The Cross-Border Biotech Blog

Biotechnology, Health and Business in Canada, the United States and Worldwide

Valuation and other biotech mysteries – Part 5: More strategy and structure for Phase 3 clinical trials

[Ed. This is the fifth part in Wayne’s series. You can access the whole thing by clicking here. Please leave comments or questions on the blog and Wayne will address them in future posts in this series.]

In the previous case study, we looked back at Theratechnologies and theFDA approval of EGRIFTA™ (tesamorelin for injection). Now let’s look at a product still in Phase 3, REOLYSIN®, a formulation of the reovirus being developed for the treatment of cancer by Oncolytics Biotech (TSX:ONC)(NASDAQ:ONCY).

Oncolytics has started a Phase 3 clinical trial using intravenous administration of REOLYSIN in combination with paclitaxel and carboplatin to treat platinum-refractory squamous cell carcinoma of the head and neck. The trial structure and data analysis was the subject of an SPA agreement with the U.S. FDA.

Oncolytics publishes a chart that shows all the clinical trials using REOLYSIN, which currently includes 22 clinical trials managed by the company and 6 which are being managed by the U.S. National Cancer Institute (NCI). The list includes different routes of REOLYSIN administration, monotherapy and combination therapy trials, and several different types of cancer.

The first three trials looked at the use of REOLYSIN as a monotherapy delivered via local administration. However, starting with REO 004, nearly all trials looked at intravenous administration, indicating that this would likely be the commercial route of administration (systemic delivery to treat a disease that spreads throughout the body). Starting with REO 009, most trials were looking at combinations of intravenous REOLYSIN with various chemotherapy regimens, with paclitaxel and carboplatin being the most commonly used. Oncolytics started Phase 2 trials in both the U.K. (May 2008) and the U.S. (June 2008) for only one type of cancer, advanced head and neck cancers. The SPA for the Phase 3 trial was announced in October 2009. At this point, you should ask the same questions which we outlined in Part 4 of this blog series.

If you looked at REOLYSIN in 2000 when the first clinical trial was started, you could not predict what the path to regulatory approval would be. As new clinical trials were started as outlined above, and as new clinical data was released, you could make progressively better predictions about the Phase 3 trial structure prior to that announcement in October 2009. Every time a new clinical trial is started, you need to ask the following questions.

  • Does the new trial involve major changes in drug formulation, dose, treatment regimen or the patient characteristics?
  • If the trial data is positive, does it reinforce the previously-defined the path forward or define an alternative path forward?

These questions relate to the path to regulatory approval. There are another series of questions related to risk assessment which would also be asked as each clinical trial is announced and when the clinical data is available.

The purpose behind Parts 4 and 5 of this blog was to outline paths to regulatory approval as a component of the valuation of a product. In addition to knowing the pathway and some aspects of the timing, we need to look at the actual costs of progressing along this pathway. In the next blog, we will look at the cash burned by Theratechnologies and Oncolytics as they moved their products along the clinical pathway.

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