Presented by OSMOS…

Taxanes have been approved for years to treat epithelial malignancies and are typically part of front-line therapy for numerous cancers, including ovarian, breast, prostate and lung.

The problem with taxanes (paclitaxel, docetaxel, Abraxane), however, are many. Side effects such as peripheral neuropathy and neutropenia plague successful therapy. Additionally, taxanes are substrates for ABCB1 (aka P-glycoprotein [P-gp] or MDR1). Chronic or overexposure to taxanes causes upregulation of ABCB1, which in turn induces MDR and decreases intracellular build-up of the drug. This is in turn, decreases the drug’s effectiveness at eradicating tumor cells and increases resistance. Finally, taxanes have low solubility, making it necessary to administer in high doses and cycle frequencies, both of which also increases the drug’s propensity for resistance.

The race to develop an oral taxane with high bioavailability, low side effects and low or null pgp activation is not new, although filled with setbacks. Bristol-Meyers Squibb has tried with BMS-275183 and Taxolog with Milataxel. In 2008, Genta (GNTA.OB or GNTA) decided to give it a try and licensed an investigational oral taxane derivative, Tesetaxel (Tes), from Daiichi-Sankyo.

Before we begin, let’s first state that we will only review the clinical data and perhaps make brief mention of preclinical results if necessary. This post is not meant to put a financial valuation on GNTA or Tes, but to weigh the evidence of the drug’s effectiveness to-date and make an assessment about the drug’s clinical future/risk. This post is not meant to provide financial advice.

OK, let’s do it…

Recent History

Daiichi conducted several trials with Tes, had some success, but stopped development in 2006 after stating the drug lacked advantages over other chemotherapeutic drugs AND after the FDA put a clinical hold on the drug due to “several fatalities in the setting of severe neutropenia.”

Daiichi spent almost all of 2007 trying to find a partner for Tes and ended up getting a deal done with GNTA in March 2008. GNTA paid $250,000 upfront plus $2.25M evenly spread out over four quarters starting in 2Q08 and ending in 1Q09.

In 2Q08, GNTA filed a response to the FDA requesting a lift of the clinical hold, which was granted on June 23, 2008.

In December 2008, Tes received FDA orphan drug designation for the treatment of advanced melanoma. In January 2009, GNTA announced it had received orphan drug designation for gastric cancer and made an announcement touting positive clinical data (this study was initiated while with Daiichi). Also, in January 2009, the company started a narrow dose ranging study around the established Phase 2 dose. The trial was in various cancers and data is set to be presented this Monday at ASCO.

Finally, in February 2009, GNTA submitted an SPA for advanced gastric cancer. GNTA expects to hear back from the FDA in 2H09.

Now, let’s review the various studies conducted by Daiichi.

Phase 1 Dose-escalation in Solid Tumors

• N=40 with doses from 1.5-40 mg/m2 q 3 weeks (oral, of course)

• Results: Two minor responses (taxane-refractory breast ca. and transitional bladder cell ca.) Stable disease (SD) of >4 months in N=8. MTD defined as =<27 mg/m2 with Grade 3 neutropenia.

Combination Study with Xeloda (capecitabine)

• Dose escalation 18-35 mg/m2 with Xeloda 1250-2500 mg/m2

• N=27 various solids

• Cycle = 3 weeks with Tes on day 1 then Xeloda bid days 1-14

• Results: same MTD for Tes. uPR=1 patient with HCC. Ten patients with SD >12 weeks. Neutropenia severe (Grade 4)

Colorectal Cancer

• Multicenter, 2nd line in refractory irinotecan and oxaliplatin mCRC patients

• N=39, single dose (27-35 mg/m2) q 3 weeks

• Results: 2 CRs, 2 PRs, 14 SD

• Side effects: Grade 3/4 neutropenia in 48%. Neuropathy in N=13, 3 with severe neurotoxicity

Gastric Cancer, Second-line Note: this is the data being used to support filing an SPA and conducting a pivotal registration study.

• N=36 patients who failed 5-FU, non-taxane therapies

• Tes 27-35 mg/m2 q 3 weeks

• cPR=5, SD=15, PD=6

• Severe neutropenia with DLT of 35 mg/m2

We do see some conflicting data here, however. Here’s the data released by GNTA:

…all but 2 patients had received a third chemotherapy drug with this regimen. Final intent-to-treat analysis, including all patients enrolled in the study, showed that 5 patients achieved a partial response, 2 patients achieved a partial response unconfirmed by CT scan, and 14 patients achieved stable disease, for an overall major response rate of 20% and a disease-control rate of 60%. The most serious adverse reaction was Grade 3-4 neutropenia, which occurred in 57% of patients. Six patients failed to complete the first course of treatment. Five patients died on study from differing causes that included intestinal perforation, pneumonia, hepatic failure, hemorrhagic shock, and rapid disease progression. One patient withdrew before receiving the first treatment dose.

NSCLC, Platinum-refractory

• N=36 treated with Tes at 27 mg/m2 q 3 weeks

• CR=1, PR=1, SD=15, PD=8

• Severe grade 3 side effects in 32/36, neutropenia

In Genta’s Hands and Assessment

GNTA has its hands full and no cash, which makes for a scary situation. They also have an outrageous balance sheet (3.3 billion shares outstanding – no that’s not a typo), a checkered history, Genasense as a lead drug and a 1 cent stock price. We could go on forever here, but we’ll stick to the facts on Tes.

All the above puts doubt on the future of an already risky drug in our view. GNTA’s strategy is to secure a “first-to-market” advantage for Tes relative to other oral taxanes. For us, the company’s plan to advance Tes in melanoma, gastric cancer, as well as possibly hormone-refractory prostate cancer (HRPC) and breast cancer is courageous and optimistic and adds to the risk.

GNTA has said:

“Accordingly, we have identified three oncology indications in which we believe tesetaxel may have sufficient efficacy and safety to warrant regulatory approval…As previously noted, the Phase 2a study previously conducted in patients with advanced breast cancer was positive and yielded an overall response rate of 38%.”

Dr. Anthony Tolcher, Director of Clinical Research, South Texas Accelerated Research Therapeutics who has worked with Tes since Phase 1 said:

“Completed Phase 2 studies of tesetaxel in advanced breast, colon and stomach cancer have shown promising activity. We believe the innovative development strategy created for tesetaxel may enable this drug to become the first oral taxane to achieve regulatory approval.”

Daiichi did conduct a trial in breast cancer patients, although that data was never released (or at least it is not publicly available). GNTA’s latest corporate presentation states that in breast cancer there was a 38% response rate in 34 patients – 7 PR, 6 uPR and 11 SD.

As for melanoma, we have not seen any evidence that Tes would work in this indication, although the drug does have orphan status. Of note, Daiichi does mention some preclinical activity in a B16 melanoma mouse xenograft model. [WO-00127115, link not available]

We think colon cancer is a long shot as the trials are long, expensive and the big players (Avastin) dominate the landscape. We are unsure if GNTA is planning on taking this route. They have mentioned Tes’ “promising activity” in this area.

A study in a 2nd-line gastric cancer setting seems like the best strategy, which is what GNTA is doing, though we do have concerns around the narrow therapeutic window. No severe neuropathies were reported in the gastric trial, but the concern of neutropenia still remains despite the lift of the clinical hold. The details of the safety issues and fatalities have never been released, and the lack of transparency warrants serious consideration. We would also point out that results from the gastric study were modest at best with no CRs, and in a taxane-naive setting. We would ideally like to see data in patients who have built up pgp/MDR resistance (i.e. paclitaxel or docetaxel resistant patients) while still maintaining a lower incidence and severity of side effects. We are encouraged by the low incidence/severity of peripheral neuropathy relative to approved taxanes.

Tes has demonstrated in preclinical studies that it is not a substrate for ABCB1. Studies also revealed that paclitaxel and docetaxel’s cytotoxic activities are inversely correlated with ABCB1 correlation. Again, it would be great to see data in a population with ABCB1+ cancers.

GNTA has submitted an SPA to the FDA for Tes in gastric cancer. We do not know the design so it’s difficult to say what we can expect and how the drug would fare. Data from the narrow dose range study set to be released next week at ASCO should offer more information, but will not be enough to provide much momentum to the story, for us at least.

Based on the clinical data to-date, the company situation, the VERY long shot for an oral taxane, the narrow therapeutic window, the potential for neutropenia and the modest response in taxane-naive patients, we think the picture looks encouraging, but not yet compelling.

Therefore, we ask: Genta’s Tesetaxel for Gastric Cancer, Melanoma and Breast Cancer – Hype or Truth?

Our response: Hype, although we will watch closely.

Sources: Pubmed, SEC filings, press releases, Company website

Anonymous Tip? Comments? Contact us at: hr@iguanabio.com

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