These Biotechs are Seeking Treatments in Oncology

07/03/2020 5:00 am EST


Michael Cintolo

Vice President of Investments and Chief Analyst, Cabot Heritage Corporation

Ovarian cancer is the fifth leading cause of cancer-related deaths among U.S. women and is regarded as the deadliest of all gynecologic cancers, observes Mike Cintolo, growth stock expert and editor of Cabot Top Ten Trader.

Thankfully, advances are being made in the treatment of this disease, and Mersana (MRSN) — a clinical-stage biopharma that develops antibody-drug conjugates (ADC) that target cancers — has made progress on this front.

The firm’s drug design approach begins with a “fleximer backbone” to improve drug solubility and delivery, in turn facilitating the creation of novel drug candidates. Using this approach, Mersana achieved promising interim results in a Phase I study of XMT-1536, its ADC designed to treat ovarian cancer patients.

Mersana also has a growing pipeline of candidates, including XMT-1592 (for ovarian cancer and adenocarcinoma), B7-H4 (for multiple solid tumors) and a targeted STING ADC anti-tumor drug, which the firm will release data on in the second half of this year.

It boasts a $78 million cash position, including $15 million available from a credit facility, which will support development activities going forward. It’s obviously speculative, but Mersana could have something special both in XMT-1536 and its overall approach.

Immunomedics (IMMU) has been making great strides with Trodelvy. After a couple of years of disruptions due to the manufacturing issues, in late April the company received accelerated approval from the FDA for use of the drug for the treatment of adult patients with metastatic triple-negative breast cancer (mTNBC), which affects more than two million people every year.

Trodelvy is the first antibody-drug conjugate approved by the FDA specifically for previously-treated mTNBC, and the drug’s commercial launch has begun.

It’s not all good news, though: Citing the disruption from COVID that halted clinical trials, both CEO Harout Semerjian (who had just become CEO in April) and chief medical officer Rob Iannone both tendered their resignations; no new management announcements have been made.

But trials are resuming now, with patient enrollment into the Phase 3 TROPiCS-02 study of Trodelvy at approximately 20 clinical sites ramping up as of mid-May.

Bottom line, the drug approval is the motivating factor here, and the potential is enormous, with sales expected to reach $70 million this year and north of $200 million in 2021.

IMMU has completely changed character since late March, when the stock exploded higher off the market bottom and then got another boost on news of the FDA approval.

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