Must read.... I was surprised about the Friday trading and the drop of over 20%... maybe you must all read this: It explains what what also in my mind. Ther's absolutly no reason for the drop!
ChemoCentryx Inc (NASDAQ:CCXI): Here’s Our Take
By Mike Robinson -
September 6, 2016
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ChemoCentryx Inc (NASDAQ:CCXI) will open the Tuesday morning session out of the US at a more than 20% discount to its Friday open, on the back of some interim data from its lead pancreatic cancer trial. The company is running a phase Ib in this indication to investigate the safety and efficacy of its primary development candidate, CCX872. More often than not, when data like this hits press and a company takes a hit as a result, countless media outlets put out interpretations of the numbers, and try to explain the resulting action. In this instance, there’s practically nothing available by way of an explanation to the market move, other than the move itself.
Why is this?
Simply put, because the data is a bit foggy. That is, it doesn’t really tell us anything about the efficacy of the drug in question, and it tells us absolutely nothing about the safety of the compound, with safety being the lead co-primary endpoint in the trial.
Still, markets don’t like to sit on the fence, and it seems that despite the opacity of the currently available info, sentiment favors a bearish bias as things stand.
Is this an opportunity to get in at a discount? Perhaps.
The data is foggy, yes, but not completely useless. The primary endpoints of the trial are progression-free survival (PFS) across a 24-week time period, and subject incidence of Grade 3 or 4 adverse events, again across the 24-week trial length.
The trial is looking at patients with pancreatic adenocarcinomas, which accounts for the vast majority of exocrine pancreatic cancer diagnoses (circa 95%) and pretty much always refers to cancer that starts in the ducts of the pancreas. Patients in the trial need to be a grade 2 or lower in what’s called the Eastern Cooperative Oncology Group (ECOG) performance status score. The higher the score (1-5) the more severe the cancer. Grade 2 means ambulatory, capable of self care, but unable to carry out work activities. In other words, not great, but not debilitated.
By way of a brief introduction to the science, the drug is an immuno oncology drug designed to unmask the cancer cells from the immune system and – in turn – trigger an immune response against them. The trial is investigating the impact of the drug in combination with a current SOC chemo regimen.
So let’s look at the data. As noted, the company is looking at PFS. Note that none of the data in the table relates to PFS, it’s all about ORR. This is important, and ORR is totally different from PFS. Traditionally, the FDA will require a PFS readout to approve an oncology drug. Over the last few years, however, the agency has softened a bit in this regard, and is now more willing to accept ORR as an approval checkpoint. ChemoCentryx is going for the tougher endpoint in this trial, primarily because it’s a combination trial, and improvement in ORR is hard to attribute to an investigational drug when combined with SOC. It’s impossible to do so in a single arm trial, which this one is, as there’s nothing to compare the results to.
General ORR acceptance is more than 30% (single agents). This trial demonstrated 37% in the evaluable population (completely ignore the ITT population; again, it’s irrelevant data as there was no baseline/response measurement to go off), so if this was a single agent, we’d be lauding the results. It’s not, however, so this response may be attributable to chemo rather than CCX872. The same applies to the other measurements – stable disease at 41% is pretty good, as is tumor control at 78%. We don’t know what to attribute the response to, however, because there’s no control arm.
What are we trying to say here?
The data looks ok – not great, but ok. It pretty much falls in line with currently available chemo regimen data, perhaps with a small boost in the ORR numbers. However, it really offers no insight into the drug’s efficacy because there is no control. If one arm had chemo, and the other had the combination, we’d have something to go on. We don’t right now.
So why have markets sold off?
This is anyone’s guess. The numbers look a little lower than markets had initially hoped – ORR of 50% and above might have been enough to throw up some positive sentiment – but the bottom line here is that no insight has been offered by the data. Zero.
In turn, that markets should sell off to the tune of 20% on no insight seems like an opportunity.
If a broker came and offered you a 20% discount on a stock’s current price, with no news available (and in turn, no insight offered), ceteris paribus, it would seem like an opportunity. That’s what we have here. We’re not saying the stock is better now that it was mid last week, just that it’s certainly no worse, but it’s available at four-fifths the price.
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Disclosure: We have NO position in CCXI and have NOT been compensated for this article.
