OncoMed rocked by combo punch as cancer trial bombs and Bayer walks; CEO not about to raise white flag

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The News:

OncoMed Pharmaceuticals Inc. (Redwood City CA) began the week with a combination punch that some say spells a knockout in the near future. In back-to-back statements, OncoMed revealed that its Celgene Inc.-partnered lead asset had bombed a Phase 2 pancreatic cancer trial and Germany’s Bayer AG had walked away from two drugs, triggering a 45% drop in its stock price to $4.84 late in the week.

#OncoMed hit with a combination punch that some say spells a knockout in the near future Click To Tweet

News of the failed clinical trial landed first and did the most damage. The trial enrolled 204 patients with metastatic pancreatic cancer and randomized them to one of three arms. All participants received Abraxane and gemcitabine. One arm received placebo on top of this regimen, while the other two took different courses of OncoMed’s experimental demcizumab. The top-line findings are devoid of reasons to be optimistic about the anti-DLL4 antibody, says FiercePharma.

Against most measures, the placebo group at least matched the experimental treatment arms. At 5.5 months, the progression-free survival seen in the placebo arm was identical to the result from the pooled treatment cohorts. That is a high point for the treatment arms.

The demcizumab arms had a median overall survival of 13.2 months. The placebo group is yet to reach its median overall survival. To finish off the losing streak, the overall response rate in the demcizumab groups came in at 33.1%, eight percentage points lower than that achieved by the placebo regimen.

The only endpoint against which OncoMed could point to numerical superiority for demcizumab was a measure that combined complete responses, partial responses and stable disease. Close to 75% of subjects in the demcizumab arm met this definition of clinical benefit, compared to 71% of patients in the placebo group.

With the data suggesting demcizumab has come to the end of the road in pancreatic cancer, the drug’s future, if it has one, and ability to generate some of the $3 billion in milestone committed to by Celgene will likely lie in other indications. OncoMed is testing demcizumab as a treatment for non-small cell lung cancer.

“Based on the lack of benefit over standard-of-care, which performed remarkably well, we will be discontinuing this trial. We will also discontinue any additional enrollment in our other ongoing demcizumab trials and conduct analyses of the data from those trials as planned,” OncoMed CEO Paul Hastings said in a statement. “OncoMed remains focused on completing and analyzing the results of the two randomized Phase 2 clinical trials, PINNACLE and DENALI, that are anticipated in the first half of this year.”

With the latest failure coming 15 months after an interim assessment found another candidate was coming up short in a pancreatic cancer trial, the pressure is now on OncoMed to deliver positive news on its earlier-stage assets. In the case of vantictumab or ipafricept, OncoMed will need to do so without the support of Bayer.

The German pharma colossus added in­jury to in­sult, no­ti­fy­ing On­coMed that it de­cided not to ex­er­cise its op­tion on the biotech’s Wnt path­way in­hibitors van­tic­tumab (anti-Fzd, OMP-18R5) and ipafri­cept (Fzd8-Fc, OMP-54F28) for “strate­gic rea­sons.”

OncoMed’s near-term survival hopes now rest on the above-mentioned Phase 2 stud­ies, PIN­NA­CLE and DE­NALI, that are due to read out later in this quar­ter.

Steve’s Take:

Talk about a Bad Day at Black Rock, except this time in Redwood City, CA. In the face of two roundhouse haymakers, you have to give OncoMed credit for sheer gumption. After Bayer followed the grim news about the failure of demcizumab for pancreatic cancer with the decision not to exercise an option to license two of the US company’s other experimental therapies, OncoMed still tried valiantly to put a positive spin on the news.

And this was just a year after its number two drug also flunked a Phase 2 trial. Then the biotech followed up with the news that Bayer is by­pass­ing a tie-up on two other key pro­grams, com­plet­ing a one-two punch.

The mid-stage study of dem­cizumab was an em­bar­rass­ing fail­ure for the pri­mary as well as the key sec­ondary end­point in the study of metasta­tic pan­cre­atic can­cer–admittedly a very tough field in can­cer R&D. Com­bin­ing dem­cizumab with Abrax­ane and gem­c­itabine in un­treated pa­tients es­sen­tially mir­rored the PFS (pancreatic fluid collections) re­sults for the com­par­a­tive triple that re­placed On­coMed’s drug with a placebo, says Endpoints.

The me­dian over­all sur­vival (OS) rate in the dem­cizumab arm, mean­while, hit 13.2 months, while the placebo group hasn’t yet reached a me­dian OS rate. The over­all re­sponse rate was 33.1% in the drug triple, com­pared to 41.2% in the com­para­tor arm.

“Based on the lack of ben­e­fit over stan­dard-of-care, which per­formed re­mark­ably well, we will be dis­con­tin­u­ing this trial. We will con­duct ad­di­tional analy­ses, to­gether with our part­ner, Cel­gene, to un­der­stand these out­comes. We will also dis­con­tinue any ad­di­tional en­roll­ment in our other on­go­ing dem­cizumab tri­als and con­duct analy­ses of the data from those tri­als as planned,” said On­coMed CEO Paul J. Hast­ings.

Cel­gene paid $177 mil­lion up front and promised more than $3 bil­lion in mile­stones to gain co-mar­ket­ing rights to dem­cizumab in 2013. That deal helped es­tab­lish On­coMed as a biotech to watch, with a spot­light on their lead can­cer stem-cell ther­apy.

“Pan­cre­atic can­cer has proven to be a uniquely chal­leng­ing dis­ease, and these data ap­pear to re­flect some of those dis­ease and treat­ment com­plex­i­ties.  The safety data seen in the YOSEMITE trial were gen­er­ally con­sis­tent and in line with our ex­pec­ta­tions. We con­tinue to an­a­lyze these data, and look for­ward to pre­sent­ing the full study find­ings at a fu­ture sci­en­tific con­gress,” said Robert Stagg, Se­nior Vice Pres­i­dent of Clin­i­cal Re­search and De­vel­op­ment.

But outside the company, are there any signs of life left in the development of demcizumab?

Turns out the answer is “yes” as HC Wainwright’s Shaunak K. Deepak maintains a Buy rating on OncoMed, with a price target of $9–over twice its current price. The analyst believes that this news “does not necessarily mean the development of these assets is over.”

As mentioned above, OncoMed expects to report data from its discontinued Phase 2 DENALI trial for demcizumab in non-small cell lung cancer later in the quarter, along with preliminary data from the Phase 1b study, although Deepak believes that this would be unlikely following the failure of the YOSEMITE trial.

On the other hand, Deepak lowered the probability of successful development of demcizumab from 30% to 10%.

Bottom Line:

OncoMed is also testing demcizumab in combination with Merck’s Keytruda as a treatment for a type of lung cancer, having already stopped another lung cancer study testing demcizumab.

An analysis of both studies is expected to be submitted to Celgene which can opt into the program. But “given YOSEMITE results, we think opt-in is unlikely,” Leerink’s Michael Schmidt said. Finally, YOSEMITE may have failed but other potential value drivers remain, Wells Fargo analysts said in a note.

Steve's Take: #OncoMed hopes for better trial data late in year and masking current debacle Click To Tweet

A double dose of black news and OncoMed’s CEO Paul Hastings almost cheerfully says, we’re not dead yet. And several analysts think he’s right. Investors, on the other hand, bailed in droves.

Biotech clearly is not for the timorous and faint-hearted. Kudos to Mr. Hastings for keeping a steady hand on the OncoMed helm as it heads toward another round of trial data later this year and perhaps some good news that makes this week’s debacle fade into the desert sunset.