Investors have driven Genmab’s (CPH:GEN) stock price to new highs once again on the back of more positive data on its Johnson & Johnson ($JNJ)-partnered cancer drug, Darzalex. The latest data drop came at the ASCO Annual Meeting 2016, where the addition of Darzalex to a combination of Velcade and dexamethasone was shown to have a significant effect on outcomes in multiple myeloma patients.
Followers of the progress of the drug, a CD38 antibody, have been primed to expect impressive data ever since the trial was stopped early on efficacy grounds. The full readout lived up to expectations. Darzalex was associated with a 61% drop in the risk of progression when given with Takeda’s Velcade and dexamethasone, as compared with the two other drugs alone. And, after 15 months of analysis, the Darzalex arm was yet to yield a median progression-free number. Without Darzalex, Velcade and dexamethasone achieved a PFS rate of 7.16 months.
The trial gave the combinations to multiple myeloma patients who, on average, had already received two prior lines of treatment. As it stands, the drug is only approved for use in patients who have been through three lines of treatment, a limitation that champions of Darzalex have always seen as a temporary blockade on the drug’s route to becoming a main part of the standard of care in multiple myeloma. That scenario, which Jefferies analyst Peter Welford sees driving Darzalex to annual sales of $7 billion, has become increasingly likely as data have emerged over the past two weeks.
Investors have responded by pushing the company’s share price beyond its already historically lofty levels. Having first topped DKK 1,200 a share in the back half of May, the stock has now taken up residence at such prices, giving Genmab a market cap upward of $11 billion. The company has hit the highs following a 12-month period, starting around the time of ASCO 2015, in which a succession of positive developments for Genmab and Darzalex have resulted in the stock gaining more than 100%.
Darzalex’s procession could be seen as vindicating Celgene’s ($CELG) decision to walk away from an $818 million agreement that gave it rights to MorphoSys’ (ETR:MOR) rival CD38 antibody, MOR202, although the drug’s developer still thinks it can claim a piece of the market. MorphoSys used the ASCO meeting to release additional data on MOR202 that linked it to complete and partial responses when given with Celgene’s Imnovid and dexamethasone.
At this stage, it is too early to tell conclusively how the drug compares to Darzalex in terms of efficacy. What is clear is that MOR202 will come to market well after Darzalex, assuming it makes it that far. Having ceded this head start to Darzalex, MOR202 either needs to blow Darzalex out of the water in terms of efficacy--an unlikely scenario--or match it and deliver some other benefits if it is to capture a sizble slice of the market.
In this regard, MOR202 has some things going for it. Infusion times look set to be shorter than those for Darzalex, which was typically given over three to four hours during clinical development. MOR202 is being infused over two hours. The other, perhaps more promising, way to make up lost ground may be to undercut Darzalex, the cost of which when added on top of outlays on Velcade has started to raise eyebrows.
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