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ASCO - A Big Deal For Biotechs
One of the major biotech events of the year is fast approaching. The annual meeting of the American Society of Clinical Oncology (ASCO) will take place in Chicago Woodstock Woodstock
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Ahead of the meeting, ASCO releases a list of abstracts that scientists and companies will present. In some cases, these abstracts give away at least most of the story (efficacy, safety, etc.), while other abstracts are embargoed until the meeting itself. In any case, investors can still look forward to follow-up data (abstracts are submitted well ahead of the meeting), and often the amount of attention garnered by a presentation reflects overall interest in the compound. (For more, see Stocks On Drugs: What It Takes To Get High.)
Some Companies Presenting Abstracts At ASCO:
Bristol-Myers Squibb (NYSE: BMY)
ASCO is not just for small companies. BMY's ipilimumab has been getting a fair bit of attention for awhile, and the abstracts from ASCO suggest that attention is well-deserved. The company will be presenting Phase 3 results of the drug in advanced melanoma, as well as data from a Phase 2 study in non-small cell lung cancer. In lung cancer, the drug seemed to add about one month to progression-free survival, while the data in melanoma tumors in the brain show that four of 51 patients with at least one brain lesion had a partial response and five of 51 patients showed stabilization in both brain and other tumors. Bristol will also present data on Sprycel, Erbitux and Elotuzumab, the latter of which is in Phase 2 studies and partnered with Abbott Laboratories (NYSE: ABT).
Ariad Pharmaceuticals (Nasdaq: ARIA)
Ariad's drugs are still early in development, but that does not mean it cannot present at ASCO. Ariad will have abstracts at this meeting for both AP24534 and ridaforolimus, the latter of which is being developed by Merck (NYSE: MRK). While the company's three studies being presented at ASCO were not designed as efficacy studies, they do suggest the drugs are encouraging enough to merit further study.
ArQule (Nasdaq: ARQL)
ArQule will present data on its c-Met receptor tyrosine kinase inhibitor ARQ 197 garnered from a Phase 2 study in non-small cell lung cancer. As a late-breaking submission, preliminary data from this presentation are not available until the meeting begins. That said, the company announced top-line data earlier and that data indicated a significant (roughly six and one-half weeks) improvement in progression-free survival. This same compound is being evaluated in a large number of cancer types, including sarcoma and pancreatic cancer.
Keryx Biopharmaceuticals (Nasdaq: KERX)
Keryx shares already got a pop from the release of its abstract on a Phase 2 study of perifosine in colorectal cancer. The drug appears to improve survival and slow cancer progression in patients that had already failed two courses of therapy. In fact, the drug seems to offer about seven additional months of progression-free survival (18 months versus 11 months) for about 20% of the patients. Keryx is jointly developing this drug with Aeterna Zentaris (Nasdaq: AEZS).
Nektar Therapeutics (Nasdaq: NKTR)
Nektar has done a remarkable job of repositioning itself over the last few years, and the company is making progress with a new and improved pipeline. At ASCO the company will discuss Phase 2 results from its NKTR-102 compound in ovarian cancer. Based on the ASCO abstract, it looks like there is a solid response rate here, and this could be a drug worth watching.
The Bottom Line
ASCO is a major meeting, but it is never the end-all, be-all for any biotech or pharmaceutical company. As investors have seen with Vanda Pharmaceuticals (Nasdaq: VNDA), even successful Phase 3 studies and ultimate FDA approval are not the end of the game - data still must be compelling enough to encourage broad adoption of a drug. For companies presenting data on Phase 2 or Phase 1 studies, the odds are even longer. (For more, see The Ups And Downs Of Biotechnology.)
By all means, be encouraged if a company whose stock you own presents solid data. But do not lose sight of the bigger picture - biotechnology is always a gamble, and investors would do well to focus on companies with innovative science, strong data, ample cash and a pipeline that goes deeper than one or two Phase 1 studies.
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IN PICTURES: Eight Ways To Survive A Market Downturn
Ahead of the meeting, ASCO releases a list of abstracts that scientists and companies will present. In some cases, these abstracts give away at least most of the story (efficacy, safety, etc.), while other abstracts are embargoed until the meeting itself. In any case, investors can still look forward to follow-up data (abstracts are submitted well ahead of the meeting), and often the amount of attention garnered by a presentation reflects overall interest in the compound. (For more, see Stocks On Drugs: What It Takes To Get High.)
Some Companies Presenting Abstracts At ASCO:
Bristol-Myers Squibb (NYSE: BMY)
ASCO is not just for small companies. BMY's ipilimumab has been getting a fair bit of attention for awhile, and the abstracts from ASCO suggest that attention is well-deserved. The company will be presenting Phase 3 results of the drug in advanced melanoma, as well as data from a Phase 2 study in non-small cell lung cancer. In lung cancer, the drug seemed to add about one month to progression-free survival, while the data in melanoma tumors in the brain show that four of 51 patients with at least one brain lesion had a partial response and five of 51 patients showed stabilization in both brain and other tumors. Bristol will also present data on Sprycel, Erbitux and Elotuzumab, the latter of which is in Phase 2 studies and partnered with Abbott Laboratories (NYSE: ABT).
Ariad Pharmaceuticals (Nasdaq: ARIA)
Ariad's drugs are still early in development, but that does not mean it cannot present at ASCO. Ariad will have abstracts at this meeting for both AP24534 and ridaforolimus, the latter of which is being developed by Merck (NYSE: MRK). While the company's three studies being presented at ASCO were not designed as efficacy studies, they do suggest the drugs are encouraging enough to merit further study.
ArQule will present data on its c-Met receptor tyrosine kinase inhibitor ARQ 197 garnered from a Phase 2 study in non-small cell lung cancer. As a late-breaking submission, preliminary data from this presentation are not available until the meeting begins. That said, the company announced top-line data earlier and that data indicated a significant (roughly six and one-half weeks) improvement in progression-free survival. This same compound is being evaluated in a large number of cancer types, including sarcoma and pancreatic cancer.
Keryx Biopharmaceuticals (Nasdaq: KERX)
Keryx shares already got a pop from the release of its abstract on a Phase 2 study of perifosine in colorectal cancer. The drug appears to improve survival and slow cancer progression in patients that had already failed two courses of therapy. In fact, the drug seems to offer about seven additional months of progression-free survival (18 months versus 11 months) for about 20% of the patients. Keryx is jointly developing this drug with Aeterna Zentaris (Nasdaq: AEZS).
Nektar Therapeutics (Nasdaq: NKTR)
Nektar has done a remarkable job of repositioning itself over the last few years, and the company is making progress with a new and improved pipeline. At ASCO the company will discuss Phase 2 results from its NKTR-102 compound in ovarian cancer. Based on the ASCO abstract, it looks like there is a solid response rate here, and this could be a drug worth watching.
The Bottom Line
ASCO is a major meeting, but it is never the end-all, be-all for any biotech or pharmaceutical company. As investors have seen with Vanda Pharmaceuticals (Nasdaq: VNDA), even successful Phase 3 studies and ultimate FDA approval are not the end of the game - data still must be compelling enough to encourage broad adoption of a drug. For companies presenting data on Phase 2 or Phase 1 studies, the odds are even longer. (For more, see The Ups And Downs Of Biotechnology.)
By all means, be encouraged if a company whose stock you own presents solid data. But do not lose sight of the bigger picture - biotechnology is always a gamble, and investors would do well to focus on companies with innovative science, strong data, ample cash and a pipeline that goes deeper than one or two Phase 1 studies.
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
by
Stephen D. Simpson, CFA
Stephen D. Simpson, CFA, is a freelance financial writer, investor, and consultant. He has worked as an equity analyst for both sell-side and buy-side investment companies in both equities and fixed income. Stephen's consulting work has focused primarily upon the healthcare sector, while he has also written extensively for publication on topics pertaining to investments, security analysis, and healthcare. Simpson operates the Kratisto Investing blog, and can be reached there.
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