Clovis Stabilizes After Big ASCO-Related Crash Print E-mail
By Brian Wilson - Lead Contributor   
Thursday, 05 June 2014 09:26
Since Friday of last week, Clovis Oncology (CLVS) is down over 25% on newly discovered safety concerns that threaten the competitive edge of its flagship drug CO-1686 against AstraZeneca's AZD9291.
The sentiment towards Clovis after this year's American Society of Clinical Oncology meeting is the complete opposite of what it was last year. As biotech investors may remember, CLVS jumped from $36.58 per share to $71.83 per share after ASCO 2013 on the phenomenal Phase I data.

But ever since the company revealed that 3 (or more) patients were taking insulin to manage their hyperglycemia side effects in the CO-1686 Phase II, the market become very frightened. After all - who wants a lung cancer drug that causes diabetes? Would the FDA approve something so "dangerous"?

Many Wall Street analysts did not want to take the risk of supporting this stock any more than they had to, so we've recently seen a number of downgrades that further hurt confidence in CO-1686.

Although it CO-1686 does seem more dangerous than it was before, the link between various cancer treatments and hyperglycemia is already well established. Chemotherapy is also associated with hyperglycemia too, yet it is used frequently in patients with all types of cancer.

The 5-year survival rate of the typical lung cancer patient is just 16.6% according to the latest NIH statistics. While the high rates of patient hyperglycemia may become a central topic of discussion with the FDA, we believe that the viability of CO-1686 is still supported by excellent tumor response rates in a high unmet need lung cancer patient population. "Approvability" probably isn't the issue anymore- it's the threat posed by AstraZeneca's AZD9291.

Notes on CO-1686

CO-1686 is a Phase II drug being developed for non-small cell lung cancer - the most common form of cancer of the lungs. About 158,000 people die each year, and roughly 400,000 patients are living with the disease. Because of the large number of patients with the disease, the lung cancer drug market is very large - estimated to by ~$5 B in revenues per year.

In Phase I trials, CO-1686 showed its ability to shrink lung cancer tumors while avoiding any signs of serious liver toxicity. Because the drug is an irreversable inhibitor of a surface protein known as EGFR, the lack of toxicity is a truly impressive feat. But what made the drug especially interesting was its ability to positively effect patients with a mutation called T790M. This is a mutation that disables to viability of other EGFR inhibitors like Tarceva.

AstraZeneca's AZD9291 has a very similar mechanism that also has a positive effect on patients with T790M, and it may not have such a strong correlation with hyperglycemia.

But since the efficacy data are lacking for both drugs, it's going to be very hard to say which one is truly "better" at treating lung cancer. Because patient survival is the ultimate goal, the key to winning this war is superior efficacy. When it comes to treating the deadliest forms of cancer, improvements in overall survival are much more important.

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