Comments by Emerging Growth Capital following today’s announcements.
Progen Pharmaceuticals (ASX: PGL)[NASDAQ:PGLA]
Fast Track for Liver Cancer
Progen Pharmaceuticals have announced that PI-88 has been awarded Fast Track designation from the United States (US) Food and Drug Administration (FDA).
The major benefits of Fast Track designation are;
1) the option of submitting a New Drug Application (NDA) package in sections rather than as a single dossier,
2) scheduled meetings with the FDA to seek feedback on drug development plans, and
3) the option of utilizing surrogate endpoints for evaluation of efficacy.
We view the Fast Track designation awarded to PI-88 as highly favorable given the benefits.
It is particularly worth noting:
The option of submitting a New Drug Application (NDA) package in sections rather than as a single dossier. It is likely that all non-clinical aspects of the NDA submission will have been addressed by the time Progen is in a position to submit clinical data from the phase-III trial. This removes a degree of uncertainty from the review process and may save time (had additional or supplementary non-clinical data been required).
The option of utilizing surrogate endpoints for evaluation of efficacy. This is extremely important for the PI-88 liver cancer trial as the primary efficacy endpoint is disease free survival (DFS) i.e. not Overall Survival (OS). Oncology approvals issued by the FDA are, by-and-large, based on OS. Aside from being necessary to avoid a long trial, investors should note that Progen will be submitting an NDA based on the same endpoint that was headlined from the phase-II data set (i.e. DFS), where PI-88 extended DFS by 78%. This eliminates a significant degree of risk that is encountered when switching from a “time to progression” endpoint at phase-II to OS at phase-III.
In terms of time to market, we anticipate that the Fast Track designation should shave 6-odd months off PI-88’s review time (from approx. 12 – 18 months from submission to approx. 6 – 12 months). We also point out that while Fast Track designation is not related to the ongoing Special Protocol Assessment (SPA) negotiations, today’s announcement reflects an FDA-savvy approach by Progen; and also highlights the FDA’s impetus toward therapies for this unmet clinical need (i.e. post resection primary liver cancer patients).
Phase-II Data for NSCLC
Progen also announced that PI-88 failed to meet the primary endpoint of a phase-II study of the drug in non-small cell lung cancer (NSCLC). We have examined the summary data from the release, and make this comment;
As we noted in our distribution last week, this trial was an assessment of a therapeutic regime i.e. PI-88 and docetaxel (Taxotere, Sanofi Aventis). While addition of PI-88 seems to offer no clinical benefit to second line docetaxel treatment of NSCLC, there remains a possibility that PI-88 monotherapy (or in combination with another targeted agent) could be useful in treatment of the disease. Data from the phase-II may provide suggestive evidence for this -- a subgroup of patients treated with PI-88 monotherapy after ceasing docetaxel monotherapy survived significantly longer than those who did not receive PI-88 at all (median overall survival of 52 weeks versus 34 weeks).
In addition, it is important for investors to note that prospective oncology drugs often show activity in certain cancers but not others. This is exemplified by Nexavar where registration-worthy efficacy was generated in renal cell carcinoma (RCC) and advanced liver cancer, yet the drug failed a phase-III trial for advanced melanoma. We remind investors that PI-88 has shown very encouraging efficacy as an adjunct to surgery for primary liver cancer, as well as in advanced melanoma, and multiple myeloma.
Nonetheless --as previously emphasized-- we have not factored a commercial outcome from anything other than liver cancer into our valuation model for Progen.
As such, our valuation of A$16.45 [USD 14.30] per share remains unchanged in light of today’s data.
We continue to rate Progen as the most attractive ASX Biotechnology play.
