This year’s biggest oncology conference delivered some surprises and gave investors plenty to look forward to in the months ahead. Loxo Oncology Inc. (NASDAQ: LOXO), and TG Therapeutics (NASDAQ: TGTX) are already having a great year that could get a lot better, while recently beaten down Nektar Therapeutics (NASDAQ: NKTR) will get a chance to redeem itself.
Here’s how the rest of the year could shake out for these cancer-driven biotech stocks.
Loxo Oncology: First approval on the way?
This company’s personalized approach to cancer treatment wowed the crowd at the annual meeting of the American Society of Clinical Oncology for two straight years. While investors wait for more data from Loxo’s latest head-turner, the company could receive a speedy approval decision for last year’s belle of the ball, larotrectinib. The FDA is expected to deliver a decision on or before November 26 that could give this high-flying cancer stock more lift.
Loxo’s experimental therapy is a bold, final step in a direction that cancer treatments have been moving for decades. Loxo wants to make larotrectinib available to anyone with advanced-stage tumors that harbor an NTRK gene fusion, whether they have lung cancer, stomach cancer, or belly-button cancer. Last year, the FDA expanded Keytruda‘s label to include a tissue-agnostic indication, but larotrectinib would be the first new oncology drug indicated for patients based entirely on the genetic profile of their tumors.
An approval and successful launch for larotrectinib could smooth out a path for the company’s blue ribbon winner at ASCO this year. LOXO-292 is a cancer pill that shrank tumors for 77% of 39 patients with RET fusion-positive tumors, but it’s a bit early to start popping champagne corks. There were another 10 enrolled that hadn’t been observed at the data cutoff point, and all eyes will be on updated figures the company plans to present in the second half of the year. If early responses still look durable several months from now, the stock could soar even further.
TG Therapeutics: An important new option?
One of the most successful cancer drugs to emerge in recent years is a Bruton’s tyrosine kinase inhibitor called Imbruvica. A couple of years ago, the tablets became the first chemotherapy-free treatment option for newly diagnosed patients with the most common form of leukemia, but roughly a third of patients discontinue the treatment.
TG Therapeutics is aiming one of two late-stage candidates, called umbralisib, at this group’s unmet need, and it looks like a good fit. Investigators gave the candidate to 47 evaluable patients that were intolerant to Imbruvica or Zydelig and found just 13% discontinued treatment due to an adverse event at a median follow-up of 9.5 months.
We still don’t know if it provided a progression-free survival benefit because at the cutoff date, not enough patients had progressed. This is a single-arm trial, so a long wait is a good sign that umbralisib really makes a difference. It also bodes well for the ongoing pivotal Unity study with umbralisib plus the company’s lead candidate, ublituximab.
TG Therapeutics promised to provide response rate figures from the Unity trial by the end of the summer. The main goal of the Pivotal study was to show a progression-free survival benefit compared to standard chemotherapy, but that could take years of observation. High response rates during the interim snapshot could give the stock some lift in the meantime.
Nektar Therapeutics: Deepening responses?
This biotech’s chief medical officer, Mary Tagliaferri, was downright frustrated with analysts who couldn’t see past low response rates among patients recently added to a combination study with the company’s lead candidate. Adding NKTR-214 to Opdivo from Bristol-Myers Squibb (NYSE: BMY) appeared to shrink tumors for 11 out of 13 patients as of last November, but just three of 15 added since then had responded as of late May.
The market pummeled Nektar stock even though investigators could point to an array of charts that make it look like the tumor responses observed in November were durable. In fact, they were good enough that the partners are moving forward with multiple pivotal studies.
Later this year, the company will present data that could corroborate Tagliaferri’s assertion that the new patients just didn’t have enough time to respond at the latest observation point. If she’s right, and a few other pieces fall into place, the stock could be a bargain at its new beaten-down price.
Cancer is really hard
Analysts can be insensitive, but that isn’t the reason we discuss cancer trial presentations as if they’re professional sporting events. Watching a potential new treatment become a blockbuster drug is awfully similar to following a high-school football star until they hoist up the Lombardi Trophy, except athletes probably have better chances.
Any of these stocks could soar later this year and into the long run, but be careful. Cancer drug development is a grim, unpredictable business.
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