Madeleine Armstrong, Jacob Plieth, Evaluate
PDS and Spectrum rise, while Black Diamond, Alpine, Harpoon and Macrogenics disappoint, and others ride on big pharma’s coattails.
For some years now ASCO has been largely a big pharma conference, and if anything 2021 reinforced this trend. The meeting’s biggest stories concerned the threat of cut-price oncology drugs, PD-(L)1 inhibition moving into adjuvant settings, and the validation of a new checkpoint mechanism – all largely big company themes.
Still, analysis of stock movers over the Asco period reveals a bonanza for biotech investors, with the virtually unknown company PDS scooping the prize for biggest riser. The most significant loser, meanwhile, was Black Diamond, which fell back in what is becoming a fiercely competitive targeted lung cancer niche.
It should also be stressed that some big pharma results had a knock-on effect on smaller groups. Witness Immutep, a group that did present a relatively inconsequential Asco update, but whose 27% climb can best be attributed to Bristol Myers Squibb’s groundbreaking validation of Lag3 blockade with relatlimab.
This analysis compares share prices at market close yesterday, formally Asco’s last day, against the close on May 19, when most abstracts went live.
Of course, with all presentations becoming available on June 3, in a sense the virtual meeting ended last week. And other factors, from Covid-19 to the approval of the Alzheimer’s drug Aduhelm and pricing control concerns, also had a huge impact on biotech stocks over this time.
Still, the enthusiasm around PDS’s lead project, the HPV16-targeting cancer vaccine PDS0101, is undeniable, even though results at the Asco presentation failed to live up to data in the abstract, and the small cap group’s stock actually dipped on Monday.
The abstract detailed a 71% overall response rate among 14 patients with various HPV16-positive cancers in an NCI-led phase 2 trial combining PDS0101 with Merck KGaA’s bintrafusp alfa and M9241. In the presentation ORR dropped to 56% in 18 HPV16-positive patients; the study also enrolled seven HPV-negative patients, and including these took the updated ORR down to 40%.
Constellation presented Asco data on its EZHA inhibitor CPI-0209, but its 63% rise was due to it being bought by Morphosys. Spectrum and Iovance recovered after setbacks, the latter having earlier revealed a host of regulatory filing problems and the surprise resignation of its chief executive.
Along with Iovance other cell therapy players moved, including Bluebird – partly on resolution of a clinical hold – Allogene and Nkarta. Possibly the biggest advance, Adaptimmune showing the potential at last of engineered T-cell receptors, was rewarded with a 12% bounce on May 20, but by the time Asco ended the move had been erased.
On the downside Black Diamond failed to keep up with the pack in EGFR exon 20 insertion NSCLC, Alpine’s data were just too early, and Allogene failed to convince the markets that it had solved the problem of allogeneic Car-T therapy’s lack of durability.
Macrogenics was also a big Asco loser after early data on its B7-H3-targeting antibody-drug conjugate MGC018 reinforced concerns about the group’s inability to find a therapeutic window.
Among 22 patients with metastatic castration-resistant prostate cancer in an expansion cohort, 11 had PSA declines of 50% or greater; only seven were evaluated for tumour response, with one unconfirmed partial response. The main focus was toxicity, described during a Macrogenics conference call as a “work in progress”.
Harpoon Therapeutics, like Macrogenics off 28%, also had disappointing data in mCRPC. A phase I/II study found that the company’s HPN424, a PSMA-targeting T-cell engager, only produced one partial response among 32 patients treated with a 150-300ng/kg dose. Four patients had a PSA50 response.
HPN424 was also linked with toxicity, with six cases of grade four transaminitis and four cases of grade 3 cytokine release. Two patients discontinued owing to adverse events.
All that said, it is hard to ignore the shifting of big pharma’s tectonic plates. Asco 2021 featured practice-changing studies of Lynparza, Keytruda and Tecentriq in adjuvant breast, renal and lung cancers respectively, and overall this was taken as a net negative for Merck & Co.
There will have been broader reasons behind Merck’s 9% fall, one perhaps being the creeping advent of price competition in the PD-(L)1 space. However, over the Asco period Merck’s market cap lost $17.6bn, while Roche’s put on $22.9bn.
Oncology is primarily a market for big caps, and Asco looks set to remain chiefly a big pharma conference.