The CEO’s Blog — Garo H. Armen
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THE FUTURE FOR ONCOPHAGE AND FOR ANTIGENICS IN THE AFTERMATH OF THE EMEA NEGATIVE OPINION
In the wake of the EMEA rejection, questions have been raised regarding the future of Antigenics and Oncophage. That question should be answered first: The future prospects of Antigenics are sound and can even be characterized as bright. Careful management of our business is, of course, critical; specifically, we must decide how to best manage Oncophage going forward.
The simplest course for Antigenics might be to shut down the Oncophage program altogether and simply pursue the QS-21 vaccine adjuvant business. With ~ $30 million of cash at year-end and QS-21 presently profitable, without the burden of Oncophage expenses we could be well on our way to profitability with royalty income from QS-21 commencing within several years.
In spite of this we have chosen to maintain our commitment to Oncophage. This commitment is also inspired by the fact that qualified and highly accomplished experts share our conviction regarding Oncophage and its significant promise towards benefiting cancer patients. It is also worth noting that Oncophage and cancer vaccines in general, represent a completely new treatment paradigm which can change the way cancer is treated in the future.
Why then have we been declined registration by the EMEA at this time? We will address this and our planned path forward in some detail below, but suffice to say, our decision to pursue Oncophage has been and continues to be based on what we consider ethically and scientifically right.
Let us now discuss a path forward for Antigenics’ pipeline, including Oncophage. Below are five distinct areas of opportunity which we plan to explore and pursue as appropriate:
1) Our vaccine adjuvant, QS-21, is currently being used in 15 vaccine products in clinical development. QS-21 is presently a net generator of cash for us and consumes very few of Antigenics’ resources. Vaccines containing QS-21 have aggregate sales potential in the tens of billions, with royalties to Antigenics that could amount to many hundreds of millions. Royalty income from products containing QS-21 is likely to commence in a few years and continue for a period of at least 10 years.
2) AG-707 vaccine candidate for the treatment of genital herpes infection. We have recently completed analysis of results from a phase 1 trial of AG-707 (an off-the-shelf medicine) and expect to publish these results in a peer-reviewed journal in coming months. Subsequently, we intend to explore out-licensing of this product and possibly also of the Heat Shock Protein platform for infectious diseases, the basis for AG-707.
3) Resubmission of the Oncophage RCC file to EMEA. A potential resubmission rather than an appeal appears to be the best path forward for potential approval in Europe. In coming months we will study the situation further and determine the optimal timing for a potential resubmission. Our efforts towards mapping out a resubmission strategy will include discussions with regulatory representatives from a number of EU countries as well as the EMEA. As part of this we will also compile additional supportive clinical evidence (in the form of more analysis and possibly generation of more data). Conducting another 8-10 year trial as a path forward is not a realistic option.
4) Generating Oncophage revenues from commercial sales in Russia and Named Patient Programs in Europe and elsewhere. Over the next six months we will be exploring the possibility and the potential for generating revenues from Oncophage. We expect both the exploratory effort and the potential implementation of this activity to be largely undertaken by third parties with support provided by Antigenics primarily in the form of manufacturing services.
5) Exploring the development of Oncophage in other cancers as well as Oncophage in combination with other agents. We have been pursuing Oncophage development in investigator-sponsored trials in Glioma, in which we supply Oncophage but don’t incur trial-related costs. In coming months, we will determine the feasibility of expanding such investigator- and/or partnership-sponsored trials both in other cancers and in combination studies at minimal or no cost to Antigenics, beyond the costs related to maintaining and operating our manufacturing services related infrastructure. The principal objective of this effort would be to determine if Oncophage in combination with other agents achieves strong indication of benefit in patients with more advanced disease in order to support late-stage trials. In our previous trials in as many as 8 different cancers, Oncophage used alone in patients with advanced disease has shown signals of activity.
THE ROAD AHEAD
In the first six months of 2010, we will assess the probability and the determinants of success for each of the programs detailed above in bullets 2-5. We will define the next steps for each and decide on the implementation path independently and/or with partners or with other external resources. Clearly QS-21 does not require any expenditure and will consume minimal management resources. The next steps for AG-707 will require very modest expense and management time. Determining whether or not to re-file in Europe will consume some resources, though less than in the past year; this work will fall primarily to Antigenics and its advisors. Oncophage revenue generation efforts will continue with minimal burden on Antigenics anticipated. As for Oncophage development in other cancers and in combination with other agents, Antigenics will be responsible for developing the strategy, but external parties will be explored for financial support and resources.
In sum, this means we will be aiming to continue to reduce our net cash burn. The same will also be our target for 2011. Our objective is to stretch our cash resources through most of 2011, which is the approximate timeline when QS-21 royalties will have either started or become much more visible.
WHY DID THE EMEA RENDER A NEGATIVE OPINION ON ONCOPHAGE AT THIS TIME?
The results of our Phase 3 RCC trial have been discussed and reported on extensively, as have been the challenges of conducting trials in the adjuvant setting. To this end, we knew that the data from our Phase 3 RCC trial does not meet the “traditional standards” of product approval. For this reason, our decision to file for approval in the EU was influenced by the reformist attitude of the EMEA (the FDA counterpart in the EU), which resulted in the adaptation of the conditional approval allowance in 2006. After we determined that Oncophage for RCC qualified for filing under the conditional approval provision, we submitted our application in October 2008.
Clearly there were the obvious risks with filing under this provision because it was new and untested for our kind of challenge (I have discussed these challenges and associated risks during a teleconference in our previous quarterly update). Regardless, we decided to proceed with the EMEA filing because data from the trial suggested a very significant medical benefit in patients with earlier stages of renal cancer (patients who will face death upon relapse); and a substantial number of doctors treating these patients worldwide agreed.
After our filing and upon their initial review, the EMEA got back to us with a list of questions. Since then we have addressed a significant number of these outstanding items/questions. However, in the minds of our reviewers there were some important unresolved issues which prompted their negative opinion at this time. The main issues relate to proof of “clinical efficacy” emanating from the traditional bias against subset analysis. While we respect the reviewers’ decision we disagree with their conclusions. Based on scientific and biological grounds, we along with a long list of prominent experts who treat these patients believe that such an analysis is substantiated and the results indicate significant clinical benefit (A discussion of Oncophage RCC and Melanoma phase 3 trials and a rationale for interpretation of the data has been published — see Srivastava et al. 2009. Expert Opin. Biol. Ther. 9:179-186.)
Regardless of the outcome, some good things have come out of our filing and the subsequent review and the decision by the EMEA. For one thing a number of important product related issues and ambiguities have been put to rest, some still remain but seem resolvable. Similarly any potential key safety issues also appeared to have been put to rest. So in summary we have clinical issues relating to the efficacy of Oncophage that need to be addressed; and we will spend some serious effort, over the next 6 months, to determine if they can be overcome without having to do another 8 to 10 year trial.
This communication contains forward-looking statements regarding Antigenics’ business and plans, including statements regarding Antigenics’ regulatory strategies. These forward-looking statements are based on management’s current expectations and are subject to risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties, include without limitation, opinions and decisions of regulatory authorities and existing and potential collaboration partners, clinical data results, the availability of resources, and the risk and uncertainties described in Antigenics’ SEC reports filed under the Securities Exchange Act of 1934, including those mentioned in the Risk Factors section of Antigenics’ Quarterly Report on Form 10Q for the quarter ended September 30, 2009. Antigenics cautions investors not to place considerable reliance on the forward-looking statements contained in this communication. These statements speak only as of the date of this document, and Antigenics undertakes no obligation to update or revise the statements. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. Antigenics’ business is subject to substantial risks and uncertainties, including those identified above. When evaluating Antigenics’ business and securities, investors should give careful consideration to these risks and uncertainties.
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