Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Importance of Wolchok’s remarks in yesterday’s PR. The key to partnerships comes from Wolchok’s confirmation that Bavi “creates a more immune active environment in which other treatments are able to have greater anti-tumor impact.”
Look how this remark echoes and reinforces comments by Dr. Perlmutter, head of IO research at Merck, in an October ESMO article on Keytruda vs. Opdivo. Dr. Perlmutter explained that higher levels of PD-L1 confer a greater benefit from PD-1 blockers and “It turns out PD-L1 expression is just a marker for the presence of an immune response.” Here is a quote from the article:
Good post Stoneroad - Same reasoning can be applied to the new high-level employees Mgmt wants to bring on with stock options from the newly authorized shares.
I would rather see the new options granted when the stock is at $5 and the new team has to work hard to get the stock to $50 to get their 10X banger, than to see these new employees handed a no brainer as they effortlessly watch the stock rise 10X from $1.20 to $12 on Company accomplishments that were paid for these last 3 years with dilution I suffered.
I agree it makes it easy for ES and SK to recruit new employees when they are giving away large pieces of my company at these sub-basement prices, but when Bavi is approved it will be just as easy to recruit them at $5.
I'm planning to vote NO on Proposal #3 and also send a polite note to the BOD saying I will happily reverse my vote, either before the AGM or at a subsequent special meeting of shareholders, if they would first take some concrete step to monetizing the anti-PS platform (e.g. close the much touted ex-US regional licensing deal) that starts to close the "astronomical" gap between the current share price and the true value of the technology.
Both new trials are "OPEN LABEL." I am surprised there hasn't been more discussion of this point in yesterday's PR. Two separate points:
First, "open label" means that SK will be able to know and use results from these two new trials to leverage his BP partnership talks starting when the first 30-40 patients have been treated.
You can be sure BMY will know results from the first 3 lung patients treated at MSK with combo Bavi plus Opdivo even before SK gets those results.
Second, the fact that the Company can specify in a PR that the Phase II/III breast trial will be "open label" means that Garnick is already well advanced in his discussions with the FDA. IMO, Garnick would only get a green light from the FDA to do an open label Phase III study because the FDA is looking at Bavi favorably, has seen the same data that led MSK to collaborate on Bavi, and is ready to accelerate Bavi's approval track in other indications, both as a drug that is safe and makes chemo better, and as a drug that is safe and makes anti-PD-1 better.
"Open label" for both trials means things are lined up now to move very fast, both at the BP level and the FDA level.
Do others agree?
Effect of BMY halt on Sunrise enrollment. Thanks Bio and CP for your very good posts on why Sunrise enrollment won’t be affected. I believe there is one more important point.
Pretend you are a US lung cancer patient with late stage NSCLC and Opdivo has somehow, miraculously, been approved, and labeled and is on the market before Sunrise enrollment completes (e.g., 3 months from now instead of the anticipated 4-6 months). You want to get access to the latest and greatest treatment for advanced NSCLC to extend your survival time so you ask your Dr. whether you should start taking Opdivo or go into the Sunrise trial. If your Dr. has heard SK speak at a visit to this trial site or at one of the many preclinical Bavi data dumps (including AACR tomorrow) then he is likely to answer the question this way: If you enter the Sunrise trial you have a 50% chance of being in the treatment arm and there is very strong evidence that Bavituximab will trigger an immune response that will increase your survival time substantially with very manageable sided effects. If you start an Opdivo regimen you have a 70% chance it won’t work for you and you have a good chance of experiencing serious side effects that we may be able to manage but we don’t understand these immune system side effects as well as we understand chemo side effects.
I acknowledge there is room for debate, but given the very positive feedback from Sunrise investigators that SK reported in the March CC, there is a good chance the Dr. would steer the patient into the chemo path with AEs he understands rather than the Opdivo path with immune system AEs that he doesn’t often see.
Of course as discussed in Bio’s and CP posts, the main points are that (1) Opdivo won’t be approved in the U.S for non-squamous NSCLC in time to affect enrollment at the US sites, (2) Opdivo will not be available at any of the non-US sites, and (3) the largest factor impacting enrollment will be the total number of other trials also recruiting similar NSCLC patients, and now that the BMY trial is finished Bavi has one less competitor to deal with.
SK already knows if Sunrise trial will be successful. IMO, SK is so confident, and is so willing to indulge the go-it-alone scenario, because he already has a pretty good idea of how Phase III Sunrise patients are doing from comparing enrollment numbers with overall number of Bavi doses shipped.
Here’s how SK knows so much. The Ph III protocol provides for Sunrise patients to continue dosing with Bavi for as long as they have not progressed. ClinicalTrial.gov says " Patients who have not experienced disease progression will continue to receive Bavituximab weekly until progression." The control group patients don’t get those extra doses of Bavi. Thus there is an easy way for SK and Shan to determine roughly how many Bavi arm patients are still progression-free. If Avid has been producing and shipping much more Bavi to the 150 clinics than just the amount needed to get half the enrolled patients through the Bavi dosing required by the official protocol, then Mgmt has a pretty good idea of how well the Bavi arm of the trial is doing.
I welcome comments on this hypothesis. The only road block I can see would be if PPHM has to stockpile in advance with the Sunrise CRO a much larger amount of Bavi than is actually needed for the initial protocol dosing of the 300 Bavi patients and never learns how much of that extra inventory has been used. But such a surplus dosing requirement would seem to very unfair for the FDA to impose. It would add a huge extra cost burden on the Company with very limited value in terms of safeguarding secrecy of trial results. After all, SK can’t tell whether an extra 200 units of Sunrise Bavi dosing are being divided as 2 units for each of 100 Bavi patients or 4 units for each of 50 patients. It could be just 20 Bavi patients who have each survived unusually long and received 10 extra dosing units each.
Thus I conclude that the extra units of Bavi dosing that the Company has sent to the Sunrise CRO give SK a very good generalized idea of how well the Bavi arm of the trial is doing. Remember, the protocol requires that: " Patients who have not experienced disease progression will continue to receive Bavituximab weekly until progression."
If SK does indeed have this positive Sunrise indicator in his pocket, it’s no wonder that he is taking his time to strike the perfect BP deal. If he knows from the large amount of extra dosing he has shipped that TTP is way out there, then this would mean that OS is way out there as well. Depending on how much extra Bavi has been shipped, SK and Shan could estimate the maximum no. of death events in the Bavi arm and how likely Accelerated Approval might be at the 2nd look-in in the fall of 2015. If SK has this ace in his pocket, why wouldn’t he play hard to get with BP.
CP - I will echo your post with this observation. Everyone should have a look at the new pie chart put up as Slide No. 25 at the ASM. For the first time the Company has had the hutspah to illustrate the full commercial potential of the Bavi platform in four quadrants: Oncology Therapeutics; Imaging/Diagnostics; Antibody Drug Conjugates; and Infectious Diseases.
The reason for the delay in closing a deal is because BPs are not yet willing to pay for the full commercial value of all 4 quadrants, and the Company doesn't yet have enough clinical data to prove that it can be successful in all 4 quadrants.
If they do a BP deal today for the Oncology Therapeutics quadrant, the deal terms the BP wants will almost certainly restrict the Company's ability to independently commercialize the other 3 quadrants. Even to do a regional license like a liver cancer license for only the Pacific Rim requires the Company to have enough clinical data to make a credible pitch that they could go it alone.
The 24 or more collaborations, several of which SK said are in the Infectious Disease sector (i.e. viral indications), show that the Company is on a path to demonstrate that Bavi can be a value-added player on all 4 quadrants. IMO, we need about 6 more months before the combination of (1) the early data coming out of these 24 collaborations, (2) the before-and-after Bavi TME biopsy data, (3) the confirming clinical efficacy data from breast and liver trials, and (4) the first Sunrise look-in data, all point in the same direction and the first big BP deal (of many) closes.
One picture is worth a thousand words. Check out Slide #25. Sorry I don't know how to paste it here.
Bio-- You may well be right in saying the only way to slice it is geographically, region by region.
I was just trying to think outside the box given that the commercialization of multiple downstream checkpoint drugs, all of which are used in combo cocktails, is going to change the context and texture of BP licensing for decades to come.
Bungler-- Count me among those who are struggling to figure out the Partnership-by-indication puzzle SK seemed to throw on the table when he said in CC that his partnering priority was to do deals that put Bavi into late stage trials in breast and liver.
The only thing I've come up with is this: The next decade of oncology will not be so much about Bavi + chemo, but rather Bavi plus downstream immune checkpoint drugs. As downstream immunotherapy clinical trials branch out from melanoma and lung to other indications, and it become clear that Bavi can work wonders in many combo situations with different downstream checkpoints. maybe the new licensing strategy is really about Partnership-by-Checkpoint, not Partnership-by-Indication.
In other words, the Company gives BMS a non-exclusive license for all combos of Bavi + CTLA-4 on condition that BMS not only pays large amounts as milestones are achieved, but also agrees to fund a Phase II/III trial of Bavi + CTLA4 in HER- breast cancer.
Then they do this again with Merck and Roche or anyone else who has a promising downstream checkpoint that has proven to work well with Bavi in animal models.
Each license agreement would give PPHM a veto right to prevent Bavi from being used in combo with the downstream checkpoint in a clinical trial that PPHM did not approve. So for example, if the Company never allowed BMS to do a lung cancer clinical trial with Bavi + CTLA4, this market would be preserved to PPHM. It's hard to imagine any oncologist Doc. would dare on his own to experiment with such an untested combination. Thus Bavi + Docetaxel could still become the SOC in NSCLC 2-3 years from now. When the time is right and BPs have paid enough, I'm sure the Company would allow a trial of Bavi + Doce + PD-1.
This is purely my guess as to how the new multi-party, non-exclusive licensing strategy could work. Comments are invited.
There are many positive signals that can be seen from the Preferred Stock terms revealed today. One of the key signals evident here is the vote of confidence from the institutional investor(s) who buy these Preferred Shares that the Company will be closing a large BP licensing deal with upfront cash in the near term.
Unlike the interest payable on a promissory note (which must be paid whether or not the company has surplus or profits), under Delaware law (and the law of most states) dividends can only be declared/paid out of surplus or net profits. See the explanation of this at bottom of pg. S-8. You can’t borrow money or sell stock to raise the funds to pay dividends. So the investors know they can’t receive their 10.5% return unless the Company does a Cotara deal or license deal with upfront cash that generates the surplus out of which dividends can be declared.
The institutional investor(s) who take down these Preferred shares have already been identified. You don’t put down $60 million on a hope and a wish that the Company will be able to pay the 10.5%. To the contrary, the smart money that buys these shares already knows the Company has multiple options for selling/licensing its technology to generate a surplus from which it can declare the dividends.
Now that the ATM is history and the Company has (or will have in a few weeks) $60 million in the bank to pay for the Phase III trial, at least two good things will follow: (1) Phase III enrollment will take off like a hockey stick and (2) the Company will have the financial muscle and confidence to negotiate better terms for the Bavi and Cotara licensing deals that are pending.
Spanky-- That's what I heard. Can't identify sources.
The FDAs view of AA in the Phase III lung trial could be heavily influenced by before and after Bavi biopsy data from other clinical trials.
A year from now the biopsy data collected from (1) the pending IST trials, (2) the pending Bavi/Yervoy trial and (3) other new trials, will have established clearly how Bavi transforms the tumor micro environment (TME) from M2 to M1 macrophage phenotype and from immature to mature Dendritic Cells.
There is so much confirmation already published in peer reviewed journals of the importance of these TME biomarkers as indicators for the success of immunotherapy, that the FDA may well accept that Bavi's ability to affect the TME in this way represents "a surrogate endpoint that is reasonably likely to predict clinical benefit", i.e. the standard for AA.
This is another reason why the pending Bavi liver trial is so important. They are collecting TME biopsy data from the liver IST trial. If they can get confirmation in humans of the same TME effects that Thorpe showed in peer-reviewed animal studies, the FDA will be under huge pressure, about a year from now, to accept these surrogate immunotherapy endpoints as indicators of clinical benefit, … and therefore AA.
All IMO.
Good point Chalu. I agree that the Company should negotiate a minimum period of 2-3 years during which the preferred stock could not be converted to common.
This would give the Company some breathing room to prove out the anti-PS platform. Once PPHM has proved itself to be part of the mainstream of immunotherapy and has a strong partner, the investment banker holding the preferred shares would much rather bet on getting his principal back (or maybe even doubled via sale to a strategic BP) through an upside play than a downside shorting game.
But I agree that common stock dilution is common stock dilution no matter how you cut it. If the Company is not doing well 2-3 years from now when the preferred stock becomes convertible, the shorts might see the conversion and follow-on dump in the public market as an easy way to cover their short.
If the stock price 2-3 years from now is doing well and looking to get even stronger, the investment banker will dribble the shares out slowly into the rising market and the shorts will be hung out to dry.
It's a very encouraging sign to see that Michael Hedge, whose name is on the cover of the S-3 and who is the leader of the K&L Gates Life Sciences M&A team ( http://www.klgates.com/life-sciences-practices/ ), has advised the Company to use Preferred Stock financing as one of its options.
Preferred Stock is placed with institutions and other long term holders. It is better for the Company than a financing based on straight debt plus warrants because:
(1) the preferred stock dividend rate will be "cumulative" but not mandatory. That's why preferred stock can be called equity rather than debt. If the 8% or 10% coupon had to be paid each quarter whether or not there were earnings, it would be a debt instrument. But because dividends can only be paid out of earnings and have to be "declared" by the Board, the Company could go a year or two without paying these dividends, and then pay them in a lump sum at a time of its choosing. The key for the investor is that the dividends are "cumulative", meaning they don't go away and have to be paid at some time before other equity holders get anything.
(2) the cumulative dividend obligation owed by the Company is not "secured" by the technology of the Company. By its nature, preferred stock has a "preference" over common stock in liquidation, but the dividend obligation would not be "collateralized" by Avid or the anti-PS patent portfolio. Thus the investor in preferred stock is a large entity that has confidence that PPHM will succeed and ultimately pay the cumulative dividend amount. The preferred stock investor is not looking to be protected by the right to sell off the collateral prior to bankruptcy.
(3) When preferred stock is issued in publicly-traded companies, the investors have the right to convert into common at a pre-determined discount below the average public stock price as determined over some period of time prior to the conversion date. This is a huge advantage for PPHM. Unlike debt plus warrants, where the warrant exercise price is pegged to the stock price at the time the loan is made, preferred stock would minimize dilution because the institutional investor would be counting on converting into common for 20% - 30% below the public price a few years from now and then immediately selling the stock in the open market when we will be trading 15-20 million shares per day.
(4) Depending on how the preferred stock terms are drafted, there is often, but not always, a right for PPHM, on 30 or 60 days written notice, to redeem the preferred for the same principal amount that was originally invested plus payment of all cumulative dividends. This is a vehicle used in control battles to force a large institutional investor to convert his non-voting preferred shares into voting common shares … or get redeemed.
As a general matter, a long time ago PPHM shareholders approved a new Delaware Charter that gives the Board what's called "blank check" preferred stock authorization. This means we have confidence that the Board should be able to determine all of the variables discussed above (i.e. dividend rate, conversion discount, redemption rights, etc.) without having to go back to the shareholders. Preferred stock is usually sold for something like $1,000 or $5,000 per share so it doesn't matter at all how many preferred stock shares have been authorized. Of course they preferred shares can only be converted into common shares that have already been authorized.
Hope everyone can see why the S-3 Registration of these Preferred Shares multiples the opportunity for dramatically better financing terms than what was done with Oxford. A preferred stock financing is designed to be placed with large and knowledgeable institutions who can see the commercial potential of the anti-PS platform 2-3 years from now.
If Goldman Sachs or someone like that buys $60 million of this Preferred Stock offering, what they will really be betting on is that they can flip their block of preferred stock to Merck or BMS 3-4 years from now for a huge control premium over what they paid today. Yes, they will like the fact that the 9% cumulative dividend is 3 times what they can get on a 10-year Treasury Note, but what they are really hoping for is that the Company will be "in play" three years from now and the same Preferred Shares that they bought for $5K/share can be sold to BMS for $25K/share. I'm sure Michael Hedges is smart enough to put a restriction in the Preferred Stock Purchase Agreement saying that PPHM's new investment banker cannot sell the preferred shares to a third party without the Company's consent.
The real drivers for all of this are the new KOLs on the Advisory Board. When the head cancer immunotherapy analyst at Goldman Sachs sits down with Drs Gabrilovich and Antonia for a little discussion of how Bavi effects MDSCs and promotes an anti-cancer TME (Tumor Micro Environment), we will finally have the weight and credibility needed to pull of a preferred stock financing play like this.
Of course it won't hurt if Dr. Garnick also shows up at the Goldman Sachs meeting and explains why the Phase III trial design and early-look opportunities all indicate that the FDA is showing a very positive and supportive attitude towards the Ph III trial
I haven't posted in months but I was struck by Slide #25 which says at bottom that data from PS Imaging trial is "expected in 2013."
So I went to ClinicalTrials.gov., which says that PGN650 trial is "still recruiting."
When I wrote Chris Keenan just now for a confirmation that Slide #25 is correct, he replied that the government website has an open-ended completion date, but the Company believes it "may have data in 2013."
EBS-- Thanks for the great find. I have 3 comments:
1. The 60 day comment period on these proposed Guidelines could explain why the Company is acting so confident but at the same time remaining so silent. When the Guidance becomes "final" in Aug. or Sept. would be the first time the Company could discuss the huge impact this type of "commercialization" could have on both partnering and the Company's own internal plans for the Bavi commercial "roll out" in multiple applications. Any BP will recognize that this right "to use [Bavi] for widespread treatment [commercial] use" concurrently with the clinical trials makes a broad-specturm drug like Bavi immensely more valuable because hundreds of IST research docs will do most of the clinical work for free to complete the proof of Bavi's importance in multiple applications.
2. Under the Regulation Sunstar kindly linked for us, the first requirement is "The drug is being investigated in a controlled clinical trial under an IND designed to support a marketing application for the expanded access use...”. This requirement that the IND be sufficient to support a "marketing application" probably explains why Garnick said this during the last CC:
FTM-- Thanks for this clarity on difference between Bavi's upstream MOA and PD-1/ PD-L1 downstream MOA.
I think the Company has adopted the "checkpoint" terminology because that is the buzz word everyone is using these days when discussing immnotherapies. In fact, however, as your post makes clear, a car-driving metaphor would work better.
IMO, it would be clearer to say that the MOA / "checkpoint" of downstream immunotherapies like PD-1/ PD-L1 functions by taking the foot off the brakes while the MOA / checkpoint of Bavi functions by putting the foot on the accelerator.
The downstream MOAs of PD-1 and CTLA-4 remove blocks that are holding killer T-Cells in check.
The upstream MOA of Bavi stimulates a fundamental change in the tumor microenvironment that in turn activates killer T-Cells but also turns on a second tumor killing mechanism called ADCC. See far right of the the third slide at: http://www.peregrineinc.com/technology/bavituximab-oncology/mechanism-of-action.html
One MOA lifts the brakes on killer T-Cells. The other MOA (Bavi) hits the immune-response accelerator.
LIFTING THE FOOT OFF THE BRAKES AND HITTING THE GAS AT THE SAME TIME MAKES FOR GREAT SYNERGIES !!!
... and Roche, BMY and Merck all know this. :) :)
Thank you Mojo-- Great find !!! Confirms everything SK was hinting at during the CC, namely, Roche, BMY and Merck are already very aware of the advantages that will come from combining PD-1 and PD-L1 with Bavi.
Genentech even acknowledges these synergies in a patent application filed Dec. 8, 2009.
If Genentech and Roche anticipated the advantage of combining PD-L1 with Bavi as far back as 2009, it's very believable that when SK said in the CC this week that the immunotherapy studies combining Bavi with PD-L1 and CTLA-4 are "well-advanced", he meant "well-advanced" as in "almost ready for publication."
Aikifred-- You make fair points.
In reply, it would just point out PPHM's entire communications MO is overwhelmingly cautious and conservative. I don't think they would re-brand the Company and announce both preclinical immunotherapy combo studies AND a clinical immunotherapy combo study to start before year-end unless the "well advanced" preclinical work had already yielded some very encouraging data.
WOW! Have you seen the new Bavi MOA images on the PPHM website: http://www.peregrineinc.com/technology/bavituximab-oncology/mechanism-of-action.html
This is a picture summary of yesterday's CC and why we will end up in the arms of an immunotherapy partner (e.g. Roche, BMY or Merck) very soon.
I especially like the new focus on T-Cells at the conclusion of both the 2nd image and the 3rd image. The 2nd image shows that without Bavi you end up at the far right of the image with just plain T-Cells that are not "cytotoxic, i.e. they are not "Killer T-Cells".
The third image shows that with Bavi you end up at the far right with Cytotoxic T-Cells PLUS a separate ADCC killing mechanism resulting from the M1 macrophage repolarization.
These slides will make it easy for analysts and media writers to understand the "upstream" nature of how Bavi increases Killer T-cells as compared with the downstream MOA that PD-1 etc use to increase Killer T-cells. At the Wedbush conference in mid-August and the Stifel conference in mid Sept., these images will make it a cake-walk for SK to explain to analysts why Bavi's upstream immunotherapy MOA has advantages that are separate and different from the MOA of all the other downstream immunotherapies --- and why all the downstream players will benefit from the synergies that come from combining both the upstream and downstream MOAs.
... and then SK whips out the data emerging from the preclinical trials currently running ("well advanced" was SK's description yesterday) with BMY, Merck and Roche.
Now if you were an analyst in that audience, what would be the first phone call you would make to your trading desk after SK sits down ???
Most important statement in CC was when King, in response to Roth question, repeated that pre-clinical trials with PD-1 and several other immunotherapy drugs were "well underway", and then added that CLINICAL TRIALS FOR THESE UPSTREAM - DOWNSTREAM IMMUNOTHERAPY COMBINATIONS WILL START BEFORE YEAR END.
That statement all but announces that there will be one or more BP partnerships before year end. There are multiple downstream immunotherapy drugs that stimulate killer T Cells, but only one upstream immunotherapy drug, namely Bavi. All of the downstream players want to partner with the one upstream player. Having both upstream and downstream MOAs happening at the same time is where the synergies lie.
Obviously the data coming out of the current preclinical studies--- i.e. bavi plus PD-1 and Bavi plus PD-L1 and Bavi plus CTLA-4,--- will influence who SK picks for a partner. What we learned today, both in SK's opening remarks and in his response to Roth question, is that those preclinical combination upstream / downstream immunotherapy studies are: "WELL UNDERWAY."
Since Steve added, in his reply to Roth, that "CLINICAL IMMUNOTHERAPY COMBINATION TRIALS WILL START BEFORE YEAR END", I have to believe that the data coming out of those pre-clinical combo studies is looking good !!!
WH-- I completely agree. The 53 Phase IIb clinics are locked and loaded to repeat the success they had the last time around.
In addition, however, you have several thousand oncologists attending ASCO this year who will see the final results of the Ph IIb trial and will want to feed even more of their patients into this exciting immuno-therapy trial.
Yes, it's great news that FDA Ph III approval is in the bag, but it's equally significant that this event happened prior to ASCO-- so there will be a real buzz among the docs who are the key to rapid enrollment.
Great post Sulaco. You nailed it !!!
Thought #7: Wait until front line NSCLC results come out in June and confirm once again in 86 more patients that Bavi works better than Avastin and with a far better safety profile. MOS in the Bavi arm only needs to be 20% better than MOS in the PC arm to establish that Bavi works better than Avastin.
Thought #8: Wait a few more months and see that Bavi is the only drug that can be safely combined with Sorafenib to enhance clinical outcomes in liver cancer.
Thought #9: Wait until the imaging data is released that showing how Bavi opens up new diagnostic frontiers.
Thought #10: Wait until animal studies from the Thorpe/Brekken lab reveal that Betabodies conjugated with toxic payloads cause complete remissions of most tumors. IMO we will see those animal studies before end of calendar 2013.
Dia-- I agree with all 3 of your points and would just add these few comments that go in the same direction:
1. A big reason why it will be easy to raise $50 million is because the Company has already been in extensive talks with Piper Jaffray and other funds about ways to finance Phase III. Analysts like Charles Duncan fully understand the potential of Bavi and how much money PJ could make by doing a private placement offering to raise the needed Phase III funds. The days are long gone when it was only BPs who could understand the significance of (a) the ASCO data that will be presented this month and (b) the favorable FDA Minutes approving the Phase III (especially if the "early look" is set at only 150 patients).
2. Time is on PPHM's side. It will get easier and easier to get back to the "astonishing" terms BP offered back in Sept as:
(a) an Asian BP offers a Bavi license deal for the Pacific Rim / liver cancer;
(b) the Bavi subgroup analysis in Pancreatic leads to start of a new trial combining Bavi with Abraxane;
(c) 1st line NSCLC data comes in. Given Bavi's great safety profile, all Bavi has to do prove itself better than Avastin in front line is match the 20% MOS improvement seen in the Company's Ph IIa front line trial. We don't need anything close to the 60% MOS improvement seen in 2nd line for 1st line trial to be deemed a huge success;
(d) data from the pending imaging trial is released; and
(e) stunning pre-clinical data is released, IMO, as early as 2H 2013 showing how 2nd generation Bavi works in animals when conjugated with a payload.
All the Company needs to do is start the Phase III on its own and suddenly that astonishing 50:50 sharing-of-revenues partnership deal will be back on the table !
It may take another 4-6 months or it may happen more quickly, but the Company knows they can get back to a deal like the one they had in Sept as remaining Bavi clinical data matures, as alternative Bavi joint venture opportunities develop, and as BP sees that biotech analysts and funds are buying into the same story that they are waiting on.
Here are the EOP2 FDA Guidelines: http://www.fda.gov/downloads/Drugs/Guidances/ucm153222.pdf
We are requesting a "Type B Meeting".
Page 13 of the PDF, Section X of the document, says FDA has 30 days to finalize Minutes. Section XI indicates time could go on longer if SK and Garnick disagree with the Minutes and request a clarification, but my understanding is that in most cases the final tweaking and clarifying of the Minutes by both sides happens within the initial 30 days.
Licensing royalties for biotechs are normally in the 10-15% range. To persuade a BP to give up 40% or 50% of the pie, you have to have strong negotiating leverage, which comes from multiple factors, including:
-- great efficacy data in at least one major indication;
-- broad spectrum platform likely to work in multiple cancer types;
-- great safety profile;
-- great future for diagnostic applications;
-- great potential for 2nd generation applications from conjugating Bavi with a toxic payload;
-- a clinical management team with enough depth to perform some fair share of the clinical work.
The Guidelines for EOP2 meetings require the FDA to hold the meeting within 60 days after application is made by the Company. Given that the Company was almost ready to apply for the EOP2 meeting back in Sept when things blew up, it is reasonable to assume that they applied to the FDA within days of confirming their reconstructed Phase IIb data and announcing it on Feb 19. We also know from Garnick's remarks during the March 12 CC that he was hard at work submitting the final filing package at that time.
Thus I am assuming the EOP2 meeting was held in late April or first week of May. I do not know this for a fact.
However, I am told by IR that the better practice is to wait to announce the results of the EOP2 meeting until after the Minutes of the meeting have been finalized, and according to the EOP2 Guidelines, that can take up to 30 more days after the meeting to allow for further back and forth discussion and finalization of the Minutes.
The Minutes of an EOP2 meeting, once finalized, are like a decision of a court. They are binding on the FDA and the Company. All the BPs who are looking at a possible alliance with PPHM will review and rely on the final Minutes of that meeting before committing big bucks to a partnership.
IMO we are only waiting now for the minutes to be finalized and that could happen any time in the next 3 weeks.
Regarding new hires and timing of BP partnership, IMO the new senior mgmt. hires are much more than a negotiating ploy with BP. If the Company wants to cut a partnership deal where Bavi North American market revenues are shared 50:50, then it has to have the clinical trial resources to actually perform half-- or at least 30%-- of the clinical work as Bavi advances through multiple trials in multiple cancer types.
In his comments on Slide 15 at the March 18 Roth Conference , SK stated: "One of our goals in partnering is to primarily do Ex-US partnering and maintain as much of the U.S. rights as we can."
I was told in a March conversation with IR that the goal was to get to a 50:50 sharing of the U.S. market with the BP partner, but back in September the Company experienced resistance from the BPs in achieving this goal.
Now that 6 months more clinical data has come in on multiple cancer types, and assuming the FDA grants a favorable Ph III NSCLC trial design, it seems that the Company is ready to be bold in asking BP for a 50:50 deal.
The Bavi platform is so enormous and covers so many indications that it would be easy to divide up the clinical trial work so that Phase IIIs are done by the BP with PPHM input and mfg. support and the Phase I and II studies are done by PPHM with BP support.
Under Garnick's direction, PPHM has been able to go through the critical FDA EOP2 meeting on its own. The die is already cast on the trial design, including the number of patients that have to be treated before there is an "early look" at the data.
The obvious next step is for the Company to build up the mgmt team so it is ready to start multiple clinical trials on its own. Only by being ready to carry 50% of the clinical trial load can SK pull off a BP partnership with a 50:50 sharing of North American revenues.
As the clinical data continues to roll in and it becomes clear Bavi works well and with great safety profile on all solid tumor cancers, the biotech analyst community will be quick to give our pps a huge premium based on having cut a 50:50 deal with the BP.
Than you FTM. Very interesting that there will be a poster on the HER2- breast cancer IST even though ClinicalTrials.gov says today that "This study is currently recruiting."
There are only 14 patients in the total trial population. I can't imagine why ASCO would accept a poster on a trial where only 8 or 10 or 12 patients have completed dosing unless the results for that small population were quite revealing and significant !!!
Why would the principal investigator, Dr. Alison Stopeck at the Univ. of Arizona Cancer Center, publish results before completing the trial unless she had something meaningful to report.
Sounds like Bavi is about to get some buzz in the breast cancer community. :)
This is terribly sad news. When the Bavi story is fully developed, it will be clear Dr. Thorpe deserved the Nobel Prize in Medicine.
I know Dr Thorpe ran a large lab at UTSW with many colleagues that will continue his work.
It's comforting to know that even if all anti-PS work at UTSW stopped tomorrow, Dr. Thorpe left behind a patent portfolio that will keep PPHM busy for the next 20 years commercializing the hundreds of discoveries he blessed our planet with.
Here is ASCO's 2013 schedule for acceptance of abstracts: http://chicago2013.asco.org/abstracts
Note that acceptance of regular submission abstracts happens in late March (as stated by one of the analysts during the CC), but final acceptance of abstracts with late-breaking data-- e.g. the Company's front line NSCLC MOS data and data from the Bavi/Sorafinib liver trial (hopefully)-- won't happen until mid April.
The deadline for submission of late breaking trial data is April 1st.
So if we don't get a PR regarding ASCO abstracts until mid-April, that will be just fine.
Between finalizing the FDA Ph III / EOP2 submission package and finalizing late-breaking clinical data for ASCO abstracts, this is a busy time for the Company !
C..J.-- For me, the two most significant changes between Cowen and Roth slides were:
1. In Slide #3 Roth added "PS Imaging" as a new category under "Significant Partnership Opportunities." That wasn't there in the same Cowen slide. I believe they are telling us that they expect the Imaging program to be the subject of a separate partnership agreement and not lumped into a Bavi therapeutics license. That is good news.
2. As you noted, Slide #11 now indicates that the 2nd Line Phase III will be a "Multi-National" trial. I'm glad to see this new emphasis. It supports the notion that the first Bavi therapeutic license may be to an Asian partner who would run the Asian portion of the global 2nd line NSCLC trial, and probably start a separate Asian Ph III liver trial concurrently.