Asco Interview - Seattle lays out billion dollar ambitions

Interviews

In the wake of one of the most notable presentations at this year’s Asco Roche’s new breast cancer treatment T-DM1 looks to be on its way to the market, progress that should help put antibody-drug conjugates firmly on the map after many years of promise but little tangible delivery. The drug’s predicted commercial success should also reflect well on others developing these so-called “smart bombs”.

Seattle Genetics is one of the most advanced companies working in the field with one ADC, Adcetris, already on the market for Hodgkin’s lymphoma and anaplastic large cell lymphoma (Adcetris wins broad approval and high price but caution justified, August 22, 2011). Speaking to EP Vantage at this year’s Asco Clay Siegal, chief executive, says he is not about to let the group’s lead slip and has ambitious plans to not only expand the uses of Adcetris, but to move out of haematological cancers into the wider solid tumour market.

Beefing up the stock

Delivering on that strategy should answer some of the group’s critics who have complained about the speed of development at Seattle, something that Mr Siegal sees as an unnecessary distraction. “Great companies are not built by looking at the next quarter,” he says.

He dismisses the group’s naysayers as a vocal minority, who do not reflect the majority of shareholders, saying: “The chatter on Wall Street that you are ‘too slow’ at this or that is a small percentage of the Street, who are largely residing in the hedge funds.”

Shares in the group have been on rollercoaster ride since Adcetris won approval last August, rocketing between $13 just after approval and climbing to $22 in November. Concerns about the limited sales potential in its current indication and the company's ability to broaden Adcetris' use are often cited when explaining the share's volatility.

Clinical rebuttal

This week the group looked as it had started to deliver on its expansion promises. Shares in Seattle have advanced 11% to $21.33 so far this week in the wake of an Asco presentation of very early stage data for ASG-5ME, an ADC being developed in collaboration with Astellas’ antibody unit Agensys.

Although largely inconclusive of any real benefit at this point the results did show that the drug was relatively well tolerated in 26 metastatic castrate resistant prostate cancer patients. Importantly, ASG-5ME showed reductions in baseline prostate-specific antigens in several patients, providing what could be evidence of an anti-tumour effect.

The phase I study is continuing to recruit both pre and post chemo patients, while a phase I study in the notoriously hard to treat pancreatic cancer recently competed enrolment; there also plans for evaluating it in gastric cancers.

New directions

Unlike Adcetris, which targets the CD30 protein on the surface of cancer cells, ASG-5ME is made up of an antibody that targets SLC44A4, a solute carrier antigen family member overexpressed in epithelial cancers and found in more than 80% tissue samples of prostate, pancreatic and gastric cancers. Although it uses a different antibody, ASG-5ME uses the same toxic payload, auristatin E.

Seattle also has other drugs in the pipeline using antibodies targeting CD70 and CD19, although they are all still at earlier stages.

The fact that the majority of the new products are in solid tumours should also help move the group away from its current focus on relatively rare haematological cancers. Hodgkin’s only makes up about 1% of all cancers.

Create once, use many

However broadening the range of applications for Adcetris was what this Asco was largely about for Seattle. A variety of data was presented for Adcetris including trials in non-Hodgkin’s lymphoma (NHL) and the implications for retreatment in its approved uses, HL and ALCL. Results of screening a wide variety of solid tumours for CD30 expression were also released.

The drug scored some impressive numbers in all the trials and in particular re-treatment. In 23 patients who had relapsed after use of Adcetris in HL and ALCL, there was a 70% response rate, with objective responses, which included both complete and partial responses, in 88% of ALCL patients and 60% of HL patients. Particularly of interest were four patients who had partial responses during their first treatment regimen, but who showed complete responses on retreatment; the rate this happens as the trial is expanded will be watched with interest.

Seattle is trying to mirror the regulatory pathway of Genetech’s Rituxan, which was initially approved for one treatment cycle in follicular B-cell NHL and then received a label revision allowing multiple uses. The apparent strong efficacy for Adcetris in retreatment has led Seattle to think about stepping up its plans to seek a label change.

“I would be disappointed if we weren’t able to work with regulators and get something on the books before the end of 2013,” says Mr Siegal.

A green light for retreatment would be a useful win for Seattle, in terms of confidence in the agent and for financial reasons, and go towards fulfilling the potential Mr Siegal believes Adcetris holds. “I believe that this could be a $1bn drug,” he says.

Thinking even bigger

Getting to that magic number will ultimately depend on succeeding in much larger patient populations. As such the initial efficacy Adcetris showed in the much bigger patient population of NHL is encouraging. Of 14 evaluable patients in a 28 person trial in refractory CD30+ NHL, 36% of patients showed an objective response, with even better efficacy in a subset of patients.

Until it is clear how many NHL sufferers are CD30+ it is hard to evaluate what this means for sales, Jason Kantor, an analyst at RBC Capital Markets, wrote in a research note this week. A figure as low as 20% would make it “a significant market opportunity,” he believes.

Meanwhile, in its search for opportunities for Adcetris in solid tumours, Seattle screened 1,637 patients to see if CD30 was expressed in a variety non-lymphoma tumour types. The results threw up expression on 5% of ovarian cancers, 5.6% in triple-negative, or non-HER2, breast cancer, 9.4% of melanomas and 28% of mesotheliomas.

Seattle will now be focusing on some of these cancers, Mr Siegal says.

Despite these efforts analysts have yet to agree with Mr Siegal's predictions for Adcetris' potential. By 2018 combined sales - Takeda has rights outside the US and Canada - are forecast to hit $507m, consensus data from EvaluatePharma show, with Seattle booking $388m of that.

Those line extensions need to be won to hit Mr Siegal’s ambitious revenue hopes. Another easy, albeit small, win would be European approval of the drug in HL and ALCL, with a decision due the end of the year.

Takeover talk

The last few years has seen interest in ADCs mounting at both small and large companies alike. Roche alone has 25 ADCs in the pipeline, nine of which use Seattle’s technology, and recently Celtic Pharma committed $50m to an ADC start-up (Celtic invests $50m in antibody-drug conjugate start up, March 26, 2012).

With further successes in the space and label expansion for Adcetris, it might not be long before someone comes knocking at Mr Siegal’s door. With a market cap of about $2.2bn Seattle is not cheap, but it has a pipeline of drugs in a hot area of oncology, the ability to pump out antibodies and, importantly, validated stable linker technology. Few companies, with the exception of ImmunoGen, can make such a claim.

In terms of snapping Seattle up the most obvious candidates would either be Roche or Astellas, which through Agensys deal holds joint rights to ASG-5ME and ASG-22ME. But like the negative whisperings of some on Wall Street, Mr Siegal has little truck with takeover talk.

“I don’t wake up every morning and think about being a target or worry about being acquired. Categorically Seattle Genetics is not looking to get acquired. There is still a lot of room for us to grow. We have a great trajectory and we don’t believe it is in the shareholder’s best interest at this point,” he says.

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