Revised Estimate for GLOBAL Market of Iclusig for GIST indication $500m - $1.5b

I have revised the model per suggestions from comment received on first version, but note the following:

1. I need source for GLOBAL incidence of GIST (only have US estimate, per previous post).

2. Need a clinician to advise how long a patient would likely be on Iclusig to treat GIST (this has implications for number of patients on treatment in a given year)

		Low Estimate	High estimate
Global Annual Incidence of GIST		7,500	10,000
No. Cases Treated with Iclusig		25%	40%
Cumulative Years' Incidence being treated per year		2	3
Total Case treated with Iclusig per year		3,750	12,000
Annual cost of treatment	125,000
Annual GIST related Iclusig Revenue		$468,750,000	$1,500,000,000

The Unforseen Catalyst: Pona as Orphan Drug for GIST.

This one wasn't on the radar.  Until now. 

If/when Ariad gets approval to market Ponatinib for GIST, it means that it's the drug of choice - first line for this indication.  Note that we already have FDA DESIGNATION of orphan status of Ponatinib for the GIST indication.  What we don't have yet is approval to market for this indication.  And if that happens,  we have huge and unanticipated catalyst.  Here's why.

1. Orphan status gets you a monopoly protection for the indications for 7 years, per FDA guidelines.

2. Per above,  we shoot to first line as its clearly the drug of choice (only one drug gets orphan status per indication).

3.  Additional revenues of up to $1.5 billion. The model to calculate the potential revenue range follows below. Suggestions to improve the model and assumptions are more than welcome, so please do weigh in.

Here are the assumptions.

1. Annual INCIDENCE of GIST (new cases) estimated at 3,300 to 6,000 in the US.   This estimate is from the National Cancer Institute.   See: National Cancer Institute GIST Incidence Estimate
2. Use endpoints of NCI incidence for annual new cases, multiply by percent of cases treated with Iclusig: LOW estimate = 50%, HIGH estimate = 100%
3. Estimate number of years a patient is on treatment: LOW = 1.5  years, HIGH = 2 years.  Note: This is probably the weakest link in the model, as I don't have data on how long patients would need to be on treatment.
4. 
   
   
   

   		Low Estimate	High estimate
   Global Annual Incidence of GIST		3,300	6,000
   No. Cases Treated with Iclusig		50%	100%
   Culmulative Years' Incidence being treated per year		1.5	2
   Total Case treated with Iclusig per year		2,475	12,000
   Annual cost of treatment	$125,000
   Annual GIST related Iclusig Revenue		$309m	$ 1.5b

   
   
   I welcome your suggestions on how to improve these estimates.

Market value of AP26113 and additional indications of Iclusig

Where are we going?

I have yet to see an analysis of the potential market value of AP26123 and the additional indications for Iclusig.  Ultimately, this is what will drive future PPS and/or acquisition price. But why don't the pundits comment on this?

I am going to take a stab at this analysis, which will take some time. If you have data or suggestions that will help, please post them here.

Stay tuned?

Whiplash!

Ok, that wasn't fun.  From yesterday's low of -12% to today's closing at +6%, a lot of us are still recovering from whiplash.  So now what? 

ARIA-AHAAA!

First, I'm renaming this stock, Dr. Berger. Your company shall forevermore be referred to as Ariad VOLATILE Pharmaceuticals, and ARIA will be replaced by AVP.

Second, WOW!  Do I have the stomach for this kind of roller coaster? Do you, Ariad Investor?

And Third, are you a trader or an investor? If the former, well, good luck. I admire your fearless, thrill seeking spirit. Really.  But if you're the latter, if you're really an investor AND  you believe in Denner and Cole and 113 and the Mystery Molecule and the five new potential indications for Iclusig, then there's a question you need to ask yourself.

Are you strong enough to hang on and ride this beast to the mountain top?

FRODO! TELL ME IT IS SO!!

This one will be short, b/c Frodo said it best...

Frodo's Take on the ARIA Rollercoaster...

Ok, something serious after I finish my beer...

TC

Why Ariad Investors should cheer, not fear, the Biotech Bubble deflation

Ok, it looks like the sky is falling for the biotech sector.  At least that’s how it feels, especially when you look at the Biotech indexes like NBI which have fallen well over 20% in the last few months.   On the other hand,  this same index was UP over 65% in the previous ten months.    

The zig zag has led a lot of pundits to conclude that maybe the sky isn't falling, but what we have here is a timely deflation of a bubble.   And honestly, wouldn't you rather have a prophylactic deflation of a bubble than a full-on implosion or pop?    You most certainly would, I’d wager, because the implosion/pop scenario could rattle capital markets and complicate biotech related acquisitions.

Which is where Ariad comes in.

While this Biotech bubble deflation is hard to watch, and has certainly put a damper on ARIA PPS, the thing to remember  here is that ARIA’s chart over the last year is really an “inverse bubble.”   ARIA suffered a major deflation after the FDA induced flash crash, from which we've achieved (on a good day) a 50% recovery.    We’re filling a gap here, folks, that is still ARIA’s story.

So, if you are an ARIA shareholder feeling sick about the recent PPS decline, take heart.   The current deflation of the biotech bubble  is not the ARIA narrative.    The Aria  story is about getting back to where we were after a completely unnecessary flash crash.  It is a story in which future catalytic events are on the horizon  -  AP26113, new indications for Iclusig including colon cancer & combination therapy, and of course the (soon to be released?) mystery molecule.

So why cheer on the biotech bubble deflation?   Do so because it’s not the ARIA narrative, and it’s giving us all a chance to go buy shares of Ariad at an even steeper discount.

Happy shopping. 

British Medical Journal Documents Successful Use of Iclusig in Combination Therapy

And still more on the value of Iclusig...in addition to colon cancer treatment and five other indications under evaluation. 

Headline: Haematological complete remission by ponatinib and bortezomib in a patient with relapsed, Ph+ pre-B acute lymphoblastic leukaemia

Punchline:  Our experience with a single patient suggests the feasibility of combined targeted therapy with ponatinib and bortezomib. This novel treatment approach achieved clinical remission with a manageable toxicity profile. 

Please note: all credit for the due diligence goes to Kipster210, he found this the day it was published (yesterday) and posted on Ihub.  Thank you Kipster!  The full abstract, as published yesterday in the British Medical Journal (BMJ) follows below.   

BMJ Case Reports 2014; doi:10.1136/bcr-2014-203894 

CASE REPORT 

Haematological complete remission by ponatinib and bortezomib in a patient with relapsed, Ph+ pre-B acute lymphoblastic leukaemia 

Sara Robinson1, Yair Levy2, Christopher Maisel1, Alex W Tong2 

+ Author Affiliations 

1Department of Internal Medicine, Baylor University Medical Center, Dallas, Texas, USA 

2Innovative Clinical Trials Center, Baylor Sammons Cancer Center, Dallas, Texas, USA 

Correspondence to - Dr Yair Levy, Moshe.Levy@baylorhealth.edu 

Accepted 17 March 2014 

Published 12 April 2014 

Summary 

A 74-year-old man was previously diagnosed with BCR-ABL1-positive pre-B cell acute lymphoblastic leukaemia (pre-B ALL) based on bone marrow cytology, flow cytometry, cytogenetics and fluorescent in situ hybridisation findings. Following a highly complicated hospital course, the patient achieved cytogenetic remission by consolidated chemotherapy and the tyrosine kinase inhibitor dasatinib. He subsequently presented with relapsed pre-B ALL after 3 years in remission. In consideration of his challenging clinical history, he was started on concurrent ponatinib (45 mg daily) and bortezomib (1.3 mg/m2 intravenous weekly). The major molecular response was achieved (<0.0893% BCR-ABL1 transcripts) after 3 months. Bone marrow now demonstrates a BCR-ABL1-negative, complete cytogenetic response. The patient continues to do well with mild thrombocytopenia and improved anaemia on bortezomib and 30 mg daily ponatinib. Our experience with a single patient suggests the feasibility of combined targeted therapy with ponatinib and bortezomib. This novel treatment approach achieved clinical remission with a manageable toxicity profile.  

Ariad Hires Hugh Cole, Shire Pharmaceuticals M&A Guy. Any guesses why??

Ok, clever Ariad investor, you read Cole's bio on the Ariad web site. Very good. But did you check his FORMER employer's web site to see what Cole was up to at Shire, M&A wise, during his seven year tenure? Fourteen (yup, 14) acquisitions and/or major partnerships during his reign. But don't believe me, count 'em yourself.

http://www.shire.com/shireplc/en/business/shire-partnerships-and-acquisitions

So, why did Ariad hire M&A guru Hugh Cole about 30 days after Activist Investor Denner signs on?  

You tell me.

Onward?

Bad day. Painful to see money vanish.  Lot's of it.  And at the end of a day like today, who needs a lecture about "fundamentals" and, no, don't say it...patience.  Not you, I'd guess, and certainly not me.

But there's this.

Zoom out. Think about the $8.4 billion spent on health care for colon cancer every year, and all the lives that are lost in spite of all that.  And then think about what was just presented at the American Association for Cancer Research annual meeting: evidence that Iclusig might be the next important weapon in the war on colon cancer.

And one last thing. Be safe.  Talk to your doc about scheduling a colonoscopy, because your health is more valuable than all the money in the world.  I'll have the procedure, for the second time, in six weeks. No joke.

Count Down for the Activist Inestor

Alex Denner has exactly 52 more days.

   

And after this, his first 100 days will be over.

If you doubt that this initial period is important, just take a look at the vast number of Management tomes devoted to how a new leader needs to get out of the starting blocks at full speed.  Try, for example, “The New Leader's 100-Day Action Plan: How to Take Charge, Build Your Team, and Get Immediate Results” by  Bradt, Check and Pedraza.    There’s a slew of similar books which hammer on the same point again and again. 

The first 100 days matter.  A lot.

This is the time when a new leader (or Activist Investor…) will take charge, lay out a plan, and provide powerful and credible leadership.   It’s the period during which a new leader will demonstrate that they are turning things around.   The rank and file, not to mention investors, need concrete demonstrations of impact and progress during this critical period. Absent that, they lose faith, and the initial enthusiasm and confidence wanes.  And they go elsewhere.

So what will it be? Licensing and pricing agreements in Europe? News on AP26113? Launch of the “Mystery Molecule?”  Updates on progress with new indications for Iclusig?  Or, heaven forbid, a buyout?  It has to be something, and it needs to be soon.   The masses of investors are starting to grumble, and Ariad leadership's statements of commitment to Ariad investors’ well-being are wearing thin.

So, Alex, the clock is ticking.  We’re down another four percent today as I write this note, and as one of your most supportive and enthusiastic Ariad invesetors, I’m counting on you demonstrating your positive influence, incredible talent, and your ability to “create value for shareholders” - as promised by both you and Dr. Berger.

Tick tock.

                                                                                                       

American Association of Cancer Research: New from Ariad

Ariad (ARIA) had been incorrectly, if not carelessly branded as a one trick pony.  This is not only misleading for investors, but it denies cancer patients and their families access to new and important information about potential future treatments for both colon cancer and solid tumors (and in particular, metastatic lung cancer tumors).  New research results, albeit preliminary, are featured in presentations at the American Association for Cancer Research (AACR) annual meeting currently underway in San Diego.

Let’s tackle colon cancer first.  Abstract 2726 from the AACR meeting concludes that: “for the first time, oncogenic RET fusions in CRC patient samples, suggesting RET may be a driver in a subset of CRC patients. Ponatinib [Iclusig] effectively inhibited these fusions with potency substantially exceeding that of other RET inhibitors and demonstrated significant anti-tumor activity in PDX models. These results provide strong support for the clinical evaluation of ponatinib [Iclusig] in patients with RET-fusion positive cancers, including colorectal cancer”

So what does this mean?   In addition to the five other indications for Ariad’s Iclusig is being evaluated in clinical trials, use for treatment of colon cancer may also be added to the list.   And don’t forget, this drug has already been approved by the FDA. Twice.

Stir into the mix the Ariad’s new, yet unnamed, “AP26113,” a promising new medication that is still undergoing evaluation.   AACR  Conference Abstract 3719, in dense technical language, discusses potential new approaches for treating “solid and haematological tumors,”  noting that  patients on “Crizotinib ….[a different drug]…  approved for the treatment of late stage and metastatic cases of lung cancer...  developed Crizotinib resistance, mainly due to the appearance of new point mutations located in ALK kinase domain.” While noting that second line therapies are being developed to deal with Crizotinib resistance, recent research has focused on “the more potent phase I/II dual ALK/EGFR inhibitor AP26113 (Ariad Pharm.)”  Not only has this molecule demonstrated an ability to overcome Crizontinib resistance, but studying it has also allowed researchers to advance their understanding of the disease process. The researchers  conclude  that “the knowledge of the possible appearance of new clinically relevant mechanisms of drug resistance is a useful tool for the management of new TKI resistant cases.”

So, before you write off Araid as a “one trick pony,” keep in mind that their existing FDA approved drug has multiple, promising potential applications which are now being evaluated; treatment of colon cancer may soon join that list.  And don’t forget the yet to be approved AP26113 which has demonstrated significant promise as a second line cancer treatment when Crizotinib resistance develops.  Will this new drug be on the market tomorrow, or will the additional uses for FDA approved Iclusig be confirmed in coming weeks?  Of course not. That’s not how science works.  But if you’re looking to the future of cancer treatment, rest assured that Ariad is on the forefront of this important work. And that explains why many investors, myself included, are long on ARIA.