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Here's Why AstraZeneca's Latest I-O Failure Isn't As Bad As It Seems


AstraZeneca plc (ADR) (NYSE: AZN) just announced that one of its development assets, a drug called Imfinzi (durvalumab), has failed to meet a key primary endpoint in an ongoing oncology study. The news has brought with it a sharp downside revaluation for the company, which is currently trading at a circa 15% discount to its pre-announcement market capitalization.

The report is disappointing, sure, but what markets seem to be missing is that it's not the end of the line for the drug in this target indication – far from it. If the drug can perform against a couple of other primary endpoints, the just announced failure will almost certainly be forgotten and the gap down that's materialized on the back of said failure will quickly close.

In other words, if things play out in the company's favor (as relates to this program) the current price may be an opportunity to pick up some shares of AstraZeneca cheap.

With this in mind, here's a look at the drug that's under investigation, how and why it failed and what to look for going forward as indicative of the program recovering long term.

As noted, the drug is called Imfinzi and the company is investigating it as a potential treatment for patients with non-small cell lung cancer, or NSCLC. The trial is set up to investigate the drug both as a monotherapy in this population (i.e. on its own) and as a combination therapy, as combined with another development stage drug called tremelimumbab. Some reading might already be familiar with the latter – it used to be owned by Pfizer Inc. (NYSE: PFE) but the latter offloaded it to AstraZeneca back in 2011. It's not had much luck along its development pathway with AstraZeneca, however, and the company is now trying to figure out whether it can outperform standard of care when combined with other development assets – the latest of which is the one in discussion here, Imfinzi.

In a sense, then, the trial we're discussing is looking at two drugs, not just one. With that said, the success or failure will be judged as success or failure of Imfinzi, not tremelimumbab, which is why the media is reporting primarily on the former in the wake of the most recent news.

So, let's look at what just happened.

The company reported that, after careful consideration, neither the monotherapy nor the combination therapy meaningfully (i.e. statistically significantly) improved progression free survival (PFS) in patients with NSCLC, as compared to a control arm that saw patients receive standard of care platinum (chemotherapy) treatment.

In other words, neither the drug nor the drug combined with tremelimumbab extended the period that patients went without their cancer getting worse as compared to the patients that received chemo. Technically, the monotherapy failing to meet the endpoint was a secondary endpoint and the endpoint wasn't even really seen through to completion – the company just reported that based on the available data it would not have brought about an increase in PFS over the standard of care in this disease setting.

That's disappointing, as Sean Bohen, Executive Vice President, Global Medicines Development and Chief Medical Officer at AstraZeneca pointed out as part of the pre-prepared statement that accompanied the press release detailing the endpoint miss. As noted above, however, it's far from terminal for the program, and here's why.

The trial was initially set up to assess overall survival (OS). For those not familiar with this terminology, PFS is how long a patient's cancer (in this instance, tumor) goes post-treatment without growing. OS, on the other hand, is how long a patient lives post-treatment. There is some debate in the biotechnology space as to which is more useful in terms of identifying and quantifying the clinical benefit. Some prefer PFS, some prefer OS. Across the patient population, however, and in turn, from a physician perspective, OS is very much superior.

As such, if this trial can show that the drug (or a combo of the drug and tremelimumab) makes patients live longer, the trial will be considered a success.

And there's a good chance that it might do just that. It's a monoclonal antibody directed against PD-L1 or, in other words, an immuno-oncology type drug. These can take a while to take effect in patients and the OS endpoint is geared towards allowing for this delay in effect. Tremelimumab is a monoclonal antibody that targets the activity of what's called cytotoxic T-lymphocyte-associated protein 4 (CTLA-4). Again, this one is an immuno-oncology drug, and again, it's far better suited to an OS endpoint than it is a PF one.

This isn’t to say that the drug is a shoo-in for success on the longer term endpoint – far from it. The failure to improve PFS is a major disappointment and the market response to the news reflects that fact. It is to say, however, that the program has a chance, if not a good chance, of redressing its failure as success as and when the OS endpoints read out.

From a timeline perspective, then, both endpoints should hit press during the first half of 2018. 


Disclosure: the author has no positions in any of the stocks mentioned and doesn't intend to open any positions in these stocks during the next 30 days.

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Biotech News FDA Trading Ideas General


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