In yesterday’s article (see What You Must Know Before Investing in Prostate Cancer Stocks
), I outlined how prostate cancer patients are treated. Urologists “own” the patient until the point they are broadly metastatic and symptomatic. Up until that point, oncologists typically are not consulted. Understanding this urologist/oncologist patient ownership battle is critical to making smart investments in the prostate cancer space.
I think it is worthwhile to use Dendreon’s
(DNDN) Provenge as an example here.
Provenge is approved for metastatic, asymptomatic or minimally symptomatic Castrate Resistant Prostate Cancer (CRPC, patients whose PSA is rising despite treatment with hormones). While the label allows it to be used both before and after chemotherapy, it is widely thought of as a pre-chemo drug. Given this and what I discussed in yesterday’s article, who is Provenge’s customer?
The urologist, without a doubt. Very few urologists will refer an asymptomatic patient, even one with initial metastatic disease, to an oncologist. Therefore, urologists control the ideal Provenge patient.
The major reason Dendreon is having problems is it ignored the reality of the prostate cancer marketplace. It focused initially on oncologists. It wasn’t until late in 2011 the company even had salespeople specializing in selling to urologists. This was a monstrous strategic mistake that may end up bankrupting Dendreon if the company cannot get it fixed and fast.
How could Dendreon, which had plenty
of time to research the space while waiting for the FDA to finally correct their mistaken denial of Provenge, make this seemingly easy mistake? The answer to this question is why so many other companies make the same mistake.
Only a handful of doctors involved in the initial Provenge trials were urologists. Most urologists don’t participate in prostate cancer trials for later-stage disease – especially when the drug requires an infusion since very few urologists have their practices configured to do infusion medicine. To get Provenge across the finish line, Dendreon had to court and listen to oncologists.
It is not well known that oncologists are generally ticked off at urologists. Oncologists want to see those CRPC patients sooner. After the 2004 approval of docetaxel chemotherapy for CRPC patients, oncologists launched over one dozen trials to move that drug earlier in the disease setting (like in breast cancer, where women get chemo even before
surgery). All but one of the trials were cancelled due to inadequate enrollment. Why? Urologists wouldn’t “share” their patients.
So companies like Dendreon have oncologists yelling in their ear that their drug is an oncology drug. Companies listen when key opinion leaders in oncology say this because those key opinion leaders are absolutely critical in getting patients into their pivotal trials. Dendreon certainly listened so hard that it missed the cost density issue (which hurts urologists more than oncologists and doesn’t affect academic institutions where key oncology opinion leaders practice). Dendreon didn’t concentrate hard enough on convincing urologists to add infusion medicine to their practices, and Dendreon completely missed the fact urologists don’t actively scan newly CRPC patients for metastatic disease.
Dendreon’s new management is trying to turn the ship, but is still making old mistakes. The PSA quartile data Dendreon press-released last week is being presented at ASCO. Bad move. Those data should be presented at AUA because they will be most meaningful to urologists. Only time will tell whether Dendreon’s mistake in thinking Provenge is anything other than a urology drug will doom the company.
(EXEL) has also fallen into this trap. Its promising cabozantinib has, so far, been able to slow or reduce bone tumors in nearly every man who has taken it. Bone disease is the big deal
in prostate cancer. When prostate cancer goes metastatic, it goes to the bone. That causes pain and screws with the body’s ability to produce blood cells. The side effects from weaker bone structure and inadequate blood cell production are what prostate patients die of.
Urologists would climb all over themselves to get a drug, especially a relatively well-tolerated pill like cabozantinib, that reliably reduces bone disease. Yet Exelixis chose to run its initial Phase III trial in the deep salvage oncologist indication – after chemo and after Zytiga.
Why? Management will tell you this is how drugs are developed. You take them into the late stage, prove them there, and then move them upstream into earlier disease.
Nonsense. Only oncologists would say that – particularly oncologists who are not eager to see their urology counterparts have an effective new drug. Cabozantinib should be taken where it can make the most difference for patients – into the urology clinic to find patients who are recently CRPC and just starting to see bone tumors.
For those who own Exelixis and wonder why the valuation is so miserable despite the great prostate cancer results, there is your answer. Management doesn’t understand the urology treatment paradigm and is listening to the wrong doctors.
Some reading this might object or scoff at the idea oncologists and urologists are at war with each other over patients. Scoff away, but I’m right. Eight years of AUA meetings, eight years of ASCO general meetings, and six years of ASCO prostate cancer meetings give me plenty of real and anecdotal information proving this battle rages constantly.
Of the current batch of prostate-focused companies, Medivation
(MDVN) seems to be doing the best job of navigating the sector. Their job is made easier by having a best-in-disease drug with no important side effects and, so far, very nice efficacy data. They ran their first trial in the post-chemo space, true. But their second trial is pre-chemo and, importantly, they are running multiple smaller trials in even earlier-stage disease to give urologists
hands-on experience with the drug. MDV3100 (enzalutamide) will make a huge splash in the urology space, and is the only drug in 30 years to have a chance to displace current hormone therapies.
What about Johnson & Johnson’s
(JNJ) Zytiga? It also started post-chemo and found approval there. It has an under-developed urology program. Its drug is expensive to patients (thousands more than Provenge to the typical Medicare patient), has meaningful side effects, and requires regular testing to avoid very serious side effects. Even worse, the Zytiga pre-chemo data (to be presented at ASCO in early June) shows the drug has no survival benefit in the pre-chemo patient population. Drive by Johnson & Johnson’s PR machine, Zytiga is getting the press. Even if Johnson & Johnson manages to get the drug approved in the pre-chemo space without a survival benefit, urologists who try it will find it is more trouble than it is worth in asymptomatic patients.
As an investor, the first question you have to answer when evaluating a company with a prostate cancer drug is whether the drug is a urology drug or an oncology drug. Once you figure that out, watch management closely to see how they position the drug in clinical trials. Even more importantly, see if managements' marketing strategies match. If there is disagreement, it is likely the stock will suffer – at least in the shorter term. The longer management persists in getting it wrong, the deeper the damage to the company will be.