Sirtex Medical Limited - SARAH study fails primary end point with 2mths lower survival
Higher quality of life, but lower life expectancy
Releases at the Intl Liver Cancer Congress in Amsterdam confirmed SRX's selective internal radiation therapy (SIRT) does not offer longer overall survival (OS) vs standard drug Sorafenib in primary liver cancer / hepatocellular carcinoma (HCC). SRX's SARAH study (n=459) failed to meet its primary endpoint with SIRT offering 2mths less life expectancy vs Sorafenib. UBS had not taken a view on the outcome, after discussions with key opinion leaders. The KOLs did offer that secondary endpoints & sub-segment data may be favourable & indeed SIRT offered higher quality of life. Sub-seg analysis is not available at this time; positive sub-seg data could yet rescue a market opp from SARAH.
In more detail
SIRT gave 8mths OS vs 9.9mths for Sorafenib though p-value of 0.179 is weak (where p-value is <0.05 = strong). Secondary endpoints included progression free survival (SIRT 4.1mths vs Sorafenib 3.7mths, p = 0.765) & tumour response rate (SIRT 19% vs Sorafenib 11.6%, p = 0.042). SIRT showed better side effect profile (SIRT 1,297 adverse events vs Sorafenib at 2,837) and quality of life outcome (p=0.005), the latter offering some opportunity for further study of SIRT for patients are unable to tolerate Sorafenib.
Impact: limited impact for existing salvage market & FOXFIRE study due May-17
Current & core use of SIRT remains salvage markets, where its use is well characterised. SARAH failure is unlikely to have material impact in our view; off-label use in early stage HCC is low. But the failure is unhelpful to SRX efforts to broaden take-up. Read thru for SIRveNIB trial due May-17 is poor; it is a similar trial to SARAH based across a larger patient group in Asia. However, SARAH is not considered a strong lead indicator for FOXFIRE (data due 17 May) with an OS endpoint for SIR-Spheres+ vs bevacizumab, the standard of care in metastatic colorectal cancer (mCRC).
Valuation: PT $30.30; Maintain Buy. DCF uses FCF from salvage mkt, not trials
UBS valn approach does not rely upon, & remains indifferent to trial outcome as it relies upon FCF generated on existing indications. The failure of SARAH will carry sentiment downside risk, made more modest by recent decline in share price, but this may yet be boosted by pos sub-seg data or FOXFIRE due 17-May. Longer term, UBS PT does rely on reinvigoration of the sales team, and return to higher growth in salvage market.
SRX Price at posting:
$17.00 Sentiment: Hold Disclosure: Held
(20min delay)