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home / news releases / BDTX - Black Diamond: On Right Track For Possible Accelerated Approval Pathway


BDTX - Black Diamond: On Right Track For Possible Accelerated Approval Pathway

2023-06-28 18:51:03 ET

Summary

  • Positive results were released from a phase 1 study using BDTX-1535 for the treatment of EGFR non-small cell lung cancer patients; 5 out of 12 had achieved radiographic confirmed partial response.
  • Company to meet with FDA in Q4 of 2023 to see if it can obtain Accelerated Approval pathway for BDTX-1535 for EGFR non-small cell lung cancer patients.
  • Results from a phase 1 study, using BDTX-1535 for the treatment of EGFR recurrent Glioblastoma Multiforme patients, are expected to be released Q4 of 2023.
  • Other drugs being advanced as part of the Masterkey mutation targeting approach are BDTX-4933 and BDTX-4876.

Black Diamond Therapeutics ( BDTX ) is a good speculative biotech play to look into. Despite the stock price rising on the back of positive news the other day by as much as 235%, I still believe that there is great potential for long-term investors to get in. Why is that? That's because the release of the positive results was not only good for patients, but it accomplished something even more important, which is that it established proof-of-concept for it to be able to use its Masterkey mutation targeting approach. This is crucial because the goal of the company is to use this technology to target EGFR mutant and resistant cancer patients. Specifically, this biotech had done well to report positive results from a phase 1 study using its drug BDTX-1535 to treat patients with non-small cell lung cancer [NSCLC]. Of course, this was in NSCLC patients who had both acquired resistance and intrinsic driver EGFR mutations.

Is there any value remaining for any new investors for this stock? There are still a lot of catalysts on deck, which I believe could possibly cause the company's stock to trade higher even after the recent high. The first is the initiation of a dose expansion cohort study targeting NSCLC patients with EGFR acquired resistance an intrinsic driver mutations who have taken a third-generation EGFR TKI. This is expected to be initiated in the 2nd half of 2023. A second catalyst would be another way for Black Diamond to expand the use of BDTX-1535 towards another patient population. Which is the targeting of newly diagnosed NSCLC patients with intrinsic driver mutations. A third catalyst to look forward to would be full data from this recently released phase 1 study targeting EGFR NSCLC patients.

Such data is expected in Q4 of 2023 at a medical conference. It gets even better, because it the biotech is set to meet with the FDA in Q4 of 2023, whereby it might possibly receive a green light to develop a study for a potential Accelerated Approval pathway for BDTX-1535. Lastly, the use of this drug isn't only being used to target NSCLC patients, it is also being explored in treating patients with recurrent GBM. Results from an ongoing phase 1 study targeting this patient population with BDTX-1535 are expected to be released in Q4 of 2023. With proof-of-concept established in using BDTX-1535 for the treatment of EGFR NSCLC, plus the possibility of obtaining Accelerated Approval pathway for this very same patient population, these are the reasons why I believe that Black Diamond Therapeutics is a good speculative biotech play to look into.

MAP Discovery Engine Looks Good Based On Proof-Of-Concept For BDTX-1535 In NSCLC

As I stated in the beginning above, the main goal for this biotech is to develop what is likes to call are Masterkey inhibitors. Such inhibitors are developed based on the company's MAP discovery engine, whereby it targets solid tumors with driver mutations in cancer. The positive results were released from the phase 1 first-in-human study which used BDTX-1535 for the treatment of patients with advanced/metastatic Non-small cell lung cancer [NSCLC] harboring EGFR mutations with or without central nervous system [CNS] disease or recurrent Glioblastoma Multiforme [GBM] expressing EGFR alterations. The data released the other day specifically only deals with the NSCLC patient population. One thing to note about this early-stage phase 1 study is that it is both a dose escalation one and a dose expansion type. Non-small cell lung cancer is one of two major types of lung cancer that can affect both smokers and nonsmokers. Symptoms that these patients might experience are as follows:

  • Cough that doesn't go away on its own
  • Weight loss
  • Coughing up blood
  • Shortness of breath being present

It is expected that the global non-small cell lung cancer market could reach $36.9 billion by 2031 . This is a large market opportunity for sure, but Black Diamond won't be able to target the entire patient population though. That's because again, it is only targeting NSCLC patients who have acquired resistance and intrinsic driver EGFR mutations. It is said that about 10% to 15% of patients with lung cancer have the EGFR mutation . Thus, even if only targeting this subpopulation of NSCLC, it is still a good market opportunity to go after.

Positive results were obtained from this phase 1 study, when using this drug for the treatment of EGFR NSCLC patients. Patients in this trial were given BDTX-1535 in a dose-escalation phase portion of this study at 7 dose levels ranging from 15 mg to 400 mg once-daily [QD] dosing. Based on updated data as of June 16, 2023, it was noted that 5 out of 12 patients in a subgroup of NSCLC had achieved radiographic confirmed partial response [PR]. There was 1 patient who had unconfirmed PR awaiting confirmation and then the other 6 patients had stable disease [SD]. For initial data, this is not bad at all. Consider that these patients were heavily pretreated with an average of two prior therapies, with some patients taking anywhere between 1 to 9 prior therapies. Not only that but a significant portion, about 79% received prior treatment with an EGFR Tyrosine kinase inhibitor [TKI] drug. Such a drug is known as TAGRISSO [osimertinib], which has been approved by the FDA to treat NSCLC patients with certain mutations.

Whatever you think about this data, it did bring about one potential major advancement. That is, Black Diamond Therapeutics is set to meet with the FDA in Q4 of 2023. That is when it will see if it can get a green light from the FDA to possibly design a study or cohort that is capable of allowing BDTX-1535 to receive Accelerated Approval in targeting EGFR NSCLC patients. There is no guarantee that the FDA will allow for Accelerated Approval of this drug for this specific patient population, but it remains a possible catalyst in Q4 of 2023 nonetheless.

Additional Catalysts In 2023 To Look Forward To

The potential for Black Diamond Therapeutics to receive the green light for potential Accelerated Approval for BDTX-1535 in EGFR NSCLC patients, is only one of many catalysts on deck for 2023. Another catalyst would be the full data set from the phase 1 study using BDTX-1535 in EGFR NSCLC patients. That is, the biotech plans on presenting such full dose escalation data at an medical conference in Q4 of 2023. Then, there are two expansion opportunities to make note of as catalysts. One would be an initiation of a dose expansion cohort of NSCLC patients with EGFR acquired resistance and intrinsic driver mutations after progression on a third generation EGFR TKI, which is expected in the 2nd half of 2023. Then, the goal of this company is to also test out BDTX-1535 in newly diagnosed NSCLC with intrinsic driver mutations. Such an expansion would allow it to target another group of EGFR mutant NSCLC patients. The final catalyst to look forward to in 2023 would be updated results from the phase 1 dose escalation study, which is using BDTX-1535 for the treatment of patients with Glioblastoma Multiforme [GBM]. Results from this early-stage study are expected to be released in Q4 of 2023. If this data turns out to be good, then it will reinforce the Masterkey mutation-targeting approach.

Financials

According to the 10-Q SEC Filing , Black Diamond Therapeutics had cash, cash equivalents, and investments of $103.4 million as of March 31, 2023. The reason for the cash on hand was due to the completion of an IPO, whereby it sold 12,174,263 shares of its common stock, including the exercise in full by the underwriters of their option to purchase up to 1,587,947 shares of its common stock for total gross proceeds of $231.3 million. It took in $212.1 million after deducting underwriting discounts and commissions and other estimated offering expenses. Not only that, but through March 31, 2023 it received net cash proceeds of $200.6 million from previous sales of its preferred stock.

There are two financial instruments which have been deployed that might possibly be utilized for this biotech to fund itself. The first deals with a shelf registration statement on Form S-3, which was filed on November 14, 2022. This covers selling common stock, preferred stock, debt securities, warrants and/or units of any combination thereof up to a maximum price of $500 million. Then, it also entered into an Open Market Sale AgreementSM with Jefferies LLC [Jefferies], whereby it would allow Black Diamond to issue and sell up to $150 million if its common stock from time to time as necessary. As of March 31, 2023, no sales have been made under this ATM program with Jefferies. The company believes that it has sufficient cash to fund its operations into Q3 of 2024. As of this writing no offering has been done yet, but my bet is that with the stock price trading higher the other day by 235%, it is my belief that it will raise cash in the coming days/weeks.

Risks To Business

There are several risks that traders and investors should be aware of before investing in this biotech. The first to consider would be with respect to the phase 1 study using BDTX-1535 for the treatment of patients with EGFR NSCLC. Full data from this study is expected in Q4 of 2023 at a medical conference. Just because the preliminary data caused the stock to trade higher, there is no guarantee that this full data set to be released will also. In addition, Black Diamond Therapeutics is seeking Accelerated Approval of BDTX-1535 for the treatment of EGFR NSCLC patients. That is, for it to receive a go ahead from the FDA to possibly design a study/cohort, which will allow it to receive Accelerated Approval of BDTX-1535 for the treatment of this patient population.

There is no assurance that the FDA will allow it to receive such a designation. A third risk to consider would be with respect to another data release using this very same drug. I'm talking about the release of results from the phase 1 study using BDTX-1535 for the treatment of patients with recurrent GBM. Such dose escalation data is expected to be released in Q4 of 2023. The hope is that this drug also works in treating GBM patients, but there is no guarantee that it will be able to do so. The final risk to consider would be with respect to the financials position that this biotech finds itself in. As I stated above in the financials, it believes that it has enough cash on hand to fund its operations until at least Q3 of 2024. With the stock price trading higher, plus the less than 1-year worth of cash, I believe that it will need to enact a cash raise almost immediately.

Conclusion

The final conclusion is that Black Diamond Therapeutics is a good speculative biotech play to look into. That's because it is advancing a fourth-generation EGFR TKI, which it capable of addressing intrinsic and acquired resistance. It does so by effectively targeting EGFR alterations. It has several catalysts on the way as well, which I believe could provide further upside for traders/investors. There are two very specific catalysts which I believe are far more crucial compared to the other ones. The first of these two catalysts would be with potential for Black Diamond to receive an Accelerated Approval pathway for BDTX-1535 for the treatment of patients with EGFR NSCLC. The second of the two most important catalysts in my eyes, would be the data release from the phase 1 study using BDTX-1535 for the treatment of EGFR recurrent GBM patients. Both of these catalysts are expected in Q4 of 2023.

Lastly, this biotech is not only relying on advancing BDTX-1535 forward for EGFR NSCLC and GBM. It is deploying its Masterkey mutation targeting approach for other drugs in its pipeline as well. For example, it received IND clearance from the FDA to initiate a phase 1 study using BDTX-4933 as a RAF Masterkey inhibitor targeting solid tumors. It also has BDTX-4876, which is a FGFR 2/3 selective inhibitor targeting multiple types of solid tumors. However, with respect to this last drug, the company is only going to move this forward if it can find a partner to help fund it. With proof-of-concept established in using BDTX-1535 for the treatment of EGFR NSCLC, plus the possibility of obtaining Accelerated Approval pathway for this very same patient population, these are the reasons why I believe that Black Diamond Therapeutics is a good speculative biotech play to look into.

For further details see:

Black Diamond: On Right Track For Possible Accelerated Approval Pathway
Stock Information

Company Name: Black Diamond Therapeutics Inc.
Stock Symbol: BDTX
Market: NASDAQ
Website: blackdiamondtherapeutics.com

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