Opinion

Prepping for ASCO? Investor Brad Loncar offers his own breakdown of what to watch for

Brad Loncar

Everybody has their own special lineup of the most keenly anticipated events scheduled for the upcoming session of ASCO this weekend. Brad Loncar, an independent investor who set up the Loncar Cancer Immunotherapy ETF $CNCR, has been prepping for this all year long.

Loncar wrote up a long list of things he’ll be watching for this upcoming weekend. I found it interesting and I think you will too. His list:


IDO Inhibitors

– There are essentially 1,000 combination trials ongoing with PD-(L)1s but so far nothing other than CTLA-4 has come close to rearing its head as a successful +1.  Will IDO be the one?

– Amazingly, Incyte’s $INCY IDO program is being valued somewhere in the range of $10-$15B.  Peak sales are being estimated as high as $4B.  But we have seen minimal data to back this up.  Is it irrational exuberance or based in reality?

– The NSCLC abstract Incyte had with Merck $MRK looked encouraging but we need to see more time, how durable the responses are, and also to see PFS broken out.

– Incyte will have 5 pivotal studies with Merck and at least 1 with Bristol ongoing by the end of the year so we need to see more data to handicap the stock’s current valuation and the potential success of these trials and this IDO program.

– NewLink $NLNK conversely is essentially a pure play IDO company and has three IDO assets yet, is only worth about $500M

– Incyte deserves to be valued significantly higher for many reasons (they are years ahead, more trials, better partners, more credibility, etc) but 20-30 times more?

– NewLink and Roche’s IDO/PD-L1 abstract didn’t look very hot.  Why?  Wrong patient population, data too early, types of cancers treated, IDO is not that great?

– I think either Incyte is grossly overvalued or NewLink is grossly undervalued.  And I’m not entirely sure which it is…maybe a little of both.  If the IDO pathway truly works, I have a hard time believing one is worth $10B+ and the other $500M.

– Incyte and Merck’s pivotal melanoma readout is setting up to be a huge binary event next year.

– In general I lean positive on IDO because I don’t think these companies are starting all of these pivotal trials based on guesswork.  But there is a lot on the line for it to succeed.

CAR-T

– CAR-T had ups and downs last year, but potentially might be approved in two indications soon.  Novartis $NVS in pediatric ALL and Kite $KITE in aggressive NHL (DLBCL). That is very significant!

– We know that CAR-T works in those types of leukemias and lymphomas because of the low-hanging-fruit CD19 target.

– A next advance that people are looking for out of CAR-T is whether there are more targets and types of cancers it can work for.

– BCMA in multiple myeloma is very high on everybody’s list for that next success.  Is this warranted?

– Bluebird $BLUE had very encouraging data with BCMA CAR-T in November 2016 but it was only a handful of patients and the data was very preliminary.  How will their ASCO data look with more patients and longer follow-up?

– A Chinese company, Nanjing Legend Biotech is also presenting BCMA CAR-T data.

– In adult ALL, Juno $JUNO had to halt their trial last year due to toxicities and patient deaths.  Kite will be presenting an update in adult ALL at ASCO.  Both Juno and Kite use the CD28 co-stimulatory domain (some people blame CD28 for Juno’s problem).

– Will Kite’s adult ALL data look safer and/or better than Juno? For adult ALL, will we learn that it is too difficult of a cancer to treat with CAR-T or was there something specifically problematic with Juno?

– I think cellular therapies in general are a rising star and a hugely interesting story. But there will be many ups and downs over time as we have seen.

PD-(L)1s

– Merck’s Keytruda showed a survival advantage in bladder cancer but Roche’s Tecentriq failed. Up to this point, we have assumed that PD-(L)1s are all essentially the same.

-Even Bristol’s $BMY new head of R&D said on their last earnings call that he didn’t think there was much difference among these drugs. But that was before Tecentriq failed.

– Why did Tecentriq fail where Keytruda succeeded?  Was it due to 1) a better trial design for Merck or 2) because PD-(L)1s are truly different and Keytruda is better (or Tecentriq is inferior)?

– It would be very significant for the field if it’s because Keytruda is better than others (or Tecentriq is inferior).

– There’s really no specific abstract to look to for this, but in general I’m very interested to learn more about the the differences in PD-(L)1s if they exist. We will want to look closely at data from all PD-(L)1 trials for differences and this will be a topic of discussion for attendees.

– Also, what will FDA do with Tecentriq in bladder cancer now that the trial has failed … rescind their accelerated approval?

– Is Roche nervous about potentially having an inferior asset in such an important category?


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