Biotech Values

[DonShimoda]

JQ, it's great to have your voice added to the ARIA discussion...especially now that you're long :)

While anecdotal, there are numerous reports that patients are finding it difficult to stay on LDK378 at the full 750mg dose. These early patient reports are starting to be borne out by the trial data. For example, at ASCO, Novartis reported a 60% overall response rate in 78 patients taking LDK378 at 750mg. But when you look at the 36 patients who received doses between 400mg-750mg, the response rate dropped to 52%. As patients don’t live in the abstract, I would imagine responses will be even lower outside of a clinical trial setting.

While AP26113 exceeds IC50s for all 11 EML4-ALK mutants for which it was tested, LDK378 appears to have a much narrower efficacy/toxicity window. Based on the pre-clinical data , this really shouldn't be all that surprising, particularly when it comes to the L1152R mutation (additional info on the role L1152R has in Xalkori resistance can be found at http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3278914/. Relative to LDK378, 113 also has a lower IC50 for wild-type EGFR which could translate into less severe AEs for both diarrhea and skin rash.

While it is true LDK378 has shown activity against brain mets, I'd be very interested to see the dose response relationship. According to Ariad, 50% of crizotinib resistant patients progress with brain mets so this could end up being a key point of differentiation between the two drugs. It also may afford AP26113 a possible path to a first-line setting.

As far as valuation goes, I believe the current market cap barely reflects Iclusig's value in 2/3rd line CML. As such, AP26113 is basically a free option - one that I believe will ultimately translate into significant upside to ARIA's share price.

Then again, the only thing I truly know for certain is that it will be interesting to see how this all plays out over the next 6-12-18 months.