Loxo Edges Closer To Commercial Market With Larotrectinib, But Diagnostic Challenge Persists
Executive Summary
Loxo impressed at ASCO last year with larotrectinib, which has now been accepted by FDA for priority review with a PDUFA date of Nov. 26, and the oncology drug developer could shine again this year. If approved, however, larotrectinib could launch ahead of its companion diagnostic.
Loxo Oncology Inc. is ramping up to become a commercial-stage oncology company with the launch of the TRK inhibitor larotrectinib, which now is likely late this year or early in 2019. The company announced May 29 that US FDA has accepted its new drug application (NDA) for larotrectinib for the treatment of adult and pediatric patients with solid tumors harboring a neurotrophic tyrosine receptor kinase (NTRK) gene fusion. With priority review granted for the NDA, the agency's target action date is Nov. 26.
An approval would be the first for Loxo and push the Stamford, Conn.-based biopharma into the commercial stage. The firm is partnered on larotrectinib with Bayer AG through a deal unveiled in November under which Loxo gained $400m up front and held onto co-commercialization rights in the US. (Also see "Loxo’s Tissue-Agnostic Approach Brings $400m Upfront From Bayer" - Scrip, 14 Nov, 2017.) Loxo stands to receive an additional $1.15bn in milestone fees based on regulatory and commercial events, of which it expects to earn $275m in 2018 and $150m in 2019.
The successful approval and launch of larotrectinib will break new ground when it comes to cancer drug development. The drug selectively inhibits tropomyosin receptor kinase (TRK) fusion protein and represents one of the first attempts to target patients on a molecular basis rather than through traditional indications based on cancer location.
Research suggests that the NTRK genes can become abnormally fused to other genes, resulting in growth signals that can lead to cancer in many sites of the body, according to Loxo. Larotrectinib has a breakthrough therapy, rare pediatric disease and orphan drug designations from FDA.
The FDA approval of Merck & Co. Inc.'s PD-1 inhibitor Keytruda (pembrolizumab) for microsatellite instability-high or mismatch repair deficient solid tumors was the first time a drug was approved for a molecularly defined cancer, but it was based on retrospective data. (Also see "Biomarker-Led Claim Is Small Step For Merck's Keytruda, Giant Leap For Cancer Indications" - Pink Sheet, 23 May, 2017.) Lartrectinib could be the first novel drug prospectively developed and approved for a tissue-agnostic claim.
Loxo was one of the stars of the American Society of Clinical Oncology (ASCO) annual meeting in 2017, when the company released pivotal data from 55 patients treated with larotrectinib, with notable response rates in patients with TRK fusion mutations regardless of tumor type. (Also see "Loxo Sees Larotrectinib As Model Form Of Oncology Drug Development" - Pink Sheet, 5 Jun, 2017.) TRK fusion mutations are rare, but they are present in dozens of cancer types. They occur in about 0.5%-1% of many common cancers, but in some cases can occur in more than 90% of certain rare cancers like salivary gland cancer and infantile fibrosarcoma.
The company could be a headliner at this year's ASCO again with positive data for a different tissue-agnostic drug, the RET inhibitor LOXO-292. The abstract from a Phase I study to be presented at ASCO shows a 65% response rate in patients with non-small cell lung cancer and 83% response rate in patients with papillary thyroid cancer in the 32 patients with RET fusion-positive and RET-mutated cancers. (Also see "Other ASCO 2018 Highlights – It’s Not All IO " - Scrip, 17 May, 2018.) The company's stock has risen 20% since the ASCO abstracts were revealed.
Companion Diagnostic Test Gap Will Be A Challenge
The big challenge for Loxo and Bayer when it comes to launching larotrectinib will be finding the right patients to treat. It is something Loxo's management team – including founder and CEO Joshua Bilenker – has talked openly about for a long time. (Also see "Loxo's Larotrectinib Requires Paradigm-Change In Clinical Practice" - Scrip, 5 Jun, 2017.)
In April, Loxo announced a partnership with diagnostic developer Illumina Inc. a to develop and commercialize a multi-gene panel for broad tumor profiling that can be used as a companion diagnostic for larotrectinib with a pan-cancer indication. The partnership is focused on a version of Illumina's TruSight Tumor 170 as a companion diagnostic for larotrectinib and the RET inhibitor LOXO-292.
But an unresolved issue is that the test isn't likely to be approved within the same timeline as the drug. During Loxo's first quarter sales and earnings call May 8, Chief Business Officer Jacob van Naarden said there would be a gap in the approvals and that this would be one of the challenges with the launch. He said the company will update investors on the timeline for the development of the companion diagnostic once the work is under way.
In the meantime, physicians will need to rely on laboratory-developed tests (LDTs) for identifying patients with the mutations. That could be an obstacle to uptake given that many oncologists just now may be starting to hear about NTRK gene fusions.
The US Centers for Medicare and Medicaid Services issued a national coverage determination in March for next-generation sequencing that is expected to give patients broader access to the comprehensive screening tools. (Also see "Medicare Finalizes NGS Test Coverage For Advanced Cancers, Drops Evidence-Collection Provision" - Medtech Insight, 16 Mar, 2018.) Loxo said the CMS determination removes an important barrier for drugs such as larotrectinib.
Loxo and Bayer are in the midst of commercial launch planning, the biotech said. While they will share sales and profits 50/50, Bayer will take a larger operational role, in charge of spending strategy and drug pricing, Loxo added. The company is building out its own commercial infrastructure in a targeted way, and currently employs 90 full-time equivalents.
Bayer plans to file a marketing authorization application for larotrectinib in Europe later in 2018.