Seattle Genetics (SGEN) is a large-cap biotech pharmaceutical company with commercial product revenue now running over $1 billion annually. Genmab (GMAB) is its partner for tisotumab vedotin, a potential therapy for recurrent or metastatic cervical cancer, and received $0.5 billion in royalties in 2019, mostly for Darzalex. A rival in the cervical cancer space is the much-smaller Agenus (AGEN), which has been testing balstilimab both as a monotherapy and combined with zalifrelimab for recurrent or metastatic cervical cancer. Both the Seattle Genetics team and Agenus team reported their latest data at ESMO (European Society for Medical Oncology) in mid-September.

Because there is no current good therapy for cervical cancer that is metastatic or recurring, and the cancer tends to be deadly, there is a high unmet medical need for a therapy. The rivals use two different mechanisms of action, which will be described below. Since neither therapy looks like anything near a guaranteed cure, my belief is that, if both are approved for use by regulators, both will see substantial use by physicians. I believe that Agenus may have been knocked off a recent stock high because of the competition. Below, I will compare the results of the two trials before forming my conclusions about the effects on the stock prices of the three companies.

Recurrent Cervical Cancer background

According to the Seattle Genetics cervical cancer trial press release, existing therapies for previously treated recurrent or metastatic cervical cancer have ORR (objective response rates) of less than 15 percent, with median OS (overall survival) ranging up to 9.4 months. Globally, there are over 500,000 cervical cancer cases each year, and over 250,000 deaths. While many of the global deaths can be attributed to poor treatment, in the United States there were about 4,250 cervical cancer deaths in 2019. Clearly, current treatments are inadequate. Radiation, surgery, and chemotherapy are all first-line treatments. Bevacizumab (Avastin) is also used as a first-line drug treatment.

Seattle Genetics, Genmab and the ADC approach with tisotumab vedotin

Tisotumab vedotin is an ADC (antibody-drug conjugate) consisting of Genmab’s tissue factor antibody and Seattle Genetics protease-cleavable linker and the payload, monomethyl auristatin E. Tissue factor is a protein that can promote tumor growth. It is highly expressed on many solid tumors. As with other ADCs, the drug is attracted to some factor on the cancer cell surface and kills the cell by delivering the payload.

Agenus’s immune-oncology approach with balstilimab and zalifrelimab

Agenus’s balstilimab is a monoclonal antibody targeting PD-1, which Agenus hopes means it is more effective than other PD-1 antibodies like Keytruda and Opdivo. Zalifrelimab is an anti-CTLA-4 antibody that is engineered to compete with Yervoy. PD-1 and CTLA-4 protect tumors from attacks by the immune system. Both the monotherapies and the combination enable the immune system to destroy the cancer, at least in some cases.

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Comparison of trial results

A word of warning is warranted when comparing trial results, especially for trials with small numbers of patients, including these. Even when the target disease has the same description, the trial populations are not likely to be identical. For instance, they may differ by age and disease severity, or how many and exactly what prior therapies have been tried, or the mutations present in the cancer. To do a true comparison, you would need a randomized, blinded, three-arm trial, with one arm receiving tisotumab vedotin, one arm balstilimab plus zalifrelimab, and one arm placebo or perhaps another round of chemotherapy.

The following table, compiled by the author, summarizes the results:

tisotumab vedotin

balstilimab + zalifrelimab total

balstilimab + zalifrelimab PD-L1+

balstilimab + zalifrelimab squamous

Sample size

101

155

N.A.

N.A.

ORR

24%

22%

27%

27%

CR

17%

6%

N.A.

N.A.

PR

7%

16%

N.A.

N.A.

Median PFS

4.2 m

N.A.

N.A.

N.A.

Median OS

12.1 m

N.A.

N.A.

N.A.

In the tisotumab vedotin trial, 101 patients were treated. The trial is single-arm and ongoing.

The primary endpoint of ORR showed a 24 percent response, including 7 patients (7 percent) with a complete response and 17 patients (17 percent) with a partial response.

After a median follow-up of 10 months, the median duration of response was 8.3 months. Subgroup analyses demonstrated that responses were generally consistent across subgroups regardless of tumor histology, lines of prior therapy, and responses to prior systemic regimens, including doublet chemotherapy with bevacizumab as first-line treatment.

The median PFS was 4.2 months (95% CI: 3.0, 4.4), and the six-month PFS rate was 30 percent (95% CI: 20.8, 40.1). The median OS was 12.1 months (95% CI: 9.6, 13.9), and the six-month OS rate was 79 percent (95% CI: 69.3, 85.6).

While Agenus at ESMO also presented results for balstilimab monotherapy, here I will present just the combination therapy results, which were notably better than the monotherapy results. 155 patients were treated with the balstilimab and zalifrelimab combination therapy in a single-arm trial. Patients had a median age of 50, and 119 had had more than one prior chemotherapy.

ORR (overall response rate) was 22%, with 8 patients (6%) getting a complete response and 23 (16%) a partial response. There was a difference in subgroups: PD-L1+ cancers had a 27% ORR, but PD-L1(-) cancers had a lower, 11% ORR. The squamous cell carcinoma type had a 27% response rate. Duration of response data was not reached for the combo study but was 15.4 months for balstilimab monotherapy.

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I do not think the difference in ORR was significant, though obviously, tisotumab vedotin came in a bit higher overall. However, tisotumab vedotin had a noticeably better CR rate, which is the better outcome. It appears that the difference in mechanism is reflected in the lack of subgroup differentiation for tisotumab vedotin. For balstilimab + zalifrelimab, the PD-L1+ cancers and the squamous cell carcinomas both had better response rates than tisotumab vedotin.

If the data stays static, one might conclude that a doctor would prefer tisotumab vedotin for PD-L1(-) and non-squamous cell cervical cancers. For the more common PD-L1+ and squamous cell carcinomas, however, balstilimab + zalifrelimab might have an edge. The results may not be static. In particular, with immunotherapy, partial responses may turn into complete responses over time. As the patients are followed longer, duration of response may become a more important differentiator.

But whichever of these treatments is tried first, the majority of patients are not going to respond. So, whichever gets passed over for second-line therapy will be the likely choice for third-line therapy. That means both therapies could become strong revenue generators.

Caveats

In addition to the risk of rejection by the FDA or other regulators, and the current competition discussed as well as the possibility of future competition, in each case the stock price of the company is subject to many factors besides the commercial revenue outcome for cervical cancer. Most notably, Seattle Genetics and Genmab already have substantial commercial revenues plus extensive pipelines. Agenus has an extensive pipeline from its antibody platform that may provide considerable future value beyond the balstilimab and zalifrelimab combination in cervical cancer.

Conclusions

The results are plusses for patients, doctors, and all three companies. Based on reported results the treatments likely deserve eventual approval by the FDA, EMA, and other regulatory agencies. That will mean revenue streams for the three companies. Since Seattle Genetics has a well-established sales force and will doubtless emphasize the average rather than subgroup results, they may have an edge in the field. However, an FDA approval followed by a successful product launch is likely to have a far bigger impact on the stock price of Agenus.

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Seattle Genetics stock closed on Monday, September 28, at $190.51, giving it a market capitalization of over $32 billion. The company’s pipeline is extensive. Tisotumab vedotin is in trials for a variety of solid cancers besides cervical. The drug could be a significant revenue generator if it works for a variety of cancers. Despite the successful revenue generation from Seattle Genetics’ currently approved drugs, it is still not profitable. So, its market capitalization and stock price already anticipate substantial revenue increases and eventual profitability.

Genmab stock closed on Monday, September 28, at $36.95, giving it a market capitalization of $23.3 billion. The drugs the company develops are sold by collaborators, most notably Darzalex sales by Johnson & Johnson (JNJ), generating milestone payments and royalties. The tisotumab vedotin collaboration splits costs and profits equally between the companies. Because of its smaller market capitalization, and because it is looking at a profit split rather than royalties, I believe Genmab has a significant upside if tisotumab vedotin gets approved based on the positive results to date. However, this is the first time I have looked at Genmab, so consulting other sources would be advised.

Agenus already received royalties on a component it supplies for the Shingrix vaccine, but that is small potatoes compared to the potential revenue from an approved cancer drug. Because it has a market cap of just $0.74 billion, based on the Monday, September 28, closing price of $4.05 per share, the revenue from a cervical cancer approval could be very significant. That must be weighed against the cost of establishing a sales force, potential competition from tisotumab vedotin, and perhaps doctors prescribing other PD-1 and CTLA-4 agents off-label for cervical cancer. On the plus side, the Agenus pipeline is quite extensive for a small company. It includes an improved CTLA-4 agent, AGEN1181, that, combined with balstilimab, might get much better results than zalifrelimab or older CTLA-4 agents. However, I think investors should wait for more AGEN1181 data before making that assumption, as we should see that updated data relatively soon. Also, note that the BLA application to the FDA for balstilimab is planned for completion before year end, and the combination therapy application should not be far behind.

Disclosure: I am/we are long AGEN. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.



Via SeekingAlpha.com