Endocyte starts renaissance by licensing ‘billion-dollar’ prostate cancer drug

CEO Mike Sherman believes the time is ripe for radiopharma drugs in cancer.

A few months ago, Endocyte was shedding R&D programs and staff, with questions being raised about its future. Now, it says its prospects have been resurrected by licensing a phase 3-ready prostate cancer drug.

Mike Sherman, Endocyte’s president and CEO, says the deal with Germany’s ABX GmbH gives it a drug candidate that seems to be “profoundly better than anything we’ve seen” in metastatic castration-resistant prostate cancer (mCRPC).

The new licensing deal focuses on Lu-PSMA-617, a drug that in a departure from Endocyte’s earlier therapeutic focus is designed to deliver a radioisotope rather than a cell-killing chemotherapy payload. It targets prostate-specific membrane antigen (PSMA), an antigen found in around 80% of mCRPC patients, and according to Sherman, it could be the first PSMA-targeting drug to reach the market.

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“Approximately 80,000 patients are potential candidates for Lu-PSMA-617 in the late stages of the disease, and this is just in major markets,” he told FierceBiotech. “That’s about a $5 billion market, assuming a price near that of similar therapies. As potentially first to market with a PSMA-targeted agent, we clearly see this opportunity as greater than $1 billion.”

Endocyte is paying ABX $12 million upfront for rights to the drug, along with transferring 2 million shares to the German company with another 4 million in the offing. Milestone payments could reach $160 million, and ABX is also in line for midteen royalties.

Back in June, Endocyte cut 40% of its workforce and winnowed down its small molecule drug conjugate (SMDC) pipeline to focus primarily on EC1169, a PSMA-targeted SMDC delivering the cytotoxic agent tubulysin B hydrazide, which is in phase 1 testing, and imaging agents. The move followed the departure of long-serving CEO Ron Ellis a few months earlier and a turbulent few years punctuated by the failure of Merck-partnered cancer candidate vintafolide.

Now, the biotech intends to make Lu-PSMA-617 its primary focus, starting a phase 3 trial early next year that it hopes will generate results in 2020. The radiopharmaceutical delivers a beta radiation-emitting isotope (lutetium) to PSMA-positive cells and has been shown in earlier trials to cut levels of prostate-specific antigen—a key biomarker for disease activity in prostate cancer—by 50% in between 40% and 60% of patients.

The drug achieved a 71% interim response rate in soft tissue lesions in a trial reported at the European Society for Medical Oncology meeting last month which involved patients who had previously failed conventional therapies.

“This transaction is transformational to Endocyte, accelerating our path to commercialization,” said Sherman, adding that Endocyte intends to take the program forward to commercialization on its own in major markets.

While radiopharmaceuticals have had a checkered history in terms of commercial success, he believes recent developments show their potential. Bayer’s Xofigo (radium Ra 223 dichloride) for CRPC—which made $205 million in sales in the first half of the year—“has been a commercial success, and it continues to grow at a healthy rate as familiarity with radiotherapies and development of referral networks has been established now in prostate cancer,” according to Sherman.

Meanwhile, a second radiotherapy, Advanced Accelerator Applications’ Lutathera, just received approval in Europe for neuroendocrine tumors, and while it was turned down by the FDA last December, it has been refiled with a new review date of January 26, 2018.

“Wall Street consensus estimates for that therapy exceed $500 million peak annual revenue for that indication, with scenarios to $1.5 billion annually,” commented Sherman, who said that unlike earlier-generation therapies, “the success of radioligand therapies launching today will be driven by the strength of their clinical data and not driven by market barriers between specialists.”

Sherman stressed that the licensing deal with ABX is “not a departure from our drug conjugate capability. In fact, our companion imaging agents currently in development carry radioisotopes.”

Details of the pivotal trial for Lu-PSMA-617 still have to be worked out in consultation with the FDA, but it is anticipated that it will involve PSMA-positive mCRPC patients who have been treated with one antiandrogen and at least one taxane drug.

As for funding the program, Sherman says Endocyte is solid. “We maintain a strong balance sheet and are forecasting more than $90 million in cash at the end of 2017.   Given the activity we see with Lu-PMSA-617 and the fact that this is a targeted agent for PSMA-positive patients only, we believe this will be a relatively short and targeted trial and we can fund all scenarios.”

The biotech is also excited about the prospects for its CAR-T immuno-oncology program in solid tumors, and says it plans to start trials of its first candidate in pediatric osteosarcoma in collaboration with the Seattle Children’s Research Institute in the second half of 2018.