Small-Cap Biotechs Aim to Steal Spotlight at Cancer Meeting

(Bloomberg) -- While Merck & Co. and Roche Holding AG have taken center stage at past conferences, the focus at this year’s American Society of Clinical Oncology meeting will be on more volatile small-cap drugmakers trying to advance new cancer treatments. Companies like Iovance Biotherapeutics Inc., MacroGenics Inc. and Nektar Therapeutics will be in the spotlight when the annual event kicks off Friday in Chicago.

“Sentiment heading into the conference is notably bland, but there should still be enough stock-specific events to keep us on our toes,” Baird analyst Brian Skorney said in a note to clients. The firm is focused on updated data from Iovance after an initial abstract sent shares soaring on the promise of a cell therapy that may work in solid tumors.

The Nasdaq Biotechnology Index has fallen 12% from its March highs as investors lamented some high-profile drug failures and a lack of big deals. ASCO has historically been a positive spark for the sector, although this year’s meeting has drawn noticeably less buzz than some previous editions.

“It’s not fair to call it a down year,” said Brad Loncar, chief executive of Loncar Investments, in a phone interview. The focus this weekend will be on smaller individual presentations rather than large blockbuster drugs, he said.

Iovance shares jumped 7% on Friday before paring gains. Updated results for its cell therapies showed signs of durability in solid tumors as two more patients responded to the company’s treatment in cervical cancer. Iovance updates are seen as “very positive” by Cowen analyst Boris Beaker, who suggests a response duration of 9 months to a year will be needed “to gain significant traction” in skin cancer.

Iovance has gained 57% since initial results were presented in an abstract ahead of the meeting earlier this month.

The most closely watched large-cap drugmaker at the meeting will be Amgen Inc. as it presents early results on a treatment targeting a common cancer mutation known as KRAS. Clinicians have been targeting KRAS mutations for 30 years and Amgen may finally be showing that it is a “druggable” target, according to Bloomberg Intelligence. Separately, Blueprint Medicines Corp.’s data on BLU-667 will show how competitive it is with Eli Lilly & Co.’s LOXO-292 in lung cancer.

Here are the companies to watch (all times are Chicago time and subject to change):

Amgen

Investors are looking for a deepening of responses for Amgen’s AMG 510. The drug targets a specific mutation in the KRAS family that is frequently tied to lung tumors and some colon cancers.

A 25% response rate is the bar for AMG 510 to be “clinically meaningful,” Bloomberg Intelligence analyst Asthika Goonewardene wrote. Small-cap peer Mirati Therapeutics Inc. makes a similar medicine and could move as much as 30% if Amgen’s drug has positive data, JPMorgan analyst Anupam Rama said.

The data will be presented June 3, followed by investor meeting webcast at 6:30 p.m.

Options in Amgen scheduled to expire on June 7 are anticipating a share price move of 3.3% between now and next Friday.

AstraZeneca and Merck & Co.

AstraZeneca Plc and Merck are presenting late-breaking results for their “Polo” study of Lynparza as a maintenance treatment in BRCA-mutated pancreatic cancer. This may have implications for Clovis Oncology Inc. as the small-cap drugmaker is also planning to pursue pancreatic cancer, SVB Leerink analyst Andrew Berens wrote.

Findings will be presented at a plenary session on June 2 at 3:15 p.m.

Blueprint Medicines

Data from part of the registrational “Arrow” trial of Blueprint’s BLU-667 in RET-altered lung and thyroid cancers is to be presented June 3. BLU-667 would potentially vie with Lilly’s LOXO-292, where both companies have shown competitive efficacy. Investors will be looking at safety and “difficulty benchmarking BLU-667” may drive volatility in Blueprint shares, Berens said.

Investor event will be webcast on Monday at 6:30 p.m.

Genmab and Johnson & Johnson

Results from “Columba” and “Cassiopeia,” late-stage studies of Darzalex in multiple myeloma will be presented on Sunday and Monday.

Citi said that Columba data could drive premium pricing for subcutaneous Darzalex in the U.S. Deutsche Bank said the drug faces limited risk from Sanofi’s presentation of competing CD38 antibody isatuximab, “given Darzalex’s established presence as gold standard.”

Iovance

Oppenheimer analyst Mark Breidenbach expects Iovance to have a “strong presence at ASCO, with new clinical data expected for two Phase 2 programs in the company’s pipeline of tumor infiltrating lymphocyte (TIL) therapies.” This includes results from over 60 patients in one arm of the ongoing “innovaTIL-01” trial of lifileucel in melanoma and a “significant update” from the “innovaTIL-04” study of the next-generation cell therapy, LN-145, in cervical cancer.

Iovance will present data on June 1.

Ipsen and Exelixis

Ipsen SA’s presentations include Exelixis Inc.-partnered Cabometyx as well as Onivyde and Somatuline. Oddo BHF said last week that Ipsen is among the top 15 oncology companies.

The initial abstract for Cabometyx in gastrointestinal tumors left Stifel analyst Stephen Willey’s enthusiasm for the drug “muted for now.”

MacroGenics

Late-stage results from the “Sophia” study of MacroGenics’s margetuximab in HER2-positive breast cancer will be a “battleground” between bulls and bears, said Loncar. Wall Street wanted to see around a two-month difference on progression-free survival compared to Herceptin, but data in the abstract fell short. Investors will be looking for an update on overall survival, and Loncar said “six months would be spectacular.”

A conference call is scheduled for June 4 at 1:30 p.m.

Nektar

Piper Jaffray said investors are looking for durability data from a combination of NKTR-214 with Bristol-Myers Squibb Co.’s Opdivo in a poster on sarcomas being presented Saturday.

Shares of Nektar have fallen about 60% over the past 12 months after disappointing data in melanoma at last year’s meeting. Sarcoma and updated melanoma data might give Nektar a chance “to get back in investors’ good graces,” Loncar said.

The June 7, at-the-money straddle in Nektar Therapeutics is implying a share price move of 10% between today and next Friday’s expiration.

Puma Biotech

For Puma Biotechnology Inc., data from the “Nala” study in breast cancer “do not appear clinically compelling” and likely won’t expand the market for oral therapies targeting HER2-positive breast cancer, Leerink said.

Puma Biotechnology options scheduled to expire on June 7 are implying an 11% move in shares over the next 7 days.

Roche

Data on Roche’s entrectinib, which showed promise in difficult-to-treat childhood brain tumors, will be presented June 2 at 8 a.m.

Sanofi

Sanofi is expected to present late-stage data for antibody isatuximab in relapsed refractory multiple myeloma on June 2.

Seattle Genetics

Late-breaking results from Seattle Genetics Inc.’s “EV-201” study of enfortumab vedotin will be presented June 3 around 9:24 a.m.

“Given the unmet medical need following checkpoint and platinum therapy, a duration of 6.5-7.5 months should be viewed positively among investors,” William Blair’s Matt Phipps wrote.

--With assistance from Jade Cano and Gregory Calderone.

To contact the reporter on this story: Cristin Flanagan in New York at cflanagan1@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Jeremy R. Cooke

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