UPDATED: Epizyme says it’s excited by PhII data, but there’s plenty to fret about

Epizyme execs spent most of the day on Sunday making the case that their lead cancer drug tazemetostat just cleared an important milestone at an early point in a Phase II study, demonstrating an ability to shrink tumors in patients with non-Hodgkin lymphoma.

But analysts say that at this early stage of development, enthusiasm over signs of progress has to be tempered by the limited number of patients who have responded so far and caution over the biotech’s high-risk strategy to shoot for an accelerated approval. That cautionary tone helped drive down shares by 6% in early trading today.

Investigators for the Cambridge, MA-based Epizyme ($EPZM) turned up at a special lymphoma meeting for the American Society of Hematology over the weekend and rolled out preliminary efficacy data for the first 47 evaluable patients in study, with plans to eventually post data on 270 NHL patients in the trial.

The central feature of their case: Thirteen of those patients in various subgroups registered a tumor response, including 4 with encouraging complete responses — no signs of the cancer remaining — and three of three patients in a follicular lymphoma arm with EZH2 mutations seeing a partial response.

Robert Bazemore, CEO Epizyme

Robert Bazemore, CEO Epizyme

“We know from Phase I that responses tend to evolve over time,” CEO Rob Bazemore tells me. “We were excited to see this number. This is exactly what we thought we would see right now.”

Epizyme also touted favorable safety data: “The most common treatment-related adverse events (≥5%) were nausea, asthenia, thrombocytopenia, neutropenia and fatigue, of which seven were grade 3 or higher. All adverse events resulted in low rates of both dose reductions (4%) and dose discontinuations (6%).”

Over the last few years, as more biotechs crowded into the public markets, it became increasingly fashionable to create market catalysts with these interim data offerings. In rare, deadly diseases with no existing therapies, that’s been a viable approach. But in oncology, and especially a competitive field like NHL, that can be a much more complex proposition.

Just days ago Infinity Pharmaceuticals’ share price withered after it conceded that its critical duvelisib data for indolent NHL hit its endpoint on statistical significance but fell far short of looking promising commercially, forcing the company and its partner AbbVie to put their work on hold as they sized up the potentially lethal setback for the program.

And the jury is clearly still out on tazemetostat, which is supporting the bulk of the biotech’s market cap. At this stage it’s still far too early to do more than suggest signs of durability.

Epizyme is sailing in dangerous waters.

When 13 of 47 patients in the Epizyme study demonstrate a tumor response, that’s a 28% response rate — far below the 58% that Gilead was able to post with idelalisib (Zydelig) combined with rituximab. Rituxan fell in the 48% to 57% rate. At Infinity, the disappointing ORR was 46%.

Not only that, but the Phase II ORR rate is less than half of the rate tracked in Phase I. Some analysts as well as the company, though, expect that number will rise as most of the patients in the Phase II so far had only been treated for a short time.

“I’d point out that $INFI’s study was run in “indolent” NHL, i.e. follicular, SLL, MZL,” counters Wedbush analyst David Nierengarten in an e-mail to me Monday morning. “Epizyme’s study (except for 1 arm) was run in DLBCL patients. DLBCL is a much more aggressive form of NHL. A more relevant data set for comparison is the SCHOLAR-1 retrospective study of 635 DLBCL patients treated with salvage chemo that showed CR rates of 7-18% (only 1 group with >10% CR), and PR of 13-23% (again only one group >20%) and median OS of 4.6-6.9 months. Presented at this year’s ASCO.”

Based on that, Bazemore says he’s plotting a course to a potential accelerated 2018 approval and market launch by going after patient subgroups that can be identified with a diagnostic. And he’s looking at treating patients with very advanced cases that have failed multiple treatment regimens.

At this point in the Phase II study, four of the subgroups have cleared the futility hurdle, with at least two confirmed responses for: diffuse large B-cell lymphoma (DLBCL) with Germinal Center B-cell (GCB) subtype and EZH2 mutations; DLBCL with GCB subtype and wild-type EZH2; DLBCL with non-GCB subtype; and, follicular lymphoma (FL) with EZH2 mutations. The fifth cohort is enrolling patients with FL wild-type EZH2, which hasn’t yet passed the futility test.

To get those confirmations investigators employed a standard that requires only one physician confirmation of a tumor response, says Bazemore, rather than two confirmations required to nail down a response in solid tumors.

Analysts have encouraged investors to pay close attention to this response data, highlighting the company’s risky plan to shoot for accelerated approval.

“We consider the most positive aspects of today’s data presentation the 100% ORR in the FL EZH2 mutant arm (3/3 PR), and the drug’s safety, which continues to look very benign and tolerable,” notes RBC’s Simos Simeonidis. “Another important point we want to make that we view as encouraging is that we’ve now seen responses at multiple sites across 5 countries, removing questions around single-site bias. On the negative side, we note the obvious and significant drop of the ORR to 28% (from the 56-60% reported in Phase I) and the questions that arise in investors’ minds as to why 4 out of 5 patients with EZH2 mutations in the DLBCL arm did not respond.”

“We continue to view this catalyst as the main near-term driver of the stock,” Leerink’s Seamus Fernandez noted recently. “Additionally, the company is pursuing a credible fast-to-market development strategy for tazemetostat, with the potential for obtaining accelerated approval for a solid tumor indication as early as 2Q:18 and an NHL indication ~1 year later. Consistent with key value inflection points, mgmt. plans to consider late-stage/commercial partnering options in mid-2017 as data mature from its various trials.”

Sometimes companies would be advised to steer clear of these premature catalysts. Even in a down biotech market like this, which has blasted away about 60% of the value of Epizyme’s share price, anticipation can be a better tonic than a highly uncertain reality.

Here’s the press release.

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