DAWN - Day One Biopharmaceuticals: Recent Strong Data And Major Catalysts Ahead

Summary

• Day One Biopharmaceuticals declared strong data in relapsed glioma in June.
• The company has strong cash position.
• They may submit an NDA next year.

Day One Biopharmaceuticals, Inc. ( DAWN ) is a developer of targeted cancer therapies for a variety of tumors, with a lead candidate targeting brain cancers called glioma. Lead drug, Tovorafenib, an oral brain-penetrant type II pan-rapidly accelerated fibrosarcoma kinase inhibitor, is in a pivotal trial targeting relapsed/progressive low-grade glioma in pediatric patients. The stock recently almost doubled on positive early data from the pivotal FIREFLY-1 trial. They plan to topline next year in Q1, and file for approval.

Data showed an overall response rate (ORR) of 64% and clinical benefit rate ((CBR)) of 91% in the first 22 evaluable patients treated with monotherapy tovorafenib. To put that in some perspective, ORR from Dabrafenib in BRAF-mutated relapsed pLGG was a mere 44%. ORRs from various other brain cancers - not necessarily pLGG - found here show much lower ORRs generally from dozens of treatment paradigms. Relapsed or progressive pLGG is the most common brain tumor diagnosed in children and it has no approved therapies and no standard of care.

Other data points :

• 14 partial responses (13 confirmed responses and 1 unconfirmed response)

• 6 patients with stable disease

• All patients with stable disease (n=6) were noted to have tumor shrinkage, ranging between 19% and 43%

• Responses were observed in patients with both BRAF fusions and BRAF V600E mutations who received prior MAPK-targeted therapy

• The median-time-to-response was 2.8 months

• A heavily-pretreated population, with a median of 3 prior lines of therapy (range: 1-9)

• All patients who responded remain on therapy (n=14) and no patients have discontinued treatment due to treatment-related adverse events.

It is important to note that the treatment had a 36% adverse event ratio of grade 3 or greater. The current frontline method of treatment, vincristine/carboplatin combo, has a grade 3 or higher AE ratio of 95%. pLGG is described as highly treatable, even curable, and survival using current treatments is relatively long, patients often relapse, and there is no standard of care for relapsed pLGG. Moreover, treatment is often lifelong, causing numerous toxicities, and impacting learning, cognition, and quality of life.

'These initial findings underscore the potential of tovorafenib monotherapy to become a significant and transformative new option for relapsed/progressive pLGG, a pediatric brain tumor with no approved treatments today,' said Samuel Blackman, M.D., Ph.D., co-founder and chief medical officer of Day One. 'With the registrational cohort fully enrolled, patient follow-up is ongoing, and we look forward to the topline data from the complete study population in the first quarter of 2023. Based on these positive initial data, we plan to begin the pivotal Phase 3 FIREFLY-2 clinical trial evaluating tovorafenib as a front-line therapy in pLGG to evaluate whether tovorafenib can provide benefit early in the disease development.'

Tovorafenib has breakthrough therapy designation, rare pediatric disease designation, and orphan drug designations, the latter from both the USA and the EU.

Tovorafenib has a long history. It was developed in 2004 through a collaboration between Biogen ( BIIB ) and Sunesis. In 2011, Biogen sold this asset to Takeda, who continued development with Sunesis. Next year, Takeda moved this asset to the clinic, but targeting melanoma. By 2019, Day One had purchased tovorafenib from Takeda for a mere $1mn and a 12% stake for Millennium Pharma, a Takeda subsidiary, in the company. In 2021, when Sunesis collapsed and went back to Viracta, the later decided to sell its rights to Xoma for a relatively low price. Meanwhile, Day One came out with this positive data, which considerably increases the value of tovorafenib.

Financials

DAWN has a market cap of $1.75bn and a cash reserve of $395mn. The company made an upsized offering of $172mn right after the positive data readout. Research and development expenses were $22.6 million for the second quarter of 2022, while G&A expenses were $14.2mn. At that rate, the company has enough cash to last it till 2025, i.e. well beyond their potentially first approval sometime in late 2023.

Bottomline

DAWN is a highly interesting company with strong positive data and considerable cash runway. They have a near term major catalyst in the form of topline pivotal data early next year. They are targeting a disease with a high unmet need. While their current price is quite high, I would look to enter the stock as the volatility in the price consolidates.

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