Biotech General Discussion

APTO is presenting data at EHA 2020 for their BTK and FLT-3 inhibitor CG-806 at EHA. We don't expect there to be much of a move up in APTO stock price with this data presentation. The stock ran up well around ASH 2019 and then in 2020 along with the broader smid-cap biopharma run. APTO clarified that there will not be tumor burden shrinkage in the EHA data, and the company has a $600M market cap, which is not cheap for a company with no clinical tumor efficacy data.

The obvious parallels to ARQL 531 and LOXO's reversible BTK inhibitor have us and the market excited, as both companies were acquired at healthy premiums. The challenge is trying to figure out whether this is a ARQL or LOXO stud or a dud, like SNSS’s SNS-062 appears to be thus far (SEE REVERSIBLE BTK INHIB CLINICAL DESIGN/RESULTS COMPARISON TABLE).

As you can see from the kinase maps, each of these kinases has different specificity (SEE KINASE MAP COMPARISON), although we have not yet been able to find a kinase map for SNS-062. Please comment below if you find one online.

From the IC50 data (SEE FIGURE BELOW), CG-806 doesn't have the potency of ARQL 531, but

neither does LOXO-305, and it has performed very well in the clinic.

APTO's management has tried to manage expectations for the 806 EHA data. They feel it is too

early in the trial progression to expect tumor shrinkage activity. They feel that ASH 2020 will be

the first time they should see meaningful tumor shrinkage data.

Want to do your own diligence on 806? Check out our AmpCard on 806 in B cell malignancies

HERE.

We are intrigued by APTO because kinases data seems to translate pretty well from lab to clinic,

especially for proven targets, and 806 appears to have some interesting activity. However, SNS-

062 is a notable exception, showing that in vitro kinase data doesn't always translate into

clinical success. With the runup of APTO stock to the current $600M plus market cap, with no

clinical tumor shrinkage data, we take a relatively small APTO position into EHA. We would not

be surprised if the stock moves down some (10% or less) after EHA without tumor shrinkage

data. Of course, there could be a surprise up (tumor shrinkage) or down (safety signal), but

management has not hinted to either of those scenarios. As long as there are no safety warning

signals in the 806 EHA data, we will add to our APTO positions as we look for dips in the coming

months leading up to ASH in December.

Amp BioResearch team - Henry Chen and Manny Vacchiano

#APTO, #CG_806, #Cancer, #B_cell_cancer, #FLT3_BTK_Inhibitor, #EHA, #European_Hematology_Association