Hello Tykerb, goodbye Blog-X!

Congrats to GSK for the approval of Tykerb, another kinase targeting blockbuster, with predictions of up to $2.5B in peak sales. While some have undersold Tykerb as a late-comer to the HER-2+ market that Herceptin already dominates, this approval is important for additional reasons:

-Tykerb represents the first direct competition between a small-molecule (Tykerb) and an antibody (Herceptin). (If you're thinking Sutent & Nexavar vs. Avastin, remember that Sutent and Nexavar target the VEGF receptor, not VEGF itself.) Who wouldn't rather pop a pill versus receive a transfusion? It's not that simple, though, as transfusions increase patient compliance, which is a huge problem in the pharma world.

-Tykerb is priced about 10% less than Herceptin. We're entering a new phase of the evolution of targeted drugs, where price is a dimension of competition.

-Likewise, DNA is in the crosshairs of Tykerb, and a few other 2nd generation kinase drugs. When appraising DNA's stock, the big question is how much will DNA be able to grow it's franchises versus melt due to competitive offerings and/or competitive pricing. It is interesting to think that DNA's valuation in the medium term could be driven less by their own pipeline, and more by the pipeline of competitors.


In other news, this will be the last post to the Xcovery blog. As some of you know, the fact that there's a public blog that shares a name with our start-up kinase therapeutics company, Xcovery, was totally unintended. Xcovery has a brilliant future ahead of it, and I wouldn't want anything said on this blog to be potentially misconstrued or damaging to the company. In a world where there's only about 30 potential partners for Xcovery's products (if that), ticking off one potential partner via a blog posting (whether mine, or someone's comment) is something that we can't take a chance on.

I'll still put forward opinions and analysis on another, anonymous blog that I'll be launching this spring. Look forward to candid stock analysis, a little more attitude and personality, and perhaps a little less focus on kinases. There won't be a direct link from Xcovery to the new blog, for obvious reasons, but if you see a blog with posts that echo the ones you see here, then you'd be on target.



For your fill of insightful kinase and pharma commentary, please visit the very excellent KinasePro and In The Pipeline blogs.

In the meantime, you can reach me by mail at tim (-at-) xcovery.com

I'd like to thank the people who made ~10,000(!) visits to this space in less than 4 months, and especially those who added to the blog via comments. I started this outlet for my analysis for my own enjoyment, but I'm happy to say that I've gained tremendously from all of the interactions and learned alot from you. I hope that I've been able to do at least a little bit of the same for you.

A quick, closer look at SGXP

SGX posted their 4Q06 and FY2006 figures, so it's a good time to take a look at them.

SGX's 3 main programs target Bcr-Abl, c-Met, and JAK2.

The Bcr-Abl compound was partnered last May (NVS), which garnered a $25M upfront - though I can't find it on their financial statements - , and $9M in guaranteed research support. Last month SGXP announced a 3Q07 target for an IND filing, which probably triggers a milestone payment.

Under the NVS deal, SGX is responsible for all activities thru the completion of Phase I, and retained US co-promotion rights.

The c-Met program (SGX-523) is unpartnered, and slated for IND filing "within 12 months." Also, SGXP revealed that SGX-523 has "1000-fold more selective for MET over more than 200 human kinases."

The JAK2 program is very early - the press release makes it sound like it has been HTS'd but not much else - with an IND target in 18-20 months.


SGXP has a market cap of $80M, which is a bit better than just a month ago when I last posted about SGX ($61M), including $33M in cash on hand.

The conclusions then are still valid, and are augmented by some info that SGXP published in their year end financials. Specifically, they projected 2007 cash burn at $16-$18M, prior to any partner payments. This suggests that SGXP has about 2 years of cash left, meaning that for investors, you're betting that one or more of SGXP's programs will advance enough to replenish the cash position sometime in the next 2 years.

Using the payments from NVS ($25M upfront, $4.5M in r&d) as a guide, it would only take one deal over the next 2 years for SGX to just tread water. Two development deals in 2 years, or clinical progress by the Bcr-Abl program, or success in a new program started sometime in the next two years would drive value, and only add to the favorable risk equation.

Congrats to Sunesis....

....who entered Phase I with SNS-032, a multi-CDK (2, 7, & 9) inhibitor for blood cancers.

The other prominent CDK inhibitors in development are from Cyclacel, who does not appear to have publicly identified which CDKs are are in their sights. (AZ also has a CDK4 program.)

The concern with targeting CDKs is that they are so fundamental to cell function that any therapy needs to be very, very well targeted, with above average biological knowledge to compensate for off-target effects.

Not to mention the fact that as nuclear proteins, delivery for a-CDK compounds is much more complex than say targeting RTKs.

Perhaps success by Sunesis or Cyclacel will increase interest in CDKs as targets.

"Signal transduction inhibitors are a decade away."

That line was just uttered by "House," the main character in the very excellent TV show of the same name on Fox. House, an MD, is suffering from an inoperable brain tumor.

It's fun to see STIs show up in the mainstream media, especially when they're already here, though there are no approved STI therapies for brain tumors. At least there's Gliadel.

Biotech Dates to Remember

Adam Feurerstein at TheStreet.com has published an excellent summary of expected drug approval and clinical development news.

kinase drugs with key dates in 2007
-label expansions for DNA (Avastin (breast) and Herceptin), IMCL (Erbitux for colon, lung, head/neck, pancreatic.)

kinase compounds in trials with key dates in 2007
-GSK's Tykerb (FDA approval decision in just 2 weeks)
-Wyeth Torisel (FDA approval decision in jless than a month)
-Ariad's mTor phase II data
-Phase II data on 4 EXEL compounds (XL647,784,880, and 999). (Should be a big year for EXEL.)

Not appearing on Feurerstein's calendar: FDA approval for Lilly's Arxxant, NVS' Tasigna, and perhaps the AZ's Zactima and NVS/Bayer PTK/ZK. I'd also expect to see the results of label expansion studies for Sutent, Nexavar, and Tarceva.

The link above goes to Feurerstein's article. Here's a Link to calendar

While you're there, check out Adam's columns. He's accurate, timely, and insightful, and definitely "gets it."