CAVATAK/Yervoy combo comparison with T-VEC/Yervoy

T-VEC (now called Imlygic) has a headstart on CAVATAK in combo with Yervoy (ipilimumab).  However, as was the case with the CALM monotherapy results, almost anything T-VEC can do, CAVATAK can do better.

While the CAVATAK/Yervoy combination therapy results announced yesterday at the AACR annual meeting involve a very small sample, they are unambiguously good.  Here is how CAVATAK administered intralesionally compares with T-VEC administered intralesionally in their respective phase 1b combo trials with Yervoy:

Objective response rate (ORR)
T-Vec (18 patient sample) 53%
CAVATAK (5 patient sample) 80%

NB. For the sake of comparison, chemotherapy ORRs in melanoma are typically less than 15%; Furthermore, the objective responses induced by chemotherapy are typically short lived (5 year survival for advanced melanoma is only around 10%) – so you can see why oncologists and their patients are so excited about the potential of oncolytic viruses combined with checkpoint inhibitors.

Time to response
T-VEC median time to response 5.3 months (range 2.6months to 5.7months).  
CAVATAK 4 patients responding by or before 3.5 months

Individual Lesion Responses
T-VEC non-injected index lesions: 81% (13 out of 16)
CAVATAK non-injected lesions: 87% (13 out of 15)

T-VEC injected index lesions: 100% (35 out of 35)
CAVATAK injected lesions: 80% (8 out of 10)

NB. From a patient survival perspective, the non-injected lesion response is arguably more important than the injected lesion response because it proves that the combo therapy has 'taught' the immune system to kill cancer cells (or, to use more accurate language, it proves that antigenic fragments of ruptured tumors are stimulating a tumor-specific improvement in T-cell responses).  It's melanoma's ability to cause disease at a distance that ultimately leads to mortality, so it is critically important that these combo treatments are able to induce responses in distant (or non-injected) tumors.  CAVATAK is arguably superior to T-VEC in this regard.  

Adverse Events (AEs)
T-VEC grade 3 and 4 treatment AEs: 32% of patients (6 out of 18)
CAVATAK: No dose limiting toxicity (DLT), no grade 3 or 4 CAVATAK-related adverse events (i.e., 0 AEs out of 7).  There were two non-cavatak-related grade 3 adverse events reported (2 out of 7); one related to Yervoy (i.e., an immune-related AE), and the other caused by non-drug-related hypertension.

NB. As we also saw in the CALM monotherapy trial, CAVATAK has an obvious safety advantage over T-VEC.  (CAVATAK is also safer for medical staff: As the FDA AdCom noted last year, there is a realistic probability that accidental exposure to T-VEC will result in healthcare workers acquiring the herpes virus).

That CAVATAK when combined with Yervoy is safe is a big deal.  Drugs that may have acceptable safety profiles as a monotherapy are often toxic when combined.  Many checkpoint inhibitor combo trials presently underway will fail because of safety/toxicity.  Cf.,
http://www.fiercepharma.com/regulatory/yervoy-zelboraf-combo-trial-stopped-on-toxicity-worries

Commentary:
As both a monotherapy and as part of a combination therapy with checkpoint inhibitors, a thesis is emerging that CAVATAK  is  better than T-VEC by most clinical measures at a comparable stage in its clinical development.  CAVATAK, unlike T-VEC, also shows preliminary efficacy in bladder cancer.  The key advantage  T-VEC has over CAVATAK is valuable front runner/first to market status as a melanoma monotherapy.  WIth regard to combo therapy, T-VEC's front runner status is less proncounced.  When/if it comes time to start combo phase III/registration trials CAVATAK and T-VEC are likely to be on similar timelines.  The combo market is expected to be worth around US$30bill, once the first combo therapies are approved, so there is plenty of space for both T-VEC and CAVATAK.  The question is which oncolytic virus is likely to get the largest share of the combo market.

If CAVATAK achieves registration as a monotherapy for a few cancer types, its peak sales are likely to measured in the $100s of millions/year.  However, if CAVATAK becomes part of frontline therapy in combination with checkpoint inhibitors in a few cancer types, its peak sales will be measured in the $billions/year.  The significance of yesterday's data release is that we now, for the first time, have some solid clinical evidence that the latter scenario (achieving $billions/year in peak sales) is a realistic possibility.  

If the market were to value Viralytics at A$250mill on Monday, the stock would still be undervalued IMO given (i); the quality of clinical results to date (relative to all the competition, not just T-VEC), (ii); the blockbuster markets it is targeting, (iii); the fact it is targeting multiple routes of administration (including IV administration) in multiple cancers, (iv); the fact that most big pharma companies are active in the checkpoint inhibitor space (and are thus all eager to partner/buy drugs that improve the efficacy and response rates of checkpoint inhibitors), (v); quality management, and (vi); the healthy cash pile it has in the bank.

While all the obvious biotech downside risks certainly apply to VLA/CAVATAK, I maintain a view I've expressed in previous posts; viz., that VLA is the most likely ASX-listed biotech to provide a Disallowed return over the next 18 months.