Jittery markets punish Exelixis for missing moonshot

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Had Exelixis managed to announce last week that the closely watched Comet-1 trial would continue to the final analysis, it would probably have escaped more lightly. But the post-Gilead/Waxman reality is upon us, and the markets are jittery.

Shares in the company plunged 35% this morning, wiping $450m from its market value, as investors who had been betting that the study would be stopped early on strong signs of efficacy realised they had lost their wager. Ultimate success can by no means be ruled out, but then again neither can failure; the lack of a futility analysis means the trial can still flop. With the prostate cancer space highly competitive, removing the best-case scenario is undeniably a disappointment for Exelixis.

Moonshot

The Comet-1 trial tested Cometriq in 960 men with castration-resistant prostate cancer who had already been treated with chemotherapy and either Johnson & Johnson’s Zytiga or Medivation’s Xtandi. The event-driven study has overall survival as the primary endpoint, and is 90% powered to detect a 25% reduction in the risk of death at the time of the final analysis, which requires 578 events.

The design included a single interim analysis to assess whether a significant improvement in survival could be detected much earlier, after just 387 events. The answer to that question is no – last night, Exelixis said independent reviewers had recommended that the trial proceed to its final analysis. It expects this to happen this year.

Although many considered this interim analysis to be a moonshot, there were clearly plenty of investors willing to take the chance. Shares in the company climbed in anticipation of the readout – the stock touched a two-and-a-half year high of $8.24 in January – and today’s plunge to $4.18 reflects the collapse of the bull case.

Meanwhile the bear case, that the trial will fail completely, cannot be ruled out as the reviewers were not asked to decide on the futility of Comet-1. Today’s share price fall no doubt reflects mounting concerns that this might eventually happen.

Analysts at Leerink – never shy to talk up the upside – said today that they remained cautious of the final data and estimated only a 50% probability of success. Although they believe that the project is active in prostate cancer – phase II data revealed significant impacts on bone scan activity and pain palliation – there is a risk that this does not translate into a survival benefit, they wrote.

Add to this a very sick and hard-to-treat patient population, and it is clear that Comet-1 was always going to be a rigorous test of Cometriq’s potential.

Wider space

However, it is impossible to view Cometriq without a look at the wider prostate cancer space. The drug, which has so far only managed to win approval in the tiny indication of medullary thyroid cancer, is approaching the market in the wake of some very impressive novel compounds.

Xtandi, Zytiga and Bayer’s Xofigo were all sufficiently effective for their respective pivotal studies, also conducted in castration-resistant prostate cancer, to be stopped early. And with Cometriq Exelixis is attempting to establish for the first time that kinase inhibition has a place in this disease; Pfizer’s blockbuster Sutent failed in this indication.

Add to this the loss of two big pharma partners – in the past six years GlaxoSmithKline and then Bristol-Myers Squibb returned rights to the compound – and it is perhaps surprising that Exelixis ever managed to rebuild any confidence in Cometriq.

The final Comet-1 readout later this year and top-line data from the Comet-2 study, which has pain palliation as the primary endpoint, will determine whether Exelixis and Cometriq have another chance of resurrection.

To contact the writer of this story email Amy Brown in London at AmyB@epvantage.com or follow @AmyEPVantage on Twitter

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