PropThink: ArQule Rising on SPA Agreement with FDA, Further Indications for tivantinib
(Thomson Reuters ONE) -
By Jake King
Shares of ArQule (NASDAQ:ARQL) are up 8% on news that the FDA has agreed to a
Special Protocol Assessment for the company's planned Phase III tivantinib
trial. ArQule is designing a study of its lead candidate as a second-line
Hepatocellular Carcinoma (HCC) treatment. This is the drug's second Phase III
trial, following the discontinuation of a Phase III study for Non Small-Cell
Lung Cancer (NSCLC) early this month. In a planned interim analysis, ArQule and
development partner Daiichi Sankyo (OTC:DSNKY) determined that the drug was
unlikely to meet its primary endpoint, improving Overall Survival, and
discontinued the trial. ARQL was crushed, falling more than 50% within a day.
But the failure in NSCLC means little to the drug's potential in HCC and created
an opportunity for value-seeking investors. Back in June, ArQule presented final
results from tivantinib's Phase II trial as a second-line HCC treatment, which
demonstrated statistically significant improvements in Time to Progression (the
trial's primary endpoint), Progression Free Survival, and Overall Survival.
Tivantinib is far from entering the market, but liver cancer remains an unmet
medical need, and the market for a quality second-line product is large.
The FDA has been particularly liberal with Special Protocol Assessments (SPA)
this year, and although not an endorsement of the drug, the SPA lends
credibility to the design of the forthcoming trial. Also encouraging is
Daiichi's commitment to the product; even after its previous NSCLC failure the
Japanese drug-maker is sticking around. The company splits Phase 2 and 3
development costs of tivantinib with Daiichi Sankyo, reducing expenses
significantly, and the two have a noteworthy royalty agreement. Since ArQule's
plummet early this month, the company trades just over its cash, equivalents,
and marketable securities, and although on the mend, ARQL still looks
undervalued. ArQule will report data from a Phase II trial for tivantinib in
Colorectal Cancer by the end of the year and plans to initiate the Phase III HCC
trial within the same time frame. The SPA is an incremental positive, but
upcoming data and trial initiation leave room for ARQL to run.
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Datum: 16.10.2012 - 17:25 Uhr
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News-ID 193014
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