MRTX - Mirati: Expansion Of Adagrasib With sNDA And Combination Studies

2023-08-28 07:54:44 ET

Summary

• Results from the phase 1/2 study using MRTX1133 for the treatment of patients with KRAS G12D mutated tumors are expected by the 1st half of 2024.
• Completion of supplemental New Drug Application of adagrasib for the treatment of patients with colorectal cancer who harbor the KRAS G12C mutation expected before the end of 2023.
• Initiation of a combination study using adagrasib with KEYTRUDA [pembrolizumab] for the treatment of 1st-line NSCLC patients with KRAS G12C mutation in a phase 3 study expected by the end of 2023.
• MRTX had $779.4 million in cash as of June 30, 2023. Should be good on cash for a while since it recently raised approximately $345 million before deducting expenses.

Mirati Therapeutics ( MRTX ) has made great progress with respect to its drug adagrasib, which has already been granted Accelerated Approval from the FDA for the treatment of patients with metastatic or locally advanced non-small cell lung cancer [NSCLC] with the KRAS G12C mutation, who have already received at least one prior systemic therapy. Why I believe that this biotech offers value is because there is a supplemental New Drug Application [sNDA], which is expected to be filed by the end of 2023. This is so that the biotech will be able to expand the label to include 3rd-line and beyond colorectal cancer patients who harbor the KRAS G12C mutation.

This is the first notable expansion opportunity for this company, especially as it relates to generating near-term shareholder value. A second expansion opportunity would be with the advancement of another drug in its pipeline known as MRTX1133, which is a KRAS G12D inhibitor. This is significant, because this type of KRAS mutation is far more prevalent compared to KRAS G12C. With respect to the development of MRTX1133, there is a catalyst opportunity. It is expected that Mirati will release results from the phase 1/2 study, using MRTX1133 for KRAS G12D mutated tumors, in the 1st half of 2024. I believe that further value can be unlocked here, because of the even bigger patient population for this drug targeting this KRAS mutation. The final expansion opportunity is early evidence of achieving superior outcomes for patients when adding KRAS inhibitors together with immunotherapy.

Adagrasib Can Be Used For More Than One Type of KRAS Mutated Cancer Type

As I stated above, Mirati Therapeutics was able to receive Accelerated Approval from the FDA for adagrasib for the treatment of patients with locally advanced or metastatic non-small cell lung cancer [NSCLC] adult patients who harbor the KRAS G12C mutation. This Accelerated Approval was granted on the back of an open-label study, known as KRYSTAL-1. This particular study recruited about 112 patients with NSCLC who had the KRAS G12C mutation. Another thing to note is that these are patients who had to have failed at least one prior systemic therapy. They were treated with 600 mg of adagrasib two times per day until they either progressed in disease or experienced unacceptable toxicity. There were two primary endpoints for this particular open-label study, which were objective response rate [ORR] and duration of response [DOR]. Both of these respective endpoints were achieved, in that the ORR was 43% and then the average DOR was 8.5 months . This is where the first expansion opportunity comes into play. In that, the biotech expects that it will submit a supplemental New Drug Application [sNDA] of adagrasib for the treatment of patients with colorectal cancer who harbor the KRAS G12C mutation. The sNDA to expand the label for adagrasib [marketed as KRAZATI] to this other tumor type is expected to be submitted by the end of 2023. It is said that approximately between 3% to 4% of colorectal cancer patients harbor the KRAS G12C mutation.

Second Expansion Opportunity For KRAS Tumor Targeting Is Even More Ideal

The thing is that with respect to first obtaining Accelerated Approval from the FDA of adagrasib for the treatment of patients with non-small cell lung cancer [NSCLC] makes sense. That's because of the percentage of patient population that can be addressed. What do I mean by that? Well, it is said that about approximately 39% of NSCLC patients have the KRAS G12C mutation. However, the other KRAS G12D mutation is only seen in 17% of NSCLC patients . Having said that, the other drug MRTX1133 being developed in the company's pipeline, targets an oncogenic mutation which is greater than two-fold. As an example, the pipeline shows that adagrasib is being developed for the treatment of patients with pancreatic cancer. The thing is that the KRAS G12C mutation is only seen in approximately 2% of pancreatic cancer patients. This is a good population for Mirati to go after, because it helps these patients who harbor this specific mutation. On the other hand, MRTX1133 has a lot more potential than adagrasib, because it is a more prevalent oncogenic mutation. How so? Well, when looking at KRAS G12D mutations, it is said that about 67.6% of pancreatic cancer patients harbor this mutation. The point here is that even though adagrasib will likely be expanded upon in the coming years to address several tumor types that harbor the KRAS G12C mutation, this biotech has an even larger opportunity when it comes to MRTX1133, which targets a much larger chunk of certain tumor type populations. Even though this clinical candidate is in early testing, there is a catalyst opportunity for investors to look forward to. It is said that there will be initial monotherapy data released from this phase 1/2 study in the 1st half of 2024.

Third Expansion Opportunity Is Even More Critical

It is good that Mirati Therapeutics was able to achieve FDA Accelerated Approval for adagrasib for the treatment of adults with KRAS G12C mutated locally advanced or metastatic non-small cell lung cancer patients. If it can even get its other drug MRTX1133 through the clinical and ultimately approved, then that would be good in targeting the KRAS G12D mutation. However, despite this type of help being offered to these patients with tumors that harbor such mutations, there is one major problem. What is that? That problem is that there is still a problem with duration of response. That is, a KRAS inhibitor as a monotherapy is just not enough to completely eliminate tumors . Even with these KRAS-mutated tumor patients receiving MRTX1133 alone, it wasn't even enough to induce CD8+ T-cells.

Neither immunotherapy nor MRTX1133 alone are going to be enough to combat the tumor microenvironment [TME]. There is going to be the need for a combination approach for sure. Thus, this is where another expansion opportunity comes into play for this biotech. The goal for Mirati is to combine several types of immunotherapies together with adagrasib or MRTX1133. Initial monotherapy data is expected first in the 1st half of 2024. If everything goes well with respect to this portion of the study, then the evaluation of combination therapies is likely next. It is expected to initiate a phase 3 combination study by end of 2023. That is, it is going to evaluate the use of adagrasib in combination with KEYTRUDA [pembrolizumab] for the treatment of 1st-line NSCLC patients with KRAS G12C mutation in a phase 3 study. One important thing to note is that the goal of this particular study is to recruit patients who have a tumor proportion score [TPS] score of ? 50%.

Financials

According to the 10-Q SEC Filing , Mirati Therapeutics had cash, cash equivalents and short-term investments of approximately $779.4 million as of June 30, 2023. It believed that this would be enough cash on hand to fund its operations for at least 12 months from the date of this 10-Q SEC Filing. However, it should be good on cash for now, especially since it just completed an upsized public offering. The total gross proceeds raised from this offering was approximately $345 million , before deducting expenses. Regardless, this biotech still has the ability to raise cash again if it needs to in the coming months. That's because it has an "At The Market Facility" it can tap into if it needs to. That is, it can from time to time sell shares of its common stock. The Agreement was made to sell an aggregate of $500 million worth of shares. However, as of June 30, 2023, about $345 million remains available for sale.

Risks To Business

There are several risks that investors should be aware of before investing in Mirati Therapeutics. The first risk to consider would be with respect to the sNDA of adagrasib for the treatment of third line and beyond colorectal cancer patients who harbor the KRAS G12C mutation. It is expected that the completion of this sNDA will happen by the end of 2023. There is no guarantee that the label of adagrasib will be expanded to include this additional patient population. A second risk to consider would be the advancement of MRTX1133 for the treatment of tumor patients who harbor the KRAS G12D mutation. Even though adagrasib was able to do well in human trials, there is no assurance that MRTX1133 will perform similar or better. A third risk to consider would then be the third expansion opportunity that I highlighted above, which is with respect to the combination treatments being tested. Preclinical models suggest that combining MRTX1133 with immunotherapy allows for a far more durable response. There is no assurance that this same finding will be shown in humans in clinical testing.

Conclusion

Mirati Therapeutics has done well to advance the use of its drug adagrasib for the treatment of KRAS mutant tumors. Specifically, it has already received Accelerated Approval from the FDA for KRAS G12C mutated non-small cell lung cancer [NSCLC] patients and is on track to potentially expand the label to include KRAS G12C mutant colorectal cancer patients. The completion of the sNDA of adagrasib for this indication before year-end might make this possible. Not only that, but the company is already thinking about combination approaches, which I believe is a very good thing. Lastly, it has the potential to expand the tumor types it is going after by targeting another oncogenic KRAS mutation, which is KRAS G12D. The targeting of this type of mutation will allow it to capture a larger chunk of other tumor types. I listed the pancreatic cancer tumor type example above, whereby it is said that KRAS G12D mutation is observed in 67.6% of pancreatic cancer patients. Whereas, the KRAS G12C mutation is only found in up to 2% of pancreatic cancer patients. With continued advancement of adagrasib and MRTX1133, plus the potential to improve clinical outcomes through combination approaches, I believe that investors might be able to benefit from any potential gains made here.

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