Will ATNX stock price pop if Oraxol gets approved?
ATNX's oraxol has shown some pretty good data in metastatic breast cancer. And oral paclitaxel vs. IV paclitaxel seems to have some patient convenience advantage. However, the stock has not responded well to the oraxol metastatic breast cancer data readouts. The next step for ATNX for oraxol, is filing an NDA for FDA approval, after which as long as their submission is accepted, they will receive a PDUFA date. Will the stock respond with a nice pop upon a possible future FDA approval of oraxol in metastatic breast cancer based on its clinical data?
Our opinion is NO.
First, if you want to see the prior data and the label data for paclitaxel, check out our oraxol/breast cancer info card here: https://www.ampbioresearch.com/data/ATNX/Oraxol/Metastatic-Breast-Cancer-
We like ATNX because of its orascovery technology long term, but we don't expect the stock to pop much if oraxol gets FDA approved. Why? Because it appears that the market is assigning most of the risk of oraxol to commercial success, not regulatory success. For an understanding of these 2 risk factors, check out my QuickEd video here: https://www.ampbioresearch.com/biopharma-forum/biotech-stock-education/3-risks-that-drive-biotech-stock-price. We can see that the market does not assign a high price movement score in options prices as seen with the relatively low 24% volatility score, at our least reading, which can be seen our ATNX company page and/or drug/indication page on Amp.
Why do we feel that the market is assigning mostly commercial and not regulatory risk: Because of the lack of significant positive stock movement on its phase 3 clinical trial results, which demonstrated safety and efficacy that should be more than adequate for FDA approval. In fact, it was impressive to see an overall survival improvement over the paclitaxel control of 27.9 months vs. 16.9 months (P.0353) on their modified intent to treat population at the last time point, which is still ongoing and could improve even further. However, that trial was performed with the FDA approved chemo for metastatic breast cancer (IV Paclitaxel FDA-approved schedule for mBC2,3: 175 mg/m2 Q 3 weeks), which is not the current standard of care (IV Paclitaxel US clinical practice : 80 mg/m2 IV Q week (varies by site, Q 3-4 weeks) (noted by ATNX in slide 10 of its 2019 Breast Cancer meeting presentation citing NCCN Guidelines), and confirmed by the panelists at the ATNX event at that meeting. Plus, there is another improved version of paclitaxel, Abraxane, which in some studies has shown superior results to paclitaxel (see Abraxane package insert data) and has a shorter 30 minute infusion time.
Finally, the efficacy and safety data for oraxol in mestastatic breast cancer in sum has not looked so much better than the inferior paclitaxel regimen control arm, that is has derisked commercial success very much to most investors. If you follow the ATNX stock chart (see below) you see the drop in Aug 2019 on the initial phase 3 top-line readout, the promise on the San Antonio abstract popping the stock in mid-November, only to have it pull back most of those gains when the detailed data was presented in San Antonio in December 2019.
We're still digging up the current weekly paclitaxel standard of care paclitaxel metastatic breast cancer clinical trial data (there are a lot of paclitaxel studies/publications), but trying to do cross-trial comparisons in this setting makes your head spin. There are inconsistencies between trials, likely because of differences in patient populations. See this comparison table for example for example.
Even ATNX's experts at its December event at the San Antonio breast meeting cautioned an analyst against trying to make too much of the efficacy data for oraxol. However, from within trial data, some conclusions can be meade: It appears that oraxol provides a decrease in neuropathy and alopecia (hair loss) vs. paclitaxel and likely vs. Abraxane, but causes more neutropenia than abraxane, and more gastrointestinal issues than paclitaxel. The neuropathy decrease might even be more pronounced for oraxol vs. standard of care weekly paclitaxel because at least one large paclitaxel trial, although in the adjuvant setting, showed that weekly paclitaxel had increased neuropathy vs. paclitaxel every 3 weeks. In sum, we think eventually oraxol will have some commercial success mainly because of the decreased neuropathy, which we believe is more of an issue for patients and physicians than neutropenia, where Abraxane is better. However, we are not MDs and plan to confirm this with some of our MD friends. We don't know how much the oral convenience (there are a lot of pills to take in this regimen, which is not so convenient) vs. the quick 30 minute infusion time for Abraxane will matter to patients. Finally, a wild card will be if the overall survival data for oraxol in metastatic breast cancer separates even more from the control with more time.
Another risk to consider is that even with the solid safety and efficacy data in its phase 3 trial, there is still CMC risk related to manufacturing and quality control with the FDA submission. To learn more about this risk, watch my Amp ed video on this topic. This is a particular risk to pay attention to in this situation because this is the first orascovery product that will be submitted for regulatory approval. Are the manufacturing sites and quality control procedures up to the FDA's standards?
As far as ATNX in general, we think their apparent plans to commercialize oraxol on their own in the U.S., and their fairly complex business that is based overseas and outside the U.S. biotech hubs, works against the company. There is little valuation premium here for a possible M&A because of the company's self-commercializing U.S. strategy. However, the decreased neuropathy possibly combined with oral convenience and possible overall survival data, should provide enough for commercialization success eventually. It will be interesting to see the orascovery platform now with other chemotherapeutics and other indications because the oraxol breast cancer data has provided us quite a bit of derisking for this platform technology as far as efficacy in humans. There is also the Tirbanibulin ointment's possible 2020 approval as well, which is beyond the scope of this article. And many other orascovery compound clinical trials ongoing, although we are not certain which of those might read out in 2020 at this point (See our AMP ATNX company page for a list of those trials).
As far as a possible near-term dilution event (See our education video on this topic), ATNX ended Q3 with about $103 in cash/equivalents and burns about $35M per quarter. However, ATNX raised about $90 million in a follow-on offering and up-front licensing deal in Q4. Thus, ATNX appears to have at least cash for a year and shouldn't need to dilute investors at least in the first half of 2020.
In sum, we are bulls for ATNX in the long run because of the orascovery platform and the derisking oraxol human breast cancer data. However, we don't think we will find a short-term home run here unless we get a pleasant surprise with overall survival data in the metastatic breast cancer setting looks even better over time, or from a readout of one of their Phase 2 trials.
What are your thoughts? Let us know.
Dominic Vacchiano and Manny Vacchiano
#ATNX, #Oraxol, #paclitaxel, #NDA