Why Merck And Roche Should Be Worried About DelMar Pharmaceuticals Inc.
Cancer treatment has come a long way during the past two decades, but there remain some considerable gaps in both the quality and availability of treatment for particular types of cancer. One example is a particularly aggressive form of brain cancer called glioblastoma multiforme ("GBM"). The current standard of care ("SOC") treatments exhibit efficacy in just 50% of patients, yet generated a combined $590M in US sales alone during 2012. One company is currently developing a treatment initially aimed at the not yet catered for 50%, which could also compete with the current SOC for the initial 50% of patients. That company is DelMar Pharmaceuticals, Inc. (DMPI).
DelMar Pharmaceuticals Inc.
DelMar Pharmaceuticals Inc.is a development stage biotechnology company that develops cancer therapies for the treatment of patients failing modern targeted therapy. The company's lead candidate, VAL-083, is currently undergoing clinical trials in the U.S. as a potential treatment for GBM, the most common and aggressive form of brain cancer. In the company CEO's words, "DelMar's business model is to take existing, proven therapies and wrap them in intellectual property."
VAL-083 is a small molecule chemotherapeutic, which has undergone extensive historic testing in more than 40 clinical trials sponsored by the U.S. National Cancer Institute ("NCI"). DelMar has now taken over the development of the treatment.
How does the treatment work? VAL-083 is an alkylating agent, which means it targets and attaches an alkyl group to DNA. The introduction of this alkyl group prevents the DNA molecule from replication, effectively killing the cell. The compound is orally bioavailable, and NCI trials report it readily reaches GBM tumors via this type of administration.
The company is attempting to modernize the work done by the NCI, and move the treatment forward toward approval for GBM therapy in the 50% of patients that are non-responsive to the current first and second line treatments.
What Advantage Does VAL-083 Have Over Current SOC?
The answer to this question lies in the targeting of the compound. The main building blocks of DNA are nucleotides, which in turn consist of groups of nitrogen containing biological compounds called nucleobases, or bases for short. There are two types of nucleotide in DNA, purines and pyrimidines. Adenine and guanine are purines, and cytosine and thymine are pyrimidines. Why do you need to know this? Because it is on this level that VAL-083 and the first line SOC differ.
The first line treatment for GBM patients is currently Temodar, marketed by Merck & Co., Inc. (MRK). Temodar is an alkylating agent, just like VAL-083, but it targets a different site in DNA. The treatment targets the O-6 position of the nucleobase guanine, which in many incidences triggers the death of cancer cells. However, in an equal number of incidences, GBM cells are able to repair this type of DNA damage, and diminish the therapeutic efficacy of the treatment.
VAL-083, on the other hand, attaches its alkyl to the N7 cross-links of guanine, which are not susceptible to the protein that repairs the DNA damage. This allows the treatment to completely overcome the limitations of Temodar.
The second line treatment is Avastin, marketed by Roche Holding Ltd (RHHBY). Avastin is an angiogenesis inhibitor, which simply put means it inhibits the growth of new blood vessels. Once tumors reach a certain size, they can no longer survive on the surrounding blood supply. Instead, they must develop their own blood vessels in order to sustain growth. The treatment is somewhat successful, in that it improves progression free survival, but fails to any impact on overall survival. This is because Avastin only inhibits one type of angiogenesis promoter called vascular endothelial growth factor. After a short period, GBM tumors grow blood vessels using another angiogenesis promoter.
In October 2011, DelMar initiated a phase I/II clinical trial with VAL-083. The primary outcome in the trial is the determination of maximum tolerated dose. Secondary outcome measures include tumor response in patients and pharmacokinetics. The company recently initiated the sixth cohort (30mg/m2) in the trial, and to date, no dose limiting toxicity has been observed. This is important, because it is the maximum dosage reached in the NCI trials. During these trials, VAL-083 proved effective in 40 out of 44 patients. The FDA approved Avastin on a response rate of less than 20%. Simply put, DelMar will be trialing VAL-083 for 60-70% more time above the activity threshold than the NCI trials, and need only target a quarter of its NCI proven efficacy to fall in line with the Avastin approval response rate.
VAL-083, known as "DAG for Injection" in China, is approved by the Chinese State Food and Drug Administration ("SFDA)" as a cancer chemotherapy for the treatment of Chronic Myelogenous Leukemia and lung cancer. Guangxi Wuzhou Pharmaceuticals is licensed by the SFDA to manufacture and sell VAL-083 in China for these indications, facilitated through a partnership with DelMar. The partnership provides DelMar, which hold the global rights to VAL-083, with a near-term revenue opportunity. In addition, Guangxi Wuzhou Pharmaceuticals has stated it will fund any clinical activities in China, allowing DelMar a financial risk-free opportunity to expand its revenue streams in the country.
DelMar is a development stage biotech, with no current US approval for its only candidate. This makes the company a high-risk investment. Even if the current trials demonstrate efficacy, the company would need to reproduce the results in much larger patient base. Due to the aggressive nature, and relative rarity, of GBM, conducting large-scale trials can be costly, time consuming and unpredictable. The FDA granted orphan designation to VAL-083 in 2012, which, among other things, affords DelMar tax breaks on clinical expenses and the waiver or partial payment of application fees. This mitigates the expense risk somewhat, but not the unpredictable nature of a large-scale, late stage, brain cancer trial.
DelMar offers investors exposure to a potentially game changing treatment in the brain cancer space. The current SOCs have a poor response rate, which presents an opportunity to any company that can develop and gain approval for an effective GBM alternative. DelMar has a treatment that has proven effective in other cancers, and just needs to prove this efficacy is transferable. Historic NCI data, coupled with up to date interim data from the ongoing trials, suggests transferability, and in turn, an opportunity for investors.
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.