It may take some time to unlock Astex’s pipeline value Print
By Brian Wilson, Contributor   
Wednesday, 06 June 2012 07:26
icon_closerlookAstex Pharmaceuticals (ASTX) is a pharmaceutical company that is in the process of developing a plethora of clinical-stage oncology drugs. Astex has successfully released the drug Dacogen (decitabine) for the treatment of myelodysplastic syndromes (MDS), and now receives substantial royalty revenues from its marketing contract with Eisai (ESALF.PK).  Astex and Eisai are now attempting to gain approval for Dacogen to treat actute myeloid leukemia (AML) in elderly patients.

On February 9th, it was announced that ODAC (The FDA’s Oncologic Drugs Advisory Committee) voted 10 to 3 against approval of Dacogen for AML, because the clinical trials “failed to demonstrate benefit on statistical interpretation”. In my last report on Astex, I mentioned that the ODAC meeting and the NDA decision were going to have a major impact on the stock. They sure did – from February 6th (the last trading day before the 10-3 vote became available) and March 6th (the PDUFA action date, where the FDA unsurprisingly rejected Dacogen for the treatment of AML), the stock dropped about 35%. It appears that patients aren’t expecting too much out of Dacogen at this point, as attention shifts to the rest of its pipeline.

As mentioned by M. E. Garza in his relatively recent report on Astex, the company has been pressing the value of its other assets.

More recently, the pharmaceutical company presented data on their novel, first-in-class, direct acting antiviral agent (DAA) against Hepatitis C Virus (HCV) at the 47th Annual Meeting of the European Association for the Study of the Liver (EASL): The International Liver Congress™, April 18 to 22, 2012 in Barcelona, Spain. Although technical, the posters below showcase the strength of Astex’s Pyramid™ technology to deliver promising new pipeline assets and highlight Astex’s move into a new therapeutic area.”  -M. E. Garza

The report then links to poster 19057 and 19064, which demonstrate the power of Astex’s Pyramid™ system in the identification of anti-viral compounds - in this case, the hepatitis C virus. Although Astex’s HCV is still in the preclinical stage, there is potential for a partnership with a larger drug developer for the program.

We are also seeing the promotion of other products in their portfolio, which may draw more investor attention away from Dacogen and into the rest of the pipeline. The HSP90 inhibitor AT13387 has finished phase I studies for the treatment of solid tumors. Data was presented at ASCO (the American Society of Clinical Oncology) 2012, and so far the company has found that the drug-related toxicities were reversible and that the maximum tolerated dose is about 260 mg/m^2.

This, in addition to some phase I data which yielded favorable toxicity results for AT9283 triggered a reversal in the stock’s downtrend. On the Monday following presentation of the data, ASTX steadily moved from $1.66/share to $1.78 – a 7% gain. About 11% of floated shares are being shorted, which represents significant opportunity for the stock to jump high at certain points. Still, it may be some time before the value of Astex’s pipeline is unlocked. There are no immediate catalysts that should send ASTX anywhere near its yearly highs either.

Disclosure: None

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