ASCO15: Eyebrows Are Raised As Puma Biotech Turns Away Investors, Analyst for ASCO Event

Published: Jun 01, 2015

By Riley McDermid and Mark Terry
May 28, 2015
By Riley McDermid and Mark Terry, Breaking News Staff

Embattled development stage biopharma Puma Biotechnology is raising eyebrows again Friday after the company began turning away investors and at least one analyst from an event it has scheduled Monday at the American Society of Clinical Oncology (ASCO). The reversal comes hot on the heels of disappointing news about Puma’s breast cancer drug neratinib last week, which caused the company’s share price to plunge 25 percent before steadying.

That drop in the company’s share price meant company founder Alan Auerbach lost $250 million overnight, as his net worth went from about $1.19 billion to $940 million.

Puma let attendees know that the event was having to contract due to the "much larger than expected response" to its scheduled investor/analyst meeting. That meant it had to trim its guest list, said the company, though it did not comment on whether or not it might be trying to lie low after last week’s brutal investor trading session.

"We regret to inform you that due to this response, we are unable to confirm your reservation or accommodate you on June 1," it said in an emailed statement to some investors and analysts expecting to attend the event. Puma, headquartered in Los Angeles, released details on the results of its Phase III clinical trials for neratinib as part of its ASCO abstract.

Puma bought the rights to develop neratinib from Pfizer Inc. in 2011. An early release of data by Puma indicated that patients treated with neratinib were less likely to have a cancer recurrence, but did not divulge actual details. Investors were gutted that the drug only saw a drop of around 2.3 percent.

“This difference may or may not be clinically meaningful in an overall risk-benefit analysis,” said an analyst at BioMedTrack. “And it is unclear whether the overall risk/benefit profile of this agent is sufficient to lead to strong uptake.”

Puma’s founder, chair and chief executive Auerbach argues that investors were misinterpreting the data, particularly as it related to comparison to Roche ’s Herceptin. In an interview with Forbes, Auerbach pointed out that in adjuvant clinical trials in HER2 positive breast cancer, patients have their HER2 status tests at their local healthcare provider or at a central laboratory.

Typically, about 80 percent of those tests match up, according to Auerbach, “which means that 20 percent of the patients that the local institution believes are HER2 positive are found by the central laboratory to be HER2 negative.”

But, Auerbach points out, in the adjuvant Herceptin trials all the patients were tested by the central laboratory, which may skew the data and the enrollment qualifications.

Another point brought up is neratinib’s primary side effect, grade 3 diarrhea. Auerbach pointed out that, again, studies have found that about 50 percent of the diarrhea seen was because patients did not take loperamide as directed to control the diarrhea.

Four analysts have given Puma a Buy rating and two have given it a Hold rating. This gives the shares a consensus Overweight rating, with the consensus target price of $278.75. The company’s current value is $6.69 billion.

Puma has been on the ropes for months, after announcing in November neratinib had failed its Phase II trial for the treatment of first-line HER2-positive locally recurrent or metastatic breast cancer.

The company had been testing the drug in a NEfERTT trial, which was a randomized, two-arm Phase II trial of neratinib plus the anticancer drug paclitaxel versus trastuzumab (Herceptin) plus paclitaxel as a first-line treatment for HER2- positive locally recurrent or metastatic breast cancer.

The study had 479 patients in 33 countries with locally recurrent or metastatic breast cancer who had not received prior anticancer therapy for locally recurrent or metastatic disease. Patients were randomized to receive first-line treatment with either paclitaxel plus neratinib or paclitaxel plus trastuzumab.

But despite promising results in July, when neratinib was found effective in improving disease-free survival of breast-cancer patients, it could not duplicate those results in the mid-stage study. Puma said it will keep trying, however, and is testing the drug in eight other studies as a treatment for various forms of cancer.

Puma has attempted to stay positive about the results, stressing the drug still showed promise for other types of usage.

“As expected, there was no statistically significant difference in progression free survival and objective response rate for the paclitaxel plus neratinib arm compared to the paclitaxel plus trastuzumab arm,” said Alan Auerbach, chief executive officer and president. “However, the paclitaxel plus neratinib arm showed a statistically significant decrease in the incidence of CNS metastases compared to the paclitaxel plus trastuzumab arm.”

The primary endpoint of the NEfERTT trial was progression free survival, but results did not demonstrate a statistically significant difference between the PFS and ORR results for the two treatment arms. The progression free survival for the patients who received the combination of paclitaxel plus neratinib was 16.6 months, and 16.7 month for the patients who received the combination of paclitaxel plus trastuzumab.

The objective response rate in the trial for the patients who received the combination of paclitaxel plus neratinib was 74.8 percent and the objective response rate for the patients who received the combination of paclitaxel plus trastuzumab was 75.1 percent.

Puma said those results were in line with expectations and did not mean neratinib was dead in the water quite yet.

“This represents the first randomized trial with a HER2 targeted agent that has shown a statistically significant reduction in the incidence of CNS metastases, which we believe provides a meaningful point of differentiation for neratinib in the treatment of HER2 positive breast cancer,” said Auerbach.

“While the development of other HER2 targeted drugs has produced a clinically meaningful benefit to patients with HER2 positive breast cancer, these drugs have had little impact on CNS metastases. As a result, we believe that there remains an unmet clinical need for reducing the incidence of CNS metastases and the results of the NEfERTT study demonstrate that we may be able to provide this type of improvement with neratinib.”

Will PfizerKline Become the Next Pharma Player?
The speculation surrounding a possible bid from Pfizer Inc. for struggling GlaxoSmithKline is heating up, after one closely-watched biotech analyst said in a note last week that Pfizer buying the company would “unlock access to its balance sheet and improve its tax situation.”

Gregg Gilbert, a biotech analyst at Deutsche Bank, wrote in a note to investors “Introducing PfizerKline” that he thinks a deal would be “materially accretive” for both companies. Gilbert estimated that a bid priced at $29.86 a share, via half stock and half cash, which would push up Pfizer’s earnings per share by 10 percent to 16 percent beginning in 2016.

“We believe that the company has a sense of urgency to create value by leveraging the power of its balance sheet to do needle-moving deals,” Gilbert wrote. “Since media reports in the past have pointed to the potential for a Pfizer/GSK combination, we are revisiting that theme.”

We want to know, dear readers, if you agree? Should Glaxo continue going it alone, or might Pfizer buy it and create one of the world’s largest pharma players in history?

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