, Amgen’s Imlygic, was greenlit on the back of extremely shaky data, and has been a market flop. A recent deal flurry notwithstanding, clinical backing for oncolytic viruses is conspicuous by its absence.

True, futility analyses usually set a high bar for discontinuation, and Pexa-Vec could perhaps avoid such a worst-case scenario even though, ultimately, it might fail in Phocus’s efficacy analysis next year. The problem for Sillajen investors is how much the company’s valuation already prices in.

Transgene, capitalised at a mere €180m and boasting a separate, in-house oncolytic virus, TG6002, might be able to shrug off a Pexa-Vec failure. For Sillajen such an outcome would be disastrous.

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