In Vivo vol.35 May 2017 by Informa Pharma Intelligence

In Vivo vol. 35 â?&#x161; no. 05

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pharma intelligence â?&#x161; informa

ONCOLOGY Right target, right endpoint, right partner, right strategy

Data Analytics

Leadership

Open Access

Platforms

❚ CONTENTS

STRATEGIC INSIGHTS FOR LIFE SCIENCES DECISION MAKERS

In Vivo

May 2017

Pharma intelligence |

Liquid Biopsy On Course To Transform Cancer Management PETER CHARLISH Liquid biopsies look set to revolutionize the management of cancer patients. A significant application could come in immuno-oncology, given the rapid uptake of IO drugs and the need to monitor changes in a patient’s immune profile over time to guide therapy selection.

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T H E O N CO LO G Y I S S U E

With A New CSO, BristolMyers Squibb Doubles Down On Immuno-Oncology

Innovation In Oncology: An Infographic

MARC WORTMAN

GAYLE REMBOLD FURBERT

BMS’ strategy for the complex, highly competitive immuno-oncology field. A Q&A with the company’s new R&D chief, lung cancer specialist Thomas Lynch, MD.

Oncology innovation: lots of drugs, lots of trials, sometimes not enough patients. And styles of innovation depend on whether a company has a big franchise to defend or would like one. We present current data on sales, pipelines, trials and fails.

JOHN HODGSON, JANET HANIAK AND

Finding The Right Path To Category Leadership In Oncology NILS BEHNKE, MICHAEL RETTERATH AND TODD SANGSTER Oncology drug development is undergoing rapid shifts. Bain research shows companies that seek to lead in speciﬁc vertical categories outperform rivals that invest across a broad spectrum of cancer targets.

Cancer’s Next-Gen Smart Bomb: Who Will Be First To Weaponize?

Free And Open: The Next Wave In Clinical Trial Data?

WILLIAM LOONEY

Clinical trial transparency continues to pose reputational challenges for biopharma. Project Data Sphere, a non-profit group backed by the CEO Roundtable on Cancer, is taking advantage of new IT platforms to press for an industry consensus to give researchers access to decades of trial data, all for the benefit of cancer patients.

With 70 clinical trials now underway on a next generation of more precisely targeted antibody drug conjugates, we profile Ambrx and Sutro Biopharma, two smaller biotechs with promising technologies and powerful partners that augment their strong science with disease awareness, deep commercial networks and global geographic reach.

In Vivo | May 2017

WILLIAM LOONEY

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DEPARTMENTS

AROUND THE INDUSTRY

❚ From The Editor

ombinations Continue To Drive C Immuno-Oncology Deal-Making AMANDA MICKLUS

In Vivo’s Deals Of The Month: April 2017 NANCY DVORIN

When Two Worlds Collide – BTG Brings Interventional Oncology And Immunotherapy Together ASHLEY YEO

ON THE MOVE

NANCY DVORIN

Recent executive appointments in the life sciences industry

The pace of activity in the oncology drug market is dizzying. Just ask our colleagues at the Pink Sheet and Scrip who report the news – about scientific breakthroughs, industry alliances, clinical trial successes and failures, approvals and pricing pressures – as it happens. That pace will intensify over the next few weeks as the global oncology community gathers in Chicago for ASCO’s 2017 annual meeting, the theme of which is “Making a Difference in Cancer Care WITH YOU.”

We thought it an ideal time to take a step back from the churn and explore some broader themes in the business of cancer drug development. For example, everybody agrees that open access to clinical trial data is a good way to expand and accelerate pharma R&D, but figuring out the best way to do it is another matter. In mid-May, In Vivo’s parent Informa’s Pharma Intelligence announced an alliance with DrugDev, which developed and hosts platforms for one such data sharing consortium, TransCelerate Biopharma. In this issue, Bill Looney writes about Project Data Sphere, an oncology-focused initiative whose backers feel it could become the consensus model for the industry. Also in this issue, check out John Hodgson’s infographic on measuring innovation in oncology. Contributing editor Marc Wortman talks immuno-oncology strategy with BMS’ new CSO Thomas Lynch, and Peter Charlish surveys the potentially transformative liquid biopsy market. These stories and more inside and online at invivo.pharmamedtechbi.com.

REGINA PALESKI

DEAL-MAKING Deals Shaping The Medical Industry, April 2017 THE STRATEGIC TRANSACTIONS TEAM

EXCLUSIVE ONLINE CONTENT invivo.pharmamedtechbi.com ❚ Podcast: The Trump Factor: Current And Potential Changes For US Medtech ASHLEY YEO

❚ US Biosimilars: Busting Blockbusters Or Managing Obsolescence? JOHN HODGSON

❚ Schilsky On ASCO 2017: The “You” Factor In Cancer Care WILLIAM LOONEY

❚ CAR-T Cancer Drugs Front And Center At ARM Investor Day AMANDA MICKLUS

❚ The Rozy View: US Medtechs Face New Reg Burdens On Entering EU Market ED ROZYNSKI

❚ Deals In Depth: March 2017 AMANDA MICKLUS

❚ Biopharma Quarterly Deal-Making Statistics, Q1 2017

In Vivo: Always Online First Relevant and exclusive online-only content at your fingertips 24/7. Full access to our 35-year archive. Access your subscription by visiting: invivo.pharmamedtechbi.com and log in. Don’t have an online user account? Quickly and easily create one by clicking on the “Create your account” link at the top of the page.

Contact: clientservices@pharmamedtechbi.com or call: (888) 670-8900 or +1 (908) 748-1221 for additional information.

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/invivo May 2017 | In Vivo

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CONTENTS ❚

❚ ONCOLOGY: Infographic

INNOVATION IN ONCOLOGY Oncology innovation: lots of drugs, lots of trials, sometimes not enough patients. In Vivo presents current data on sales, pipelines, trials and fails.

Onco-Innovation Versus Onco-Franchise ■ # Phase II Or III Trials In Cancer ■ # Trials Of Unapproved Entities

63 240

54 45

180 36 27

120

18 60

—— % Of Phase II Or III Trials Involving Unapproved Entities

300

0 Ro . ch e

fi M

n ge

r Am

Pfi

lla

El iL il No ly va rt Ce is lg en e

J J&

Old Brands Persist

2016 Drug Sales

Over 10 years

$92.2bn

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$55.9bn

3-6 years

$17.7bn

1-3 years $11.8bn 7-10 years $7.7bn

In Vivo | May 2017

60%

32%

Sales of oncology drugs that have been on the market >10 years.

Sales of oncology drugs that have been on the market <6 years. invivo.pharmamedtechbi.com

Development Stops In Cancer Because…

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ONCOLOGY: Infographic ❚

Poor Enrollment Lack Of Efficacy Safety/Adverse Effects Early Positive Outcome Business - Pipeline/ Strategy Shift Business - Other Other Unknown PHASE (% Trials Stopped)

I/II and II

14.8%

28.3%

II/III and III 26.4%

The Cancer Pipeline Q1 2017 NUMBER OF ACTIVE TRIALS

SEE MORE ONLINE!

1116

Phase II

1021

Phase III

156

PreRegistration

For more in-depth analysis and interactive data visit Innovation In Oncology:

592 Oncology Drugs In development

http://bit.ly/2rfK16z

29 0

200

400

600

800

1000

1200

SOURCES: Datamonitor Healthcare’s PharmaVitae Analytics; Trialtrove; Pharmaprojects | Pharma Intelligence, 2017

May 2017 | In Vivo

Gayle Rembold Furbert

Phase I

❚ ONCOLOGY: Innovation

BY WILLIAM LOONEY Research is intensifying around the complex technology of antibody drug conjugates as a weapon against cancer. To date, ADCs have had only scattershot success in delivering cytotoxic “warheads” that bind to tumor cells and kill them, without the harsh patient side effects that impair standard chemotherapy.

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Big pharma is active in the space, but some of the most significant work is being done by smaller biotechs such as Ambrx and Sutro. So what? Advances in ADCs, if realized in clinical trials, will provide patients with one of the first tangible benefits of precision medicine. ADCs may also answer the question that has dogged cancer treatment for decades: how to destroy a tumor without killing the patient in the process. In Vivo | May 2017

hile innovations in drug discovery occupy center stage in the battle against cancer, it is the obscure mechanics of drug delivery that may have the edge in attacking – selectively, with laser-like precision – the mutant cell growth that leads to lethal tumors. New platform technologies linked to improved understanding of the genetic origins of most cancers are driving the creation of engineered protein antibodies that can be weaponized with toxins to single out cancer cells and kill them. The precise targeting of cancerous cells carries significant benefit to patients, minimizing the dangerous side effects of scorched earth chemotherapies, controlling the collateral damage to healthy tissue and raising the overall tolerability of a more potent treatment regimen. The concept of using antibodies to fight cancer cell proliferation has been around for more than a decade, with two products currently in commercial use: Seattle Genetics Inc.’s Adcentris (brentuximab vedotin), approved by the FDA in 2011 for treatment of Hodgkin’s lymphoma; and the Roche drug Kadcyla (trastuzumab emtansine), FDA approved in 2013 for metastatic breast cancer. The basic thrust is the assembly of an antibody-based conjugate (ADC) drug consisting of an engineered cell antibody to seek out and bind to a tumor antigen cell, then release a cytotoxin “warhead” that kills it. Interest in this field is strong mainly because the concept – and the emerging science behind it – promises to upend the scattershot response of conventional drug therapy against the relentless proliferation of mutant cells that cause cancer. According to Informa Pharma Intelligence’s Medtrack, three of the top 10 partnering deals in 2016 focused on the antibody space: a $3 billion deal between Merus NV and Incyte Corp. for a bispecific antibody platform for cancer; Celgene Corp.’s $2.5 billion deal with Jounce Therapeutics Inc. to access JTX-2011, an mAb investigational compound for cancer; and invivo.pharmamedtechbi.com

Shutterstock: extender_01

Cancer’s Next-Gen Smart Bomb: Who Will Be First To Weaponize?

Novartis AG’s acquisition from Xencor Inc. of another antibody platform, again, for cancer, at $2.6 billion. More important, some 70 ADC compounds are presently in clinical trials, according to Pharma Intelligence’s Trialtrove, mostly in the early test phases and involving six of the big pharma top 10, including Roche, the early leader in the field. (See Exhibit 1).

Pint-Size Potential However, some of the most significant work on ADCs is underway in the smaller biotech segment. While Roche and Seattle Genetics are seeking to build on their first-to-market breakthroughs, two small California-based biotechs – privately held Sutro Biopharma Inc., founded in 2004, and Ambrx Inc., established in 2003 and now owned by a consortium of leading Chinese pharma players – are pursuing a variant path to enhance the effectiveness of ADC therapy in the indi-

vidual patient. Their approach centers on creating a stable, chemically homogenous and site-specific antibody warhead that dramatically increases the success rate in delivering that cytotoxic “payload” to the tumor cell target, precisely and at the fullest concentration that can be safely tolerated by the patient. It’s a thesis that, if realized in human trials, will refine and extend the clinical impact on tumor regression, in comparison with the current standard of care. Although the technology differs, both companies appear evenly matched in pipeline potential. Ambrx’s lead ADC, ARX788, targeting the HER2 gene mutation in breast cancer, is now in Phase I trials in Australia and New Zealand. It also has an approved IND from the FDA for a similar trial in the US, to start later this year, as well as a novel off-licensing deal with Chinese partner Zhejiang Medicine Co. Ltd. (ZMC) through which the latter

Exhibit 1

ADC Compounds In Clinical Trials PHASE SPONSOR

(N/A)

Roche AbbVie

Ambrx

I/II

II/III 1

III

ALL

Pfizer

1 3

Seattle Genetics

Bayer

ImmunoGen

9 4

Genmab

9 4

Celldex Therapeutics Astellas Pharma

2 2

Amgen

Biotest

Bristol-Myers Squibb

Immunomedics

Merck & Co.

Puma Biotechnology

1 1

Sanofi Totals

1 1

SOURCE: Trialtrove | Pharma Intelligence 2017

company

1 1

will coordinate a Chinese Phase I trial on ARX788, simultaneously with the one in the US. (Also see “Ambrx breaks deal mold with Zhejiang ADC alliance” - Scrip, June 18, 2013.) “We will initiate the Phase I US trial in September or October, involving a cohort of 50 patients for a duration of approximately one year,” Yong Hei, MD, chief medical officer for Ambrx, told In Vivo. “Depending on the results, we should be ready to commence to a Phase II trial by the end of 2018.” Hei also noted that the two trials in Australia and New Zealand on ARX788 are progressing well. “We’re optimistic that data from the trials will be available by mid-year 2018, perhaps along with some preliminary feedback on the US trial.” Sutro has no candidate in trials as yet, but it expects to obtain INDs from the FDA for two ADC products within the next 12 to 18 months. First is STRO-001, an ADC that targets the protein CD74 associated with B-cell malignancies that cause non-Hodgkin’s lymphoma and multiple myeloma. The second, STRO-002, targets the overexpression of the folate receptor alpha protein found in ovarian cancer and other solid tumors. Last month, at the annual meeting of the American Association for Cancer Research, Sutro announced results of an animal study on STRO-001 demonstrating potent antitumor activity against multiple myeloma, diffuse large B-cell lymphoma and mantle cell lymphoma models while reducing the potential for toxic secondary effects on adjacent healthy cells – a nearly ideal outcome for an ADC, albeit in mice. In anticipation of future market commercialization, Sutro in March 2016 recruited two industry veterans to progress the company’s late-stage efforts on ADCs: former Johnson & Johnson oncologist Arturo Molina, MD, as chief medical officer; and Mark Lupher, PhD, in a new position as VP for translational pharmacology and preclinical development. In addition, Joseph Lobacki, former chief commercial officer of Medivation as well as lead manager for Genzyme’s global hematology business, was elected to Sutro’s board of directors last month. Beyond these new leadership hires, Sutro has an exclusive claim to operating the world’s only cell-free cGMP

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ONCOLOGY: Innovation ❚

❚ ONCOLOGY: Innovation manufacturing facility that eliminates reliance on complex, hard to replicate cultures of living cells in building an ADC arsenal. The patented process relies on transcripted material drawn from Escherichia coli bacteria to accelerate the speed and efficiency of a cell-free extract and protein base used to build an ADC; the time cycle for this process can be as short as 12 hours.

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Big Pharma Connections In addition, both companies can call on strong partnering links that carry differentiating advantages in geographic market reach. Sutro’s long-standing ties to Celgene, which began in 2012 and expanded into a formal strategic collaboration agreement in October 2014, gives it access to one of the industry’s strongest oncology sales and marketing networks.The two companies are currently advancing seven out of a total of 15 research and preclinical programs on multi-specific antibodies and ADCs. Sutro is responsible for early-stage research and preclinical development activities as well as the manufacturing of preclinical product candidates, whereas Celgene is responsible for global commercialization and, in that regard, holds or can acquire worldwide rights to market all products that stem directly from the collaboration. The 2014 agreement burnishes the biotech’s bona fides by including an option for Celgene to acquire Sutro – that right expires in September but is subject to renewal through March 2019 if Celgene decides by September to request it. If Celgene opts not to acquire the company by the end of this period, US commercial rights for an unspecified number of the collaboration’s projects will revert to Sutro. It’s no surprise that this is when the evidence will be in hand as to the clinical potential of the STRO-001 and -002 ADC candidates. Likewise, Ambrx, with its new owners, is poised to achieve a “world class standard” for ADC products in China, across a range of therapies. These owners, which include the Shanghai Fosun Pharmaceutical Group Co. Ltd. and WuXi PharmaTech Inc., carry marquee status in navigating China’s complex, politicized regulatory environment.With additional field-based support from ZMC, In Vivo | May 2017

Ambrx’s Chinese partner on ARX788, these ties give company management better insights on how to build an ADC franchise not only in the world’s second largest drug market, but in other emerging middle-income countries as well. Supply chain logistics and manufacturing expertise are just a few of the capabilities these Chinese partners bring to the table. (Also see “Ambrx Looks Across Pacific For A Secure Future” - Scrip, May 26, 2015.) “China lags in medicines innovation and knows that currently the world has only two ADC anti-cancer products available, at a time when the technology behind this novel precision medicine platform is rapidly improving,” Ambrx CMO Hei said. “The Chinese regulatory authorities have been constructive in approving trials on ADC products – Roche already has a China trial underway on Kadcyla, its first-generation ADC product. Our partnership with ZMC on ARX788 complements these efforts, where we can see ARX788 being positioned in China not as a third-in-line treatment, but as potentially first-in-line.”

Technology Boost For Target Delivery Kadcyla and Adcentris have had some success therapeutically with patients. Nevertheless, creating an ADC with a payload for accurate delivery to the tumor is complex, time-consuming and cumbersome against the infinite variations in tumor cell patterns – there is a “hit or miss” aspect to these first-generation technologies. Reports indicate that under current therapy, only about 1% of a systemic cytotoxic dose actually penetrates the tumor cell – obviously, that’s a number that bears improving. And there is the need to develop living cell cultures to construct the ADC, which can take weeks or months, as well as to keep the constituent parts of the antibody stable in the bloodstream, ready to link seamlessly once they bind to the protein target on the surface of the tumor cell and insert the cytotoxin. This requires enormous precision in customizing an antibody capable of linking to the site, recognizing the tumor antigen, binding to it and ensuring the cytotoxin has sufficient potency to penetrate tumor cell defenses.

Drug design has thus centered on loading the antibody warhead with the molecular equivalent of multiple shots on target, using an assortment of different ADC molecules to maximize tumor kill potential. Unfortunately, that conventional approach has led to persistent drug efficacy issues like breakdown or partial impairment of the cytotoxin prior to reaching the tumor cell. This leaves the cancerous mutation unscathed along with dangerous side effects in patients when the cytotoxin is expressed not at the tumor site, but in the bloodstream or in otherwise healthy tissue. And the amount of cytotoxin delivered may be subpar, enabling tumor cells to develop resistance. The point is when the dose does not find its target, the desired therapeutic result – cancer regression at lower patient exposure to toxicities – is not achieved.

Do The Biotechs Have The Edge? The good news is the science behind ADC is progressing. Rival biotechs Sutro and Ambrx contend their “third generation” technologies promise to boost the reliability of target delivery, providing a better patient experience and a superior clinical outcome. Here’s how they do it. Sutro’s innovative step is twofold. First, it has introduced an artificial cell generation production technology that can be used interchangeably with different DNA strands to speed the assembly of ADCs, at lower cost, rather than replicating living cells on a one-time basis. Second, by enhancing the accuracy and stability of an ADC in delivering its cytotoxin payload directly to the tumor cell target, it improves the prospect for a safer and more clinically efficacious outcome for patients. In a recent interview with In Vivo, Sutro CEO William Newell said, “For years, we’ve advocated that homogenous ADCs based on site-specific conjugation will improve efficacy and reduce toxicity to cancer patients. Many pharmaceutical companies have now come to adopt this view and they use different technologies to attempt to achieve it. What we’ve proven preclinically is that this is necessary but not sufficient to maximize the therapeutic index – the ratio between efficacy and toxicity – for an ADC. To do that, you invivo.pharmamedtechbi.com

have to select the optimal site (or sites) for attachment of a preferred linker and the cytotoxin. We believe Sutro’s Xpress CF+ platform technology is uniquely suited to do this, as we can access any site in an antibody as a place for the payload attachment – and we can do it all in only a few weeks, much faster than the norm with conventional discovery approaches. We can thus determine, by direct observation of a patient’s tumor profile, which site or sites are optimal. No one else in the industry can do that.” (See online-only sidebar, “Q&A With Sutro’s Bill Newell.) Ambrx is pursuing the same end as Sutro, but with a structurally different approach focused on a process that replaces the amino acid in the cell protein with a non-natural variant of the amino acid. This facilitates the site-specific conjugation of a more concentrated toxin to attach to the tumor cell and kill it. “The Ambrx approach is radically homogenous,” said Chief Medical Officer Hei. “We have devised a technology hook that produces the necessary chemical reaction with the toxin without diversion into non-cancerous cell groups, translating into a better efficacy and safety profile for the patient.” Hei also noted that the first-generation technology used by Roche and Seattle Genetics relies on a mixture of cytotoxins – as many as six – that tend to dilute the potency of the overall dose. “To us, homogenous is a synonym for concentrated; our model requires no more than two cytotoxins per warhead. And, in contrast to Sutro, our antibody is a natural antibody, generated from living cells. We think this promotes greater efficacy and tolerability for use in the human population.”

A Look Forward There are two subtexts to these confident assessments of the therapeutic potential of next-generation ADCs. The first is that advancing targeted drug delivery while fighting the endless adaptability of a cancerous cell remains a daunting – some might say quixotic – task. Given the overall poor tumor penetration rates from the two ADCs in current use, any improvement must progress from a modest starting point. Literally, there is no place to go but up. How far and how fast pose contrasting implications for the

READ MORE ONLINE Q&A With Sutro’s Bill Newell Sutro Biopharma’s most visible advocate is CEO Bill Newell, 58, who has led the company since January 2009 – almost an eternity in the unpredictable culture of the startup enterprise. This has helped ensure Sutro is well financed and prominently positioned for the external partnerships that will build a market for the company’s complex proprietary technology and boost the accuracy and potency of drug delivery in destroying cancerous tumor cells, with minimum impact on patient well-being. In our online-only interview, Newell discusses the progress of Sutro’s commercialization programs on ADCs as well as lessons on leading a small biotech in a crowded competitive field of big pharma players.

http://bit.ly/2qP2Wmb

future health of cancer patients, ranging from life-threatening side effects to full tumor regression. The second is that the ADC space is competitive and crowded, with nearly 20 different platforms to deliver that lethal warhead in various stages of testing. All told, more than 40 pharma and biotech companies are engaged in next-generation ADC development, along with a variety of public and academic institutions, including the Scripps Research Institute, the National Cancer Institute, the University of Georgia, the University of California, Davis and University College London. “ADCs have clearly attracted the attention of Wall Street,” Les Fundleyder, portfolio manager for E Squared Capital Management, told In Vivo. “We are seeing an increase in transactions, which does suggest some third-party validation of the potential of the clinical class presently under development.” As is the case in cancer treatment generally, scrutiny among payers on pricing is growing, so it is to be expected that new ADC regimens now in development will face market access issues based on comparisons against the current state of practice. A clear, clinically measurable advantage must be demonstrated around important oncology indicators like progression-free survival, backed up by evidence. In this regard, the therapeutic index – balancing efficacy with tolerability – will be determinative in establishing an appropriate P&R rate. There are opportunities from the new science as well. These include the application of ADCs to other conditions beyond cancer, terrain that has been only lightly explored by big pharma to date. There is also promise in replacing or combining the toxic chemotherapy drugs as ADC “weapons of choice” with the checkpoint inhibitor immunotherapies that, in active clinical use, have brought virtual cures to some cancer patients. This would deliver a superior dose to combat the cancer while minimizing adverse effects on the patient. Likewise, new weapons in the ADC arsenal will discourage the onset of tumor resistance, the Achilles’ heel in all cancer drug therapies. IV005100

Comments: Email the author: William.Looney@Informa.com May 2017 | In Vivo

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ONCOLOGY: Innovation ❚

❚ ONCOLOGY: Leadership

With A New CSO, Bristol-Myers Squibb Doubles Down On Immuno-Oncology BMS’ strategy for the complex, highly competitive immunooncology field.

BMS

A Q&A with the company’s new R&D chief, lung cancer specialist Thomas Lynch, MD.

BY MARC WORTMAN Bristol-Myers Squibb led in the exploding field of immuno-oncology, but when the data for Opdivo in NSCLC came up short and Merck’s competing IO agent, Keytruda, won speedy approval for first-line use in NSCLC, some declared game over.

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However, with the widest IO pipeline in the industry, BMS has doubled down on its IO strengths, turning to Thomas Lynch, a lung cancer specialist, to head its global R&D operations. So what? Lynch must guide the industry’s deepest IO pipeline to deliver some victories over the next year and mobilize his scientists to figure out the complex tumor biology that holds the key to IO moving the needle toward cures for NSCLC and other still intractable solid tumor cancers.

In Vivo | May 2017

ristol-Myers Squibb Co.’s former chief scientific officer and EVP, Francis Cuss, MD, was cursed by good luck. In 2015, BMS won the first-ever approval for an immuno-oncology (IO) agent to treat a form of lung cancer. The PD-L1 checkpoint inhibitor Opdivo (nivolumab) swiftly became a blockbuster as a treatment for squamous cell non-small cell lung cancer (NSCLC) as a second-line therapy. In short order, BMS gained 10 more approvals for the drug. But all eyes were on CheckMate-026, the late-stage test of Opdivo as a first-line NSCLC treatment, by far the largest unmet need in any cancer. Before study data came out last summer, some even used the “cure” word. Based on projected peak sales of the drug approaching $14 billion annually, BMS’ valuation soared. But it was not to be – at least not yet – and it wasn’t long before Cuss left after just three years on the job. CheckMate-026 failed to meet any of its key endpoints. BMS lost the race to have the first-approved first-line IO drug shortly after that when Merck & Co. Inc.’s competing Keytruda (pembrolizumab) gained quick approval. Although Keytruda’s approval was limited to the smaller segment of high (greater than 50%) PDL-1 expressers in NSCLC, in oncology the first-mover advantage has historically been key and Merck is now seeking to expand and extend its drug’s indications. More bad news for BMS followed on January 19: the company announced that it would not pursue an accelerated regulatory filing for the combo therapy of Opdivo plus Yervoy (ipilimumab), an anti-CTLA-4 antibody, in 1L NSCLC, on which analysts had pinned high hopes. Some questioned BMS’ entire IO strategy, which still depends on leveraging the two approved agents as backbones for combination treatments – IO plus IO, IO plus chemotherapy and IO plus targeted drugs – in multiple tumor types. In total BMS lost a third of its market cap, a phenomenal decline for a big pharma. Once regarded as the most effective drug development engine among the industry’s big pharmas, rumors of a possible buyout grew as activist investors Carl Icahn and JANA Partners bought up large numbers of shares. Hoping to get its mojo back, BMS invivo.pharmamedtechbi.com

hired Thomas Lynch, MD, a BMS director, lung cancer oncologist and health care executive, in March 2017, to replace the retiring Cuss. With Lynch’s appointment, BMS was doubling down on its bet that, despite the setbacks, its Opdivo and Yervoy backbones could return the company to leadership in multiple oncology indications, and, most significantly, get it back into the very competitive race to become an NSCLC first-line therapy. And indeed, BMS reported that Opdivo revenue for 2017 Q1 grew 60% and Yervoy jumped 25% over the same quarter the year before. Both are cash machines. Lynch has run both large clinical and research organizations, though he has not worked previously in the biopharma industry. He was most recently chairman and chief executive officer of Massachusetts General Physicians Organization and a member of the MGH board from 2015 to 2017. Before that he served as director of the Yale Cancer Center from 2009 to 2015. Prior to 2009, he was a professor of medicine at Harvard Medical School and chief of hematology/oncology at MGH. While at MGH in 2004, he was part of the team credited with the discovery of the first targeted therapy breakthrough in lung cancer for patients with EGFR mutations. The investigators found that tyrosine kinase inhibitors melted away certain treated cancers. The work showed that the agents used were effective for some patients and not for others, based on their tumor’s genetic makeup. He now has taken over a behemoth R&D organization that invested $4.9 billion last year in multiple research centers, with around 6,000 employees in sites scattered from Bangalore to Redwood City and from Rueil-Malmaison, France, to several in New Jersey. Following an industry trend to concentrate research in leading bioscience clusters, BMS will consolidate some sites and open a major new one next year in Cambridge, MA. The company has also been a leader in externalizing its R&D, with many alliances with academia and biotech. While BMS possesses a pipeline in cardiology, fibrosis and other immune disease, the company has jettisoned several large programs, in diabetes, neuroscience and hepatitis C, to focus on its 21 oncology compounds in various stages of clinical development. When Lynch spoke to In Vivo from his office in New Jersey, he remarked that he was looking at a snapshot chart detailing the trials’ status. Those 80-odd studies – as monotherapies, in combinations, with external collaborators such as CytomX Therapeutics Inc., which possesses masking technology to reduce adverse effects of the IO agents, and against different tumor types – include 15 involving Opdivo and/or Yervoy that will report out within the next year or so alone. (See Exhibit 1.) Jeffrey M. Bockman, PhD, SVP, oncology practice head at the consultancy Defined Health Inc., says, “They have deployed the widest net internally and externally to pursue combinatorial optionality.” In other words, the company is betting big that its many studies of different IO drug combinations will put it back into the race to dominate the space. However, BMS faces the reality that mouse models and even early data in very sick patient populations may not prove out in larger pivotal studies. In particular, toxicity issues for Yervoy have held the drug back. “It’s an empirical world. BMS is placing multiple bets,” Bockman states. The company is not alone in the race for the IO gold. “It’s turn©2017 Informa Business Information, Inc., an Informa company

ing into a classic pharma battle,” says Bockman, with Merck, AstraZeneca PLC, Roche, Novartis AG, Sanofi and many other biotechs testing their own IO targeting antibodies and combinations. “In oncology, first-in-class has typically dominated, and going forward efficacious and well-tolerated first-in-combination regimens will likely also be dominant.” That reality lies behind BMS’ doubling-down on its IO trial pipeline. Lynch believes that at the end of the day, combinations of multiple of drugs – he says perhaps as many as five combined into a single cancer-killing cocktail – will ultimately be needed to produce durable outcomes for cancer patients. However, figuring out which drug or combination of drugs will work will require huge numbers of costly, large-scale studies in a wide variety of tumor types. As the CheckMate-026 debacle demonstrated, nothing can be taken for granted. For now, Lynch believes that, despite the setbacks, BMS remains well positioned for a future he hopes will one day put his former cancer center and others out of business. In Vivo: How does your new role fit with your past experience and does it represent a strategic shift for the company in immuno-oncology or otherwise? Thomas Lynch: I think that my appointment represents a natural progression for a company like Bristol-Myers Squibb. I bring to the table several areas that I feel passionately about. The first is as a doctor, I have taken care of thousands of patients with lung cancer. Second, I understand the perspective of doctors and I understand the perspective of the patient. As the leader of the Yale Cancer Center, I had the opportunity to bring together teams of scientists and clinicians. And what strikes me is how similar this work is to my work at Yale. I’m basically assembling teams of highly qualified scientists and clinicians to approach a clinical problem. And that’s really what we did at Yale as well. And then, my experience at Mass General running the physicians’ organization exposed me to the marketplace of medicine. I did a lot of work with payers and understanding contracts and the concepts of population health. That experience drove home an understanding that society is really interested in the value that these medications can provide, that society really wants medicines that have meaningful impacts on patients and populations by prolonging survival and improving quality of life. Are you planning to make any significant organizational or personnel changes? When I got here, I was struck by the extraordinary talent and depth of the R&D organization, particularly in three areas. The first is in antibody technologies, understanding how antibodies work and how to make great antibodies. Second is in the science of immune-oncology. And then third is our great regulatory operation. As an example of that group, Bristol-Myers was able to get 11 approvals for the drug Opdivo in just two years, which is really record speed. Where do I think we need to add to that? I’m going to be looking to broaden our cancer biology experience as well as our understanding of fibrosis as driving mechanisms. I think it’s also important to say that Bristol-Myers Squibb has a great track record of partnering with academic institutions. We have the International Immuno-Oncology Network, which is May 2017 | In Vivo

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ONCOLOGY: Leadership ❚

❚ ONCOLOGY: Leadership Exhibit 1

Opdivo And Yervoy Trials Revealing Data In Next Two Years Tumor

Phase II

Phase III

Expected Timing*

Hepatocellular carcinoma

CM-459–Opdivo (1L)

2H 2017

Colon

CM-142–Opdivo (2/3L MSI High)

1H 2017

Glioblastoma

CM-548–Opdivo+SOC

1H 2018

CM-651–Opdivo+Yervoy (1L)

1H 2018 1H 2018

Head and Neck

CM-714–Opdivo+Yervoy (1L Extr. Inel)

Approved

Bladder

CM-275–Opdivo (2L)

Myeloma

CM-602–Opdivo+Elo+SOC

2H 2018

CM-331–Opdivo (2L) CM-451–Opdivo+Yervoy (1L)

1H 2018 1H 2018

CM-214–Opdivo+Yervoy (1L)

2H 2017

CM-511–Opdivo+Yervoy (1L) CM-238–Opdivo (Adjuvant)

1H 2017 2H 2018

CM-227–Opdivo+Yervoy (1L) IO, IO/IO, IO/chemo

1H 2018

CM-078–Opdivo (2L/Asia)*

1H 2018

Small cell lung Renal cell Melanoma

Non-small cell lung

CM-568–Opdivo+ Yervoy+Chemo (1L)

2H 2018-1H 2019

*Timing shown represents primary completion dates except 451, 214, and 651 which match JPM disclosures. SOURCE: BMS

a global peer-to-peer collaboration between us and academia. We’re also collaborating with the Parker Institute, with Sean Parker’s Institute on the West Coast, which brings together six outstanding academic medical centers to look specifically at immuno-oncology issues. (Also see “Bristol Teams Up With Billionaire-Backed Parker Institute On IO Research” - Scrip, March 28, 2017.) With this base I plan on deepening and broadening our cancer biology exposure in the next year or so. Ultimately, so many of the answers that we need to get are going to come from designing better biomarkers and better ways of understanding which patient populations are going to have the best benefit from these new approaches.

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Let’s consider the role of biomarkers going forward. Further analysis of the CheckMate-026 data presented at the AACR showed that giving the drug to patients with greater PD-L1 expression might not have improved outcomes, and that in fact tumor mutation burden seems to have been a more reliable predictor. Are we getting closer to having some biomarkers that can really both identify likely non-responders and, going forward, the people who are going to respond? Biomarkers are really just a way to understand tumor biology. They’re just a marker or an indicator of what the underlying tumor biology is. I think we’ve learned so far in lung cancer, for example, that there are a number of potential – and this is true of all of IO, actually, not just lung cancer, but all of IO – there’s a number of potential markers that may be very important. So for example, PD-L1 may be very important. TMB, total mutational burden, might be as well. Obviously, I’d just caution that the In Vivo | May 2017

TMB results that we presented at AACR are our first look, and we look forward to working with our investigators to examine greater numbers of samples to be able to see how predictive that could be. But looking at the inflammatory cell infiltrate within tumors and the immunologic profile of the intra-tumoral biology of the cancer also is likely going to be important. I think what’s clear is that one can argue that all of those three approaches may identify patient populations that are particularly likely to benefit, and also may identify patient populations that aren’t likely to benefit from our drugs. I was involved in the discovery of the EGFR mutation in lung cancer when I was at MGH in 2004. And one of the most important things that discovery showed us was that if you had an EGFR mutation, yes, you did better with a tyrosine kinase inhibitor. But probably equally important was finding that if you didn’t have one, that starting with chemotherapy was a better way to go. We’ll continue to search for the tumor biology in IO to figure out which patients need single-agent IO, which benefit from combinations, which do better to start with the chemotherapy base. My hope is the next 12 to 24 months will give us greater clarity on this. It is becoming exceedingly complex to manage a big pipeline of IO monotherapies and combination therapies. How do you create themes and an overall strategy rather than just throwing combinations together and seeing which ones stick? Is biomarker science so limited at this point that essentially what we have to do is put combinations together with the backbone, like nivolumab or ipilimumab, and just use industrial muscle to see what sticks? invivo.pharmamedtechbi.com

I’m sitting in my conference room right now looking at a chart that has the 21 oncology compounds that we’re developing on the board. And what I can tell you is that the amount of time it would take if we just empirically combined them would exceed certainly your career, my career, and most of your readers’ careers. So rote, brute force just won’t get us there. We’re going to have to become more intelligent about how we put these drugs together and how we look for opportunities to combine the best IO drugs, as well as IO with chemo and also IO with targeted drugs. We need a rational approach to this. Data and analytics are going to play a larger role in the concept of rational combination design. How do we put these combinations together to give patients the best chance of cure? And I keep coming back to a disease like lymphoma. We cure the majority of patients who present with lymphoma by combining five important drugs. I think it’s hard for us to imagine that we’re going to cure lung or colon or breast cancer without thinking about combinations of similar magnitude in these diseases. So how does one put together five IO agents to be able to treat cancer? The first question is, Will toxicity patterns allow that to happen? That’s unknown. The second is, What’s the regulatory pathway? A five-drug IO combination would take 30 years to achieve approval in the way that drugs are developed now. How do we think about innovation in regulation to allow drugs to be developed quicker? This is a concern that’s shared by everyone in the industry, including at the FDA and the NIH. They want to advance cures quicker to patients. So I think collaboration will be important. Let’s talk about a couple of combination trials in NSCLC that are underway and may report out before long. Do you think you’ll be able to file for first-line therapy based on CheckMate-568 or -227 in the next 12 months? We just don’t know what those trials are going to tell us. We’ll look at the data and see what they show us in terms of guiding us in developing these drugs. I think one thing that’s important to say from my perspective is that we have a very broad program in lung cancer. It’s not just a couple of trials. But it really is a program to determine the best ways to use the IO drugs that we have right now in lung cancer. At the same time, as I noted, we are aggressively pursuing IO-IO combinations, IO-chemo combinations, IO combinations with targeted agents and then also the next-generation combinations. It seems like you’ve been announcing either new collaborations or upping collaborations almost on a weekly basis. Talk about your strategic needs for acquiring or partnering early-stage compounds or platforms. Obviously we can’t comment on any specific BD potential that’s out there. This is a remarkably competitive space, the world of cancer drugs and particularly the world of IO. (Also see “Combinations Continue To Drive Immuno-Oncology Deal-making” this issue.) I think that is spurring all of the industry to work hard to build collaborations to look at how we can take early assets and move them farther into development. And I think it’s led to looking very carefully at some of the work that’s coming out of small biotechs for potential partnering opportunities. I think it’s exactly what patients ask us to do. They want combinations brought forward to help cure cancers. And that’s our mission at this point. ©2017 Informa Business Information, Inc., an Informa company

Tell us about BMS’ recent high-value extension of the CytomX relationship to as many as eight additional targets. Can you share some of your thinking behind that deal? The CytomX deal is a broad relationship for use of their Probody technology, which allows us to potentially make drugs that we have more specific to cancer cells and less toxic to patients. We have advanced one Probody therapeutic based on ipilimumab, our CTLA-4 checkpoint inhibitor, and we hope to have the go-ahead to begin clinical testing shortly. Our data in melanoma [CheckMate-067] that we presented at AACR was the first to show that a combination of two IO agents can prolong survival and showed that there was a survival advantage to the combination. And so we do think that ipilimumab is an important IO drug and CTLA-4 is an important target that we are continuing and expanding our study of through our access to CytomX’s Probody technology. How do you perceive the payer environment for combination agents? When you talk about putting potentially five agents together, these combination cocktails, for dealing with complex disease, and having to potentially use them in a chronic way, how are payers going to be able to afford that? What you highlight is that we’re going to have to show that the combinations we put together improve survival and reduce side effects and improve quality of life for patients as we move forward. If you’re able to show that you can improve outcomes, then the market is willing to pay a premium for specific agents. We’ve seen examples in some infectious diseases like HIV and hepatitis. I hope we will have that opportunity in cancer to put together effective combinations, and then address how we create products that are affordable in the marketplace, because obviously we’ve got to do that as well, or we won’t serve our mission of curing cancer. Is cure the endgame? Or is it a more realistic expectation that resistance is part and parcel of this new landscape of immunotherapeutics, and that the more realistic outcome is a chronic disease that’s treated and retreated over an extended lifetime? I really do believe that the reason we’re doing this is to cure cancers, to remove the burden of cancer from our society. Important steps along that way involve prolonging survival in a meaningful way with good quality of life. If you look at diseases like chronic myelogenous leukemia, where the tyrosine kinase inhibitors have made a huge difference, and even though they may not be curing everybody with CML, people are living normal lifespans and with good quality of life. That’s an important endpoint. But we put as much energy and focus into research to cure diseases like cancer. People are in this because they’re motivated by that. And I can tell you, as a physician, when you’re sitting across from a patient newly diagnosed with cancer, that’s what they want. They want to know, Doc, can I beat this? Not can I improve my survival by X percentage points, not can I improve the Kaplan-Meier curve, and really not what is my toxicity profile? They want to know, can I beat this? IV005088 Comments: Email the editor: Nancy.Dvorin@Informa.com May 2017 | In Vivo

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ONCOLOGY: Leadership ❚