The Biotech Indices have shot up about 10% over the last six weeks, which is a clear indicator that investors are anxiously anticipating something big. One potential outcome is a round of buyouts in the drug discovery business, with Pfizer as the hunter looking for its prey; an attractive biotech with promising technology and near ripe pipeline. Depending on the target(s), a host of Big Pharma companies are expected to weigh in on the bidding. So, let the games begin.Then, there is GTx/NASDAQ: GTXI which has fallen of late, despite the potential to file an NDA in the U.S. for its lead compound, Acapodene.
Acapodene is a selective estrogen receptor modulator (SERM) that is the subject of two pivotal Phase III trials being conducted under SPAs, for the amelioration of side effects of androgen deprivation therapy (ADT) in men with prostate cancer and for the prevention of prostate cancer. The standard-of-care for men with locally advanced or metastatic prostate cancer or more recently high-risk patients is ADT, which carries with it severe side-effects such as bone loss. At present there are over 1 million men on ADT in the U.S. Positive interim analyses provide confidence that top-level results from the pivotal Phase III trial evaluating 80 mg Acapodene for the treatment of side-effects associated with ADT will be positive. The results are expected in the first quarter of 2008.
The odds of trial success and ultimate approval in this $600 million indication are high. The lipid lowering benefit demonstrated by Acapodene is clinically meaningful and a significant differentiator from competitors. Further confidence in the trial outcome is gained from the broad safety database that has been compiled for toremifene, the active ingredient in Acapodene, is backed by 350,000+ patient years of safety data and is already approved for the treatment of metastatic breast cancer.
An interim analysis of the Phase III trial evaluating 20 mg Acapodene for the prevention of prostate cancer in high risk men with high grade prostatic intraepithelial neoplasia is expected to occur in the first quarter of 2008, assuming 281 clinical events have occurred. Overall, we are optimistic about Acapodene’s ability to prevent prostate cancer given the intriguing Phase II results demonstrating that participants treated for a full year with 20 mg toremifene had a 48% reduction in the incidence of prostate cancer versus placebo. Positive prostate prevention data could mean blockbuster status for Acapodene.
Over the next 6-9 months, GTx should announce a deal out-licensing the rights for use of Acapodene in Japan. At its current share price we consider GTx a buying opportunity.
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