Simos Sime­oni­dis, RBC Cap­i­tal

The skep­tics ripped in­to Puma Biotech­nol­o­gy $PBYI to­day, tear­ing a 20% chunk out of its share price by ear­ly af­ter­noon on Mon­day af­ter get­ting a glimpse of its lead can­cer drug’s con­tin­u­ing prob­lems spurring se­vere cas­es of di­ar­rhea in pa­tients.

The re­ac­tion quick­ly set in af­ter Puma post­ed an ab­stract for an up­com­ing can­cer sym­po­sium which spelled out the in­creas­ing rates in ner­a­tinib tri­als. RBC’s Simos Sime­oni­dis sat down to com­pare the num­bers, and reached a few un­set­tling con­clu­sions. Here’s a note he post­ed Mon­day af­ter­noon:

In an ab­stract re­leased this morn­ing, Puma dis­closed da­ta from the Phase II CON­TROL tri­al in the ex­tend­ed ad­ju­vant set­ting show­ing that treat­ment with lop­eramide helps low­er the ~40% Grade 3 (G3) di­ar­rhea seen in the Ex­teNET Phase III tri­al. How­ev­er, the num­bers re­leased to­day show that the G3 rates went up com­pared to what was dis­closed last year… Specif­i­cal­ly, in pa­tients in the orig­i­nal lop­eramide pro­to­col, the rate of G3 di­ar­rhea in­creased to 21.4% from 18.5%. Fur­ther­more, in the amend­ed pro­to­col arm, the amount of G3 di­ar­rhea more than dou­bled from 13% to 28.6%. Over­all, the blend­ed rate be­tween these two arms was 27.1% vs. 16% last year.

The com­pa­ny had re­cent­ly dis­closed they had added a new arm to the study, com­bin­ing the cor­ti­cos­teroid budes­onide to help with the pro­phy­lax­is reg­i­men. To­day’s re­lease of the wors­en­ing (vs. last year’s da­ta) di­ar­rhea, helps ex­plain the need for this change in the tri­al. While we view the 12.5% rate of G3 di­ar­rhea as po­ten­tial­ly promis­ing, we point to the small n (16 pa­tients) and to the fact that these da­ta are still ear­ly (i.e. it is pos­si­ble that they ac­tu­al­ly get worse over time, just as the da­ta from arms 1 and 2 did). The up­date in San An­to­nio should have slight­ly more ma­ture da­ta; how­ev­er, we view the fact that lop­eramide alone no longer ap­pears suf­fi­cient to pro­phy­laxe against se­vere di­ar­rhea as a sig­nif­i­cant neg­a­tive for ner­a­tinib and the stock.

One key point here: Sime­oni­dis has been cau­tious but pos­i­tive about ner­a­tinib’s prospects as a new treat­ment for breast can­cer as it un­der­goes scruti­ny at the FDA. Datasets on 5-year sur­vival and lop­eramide pro­phy­lax­is had im­proved sen­ti­ment around the com­pa­ny’s chances, he not­ed last Sep­tem­ber 20, when the FDA ac­cept­ed Puma’s ap­pli­ca­tion for re­view.

The bear po­si­tion on Puma is that the drug could be too tox­ic even for the FDA, which has proven will­ing to put up with sig­nif­i­cant threats for drugs ini­tial­ly aimed at dy­ing pa­tients. Bulls be­lieve that the safe­ty bar is low enough to clear.

In­vestors were way ahead of Sime­oni­dis to­day, dri­ving down the com­pa­ny stock as Twit­ter quick­ly spread the word to any­one who hadn’t heard al­ready.

The FDA’s Oncology Center of Excellence has been a bright spot within the agency in terms of speeding new treatments to patients. That flexibility was on full display this morning as FDA released new draft guidance spelling out exactly how oncology drug developers can fulfill both the accelerated and full approval’s requirements with just a single randomized controlled trial.

While Congress recently passed legislation that will allow FDA to require confirmatory trials to be recruiting and ongoing prior to granting an accelerated approval, the agency is now making clear that the initial trial used to win the AA, if designed appropriately, can also serve as the trial for converting the accelerated approval into a full approval.

US regulators cleared an ultra-rare drug from Pharming Group, by way of Novartis, on Friday afternoon.

The Dutch biotech said the FDA greenlit leniolisib for an immunodeficiency disease known as activated phosphoinositide 3-kinase delta (PI3Kδ) syndrome, or APDS. People 12 years and older can receive the oral drug, to be marketed as Joenja, beginning early next month, Pharming said, five days ahead of the decision deadline set by the FDA as part of a priority review.