OLMA - Olema: Two-Pronged Approach To Treat Breast Cancer Patients

2023-09-18 15:20:36 ET

Summary

• Initiation of the pivotal OPERA-01 study, using palazestrant for the treatment of 2nd-line/3rd-line HR+/HER2- metastatic breast cancer patients, expected in Q4 of 2023.
• Monotherapy results from the phase 2 study, using palazestrant for the treatment of 2nd-line/3rd-line HR+/HER2- metastatic breast cancer patients, to be presented at ESMO Congress in October of 2023.
• Palazestrant in 2nd-line/3rd-line HR+/HER2- mBC cancer setting could be a $5 billion+ opportunity; However, should combination of palazestrant and CDK4/6 inhibitor achieve success, then it would be $10 billion+ opportunity.
• With recent $180 million in funding, Olema Pharmaceuticals, Inc. believes it has enough cash to fund its operations into 2027.

Olema Pharmaceuticals, Inc. ( OLMA ) has made great progress in being able to advance the use of palazestrant for the treatment of patients with metastatic breast cancer. It is gearing up to start a pivotal study, to be known as OPERA-01, which is expected to start in Q4 of 2023.

However, there are other catalysts to look forward to before the end of 2023. It is expected that Olema will release results from a phase 2 monotherapy study as an oral presentation at the European Society for Medical Oncology [ESMO] Congress 2023, which is expected on October 22nd 2023. Not only is the company testing palazestrant alone as a monotherapy, but it is also testing it in combination with two other CDK4/6 inhibitors in two studies. One study is the combination of palazestrant in combination with palbociclib, and then the other study is with the combination of ribociclib, with data from each expected to be released from both in Q4 of 2023. With several catalysts on the way before the end of 2023, plus a two-pronged approach to treating HR+/HER2- metastatic breast cancer.

Palazestrant Has A Two-Pronged Approach To Treating Breast Cancer

As I noted above, this biotech has made extensive progress in being able to advance its drug palazestrant for the treatment of patients with HR+/HER2- metastatic breast cancer. Speaking of which, it is expected to use this drug in a phase 3 pivotal study alone as a monotherapy to treat 2nd-line and third-line metastatic breast cancer patients. Such a pivotal study, known as OPERA-01, is expected to start in Q4 of 2023. As I noted above, what makes this biotech's approach to treating breast cancer may end up paying off. That is, it targets both domains on the estrogen receptor AF1 and AF2. Some drugs only target the activation of transcription that occurs on AF2, but not AF1 activity. That is, the goal to block activity of the entire signaling pathway and not just one part of it. Thus, the two-pronged approach I noted above in the beginning of this article, which is:

• Complete estrogen receptor antagonist
• Selective estrogen receptor degrader.

It is believed that by taking this approach, that not only can greater anti-tumor activity be achieved but also a more durable response as well. There is a catalyst expected with respect to this particular program. It is expected that results from the phase 2 monotherapy study will be presented as an oral presentation at the European Society for Medical Oncology [ESMO] Congress 2023 on October 22nd 2023. The hope is that palazestrant can become the new best in class endocrine therapy, which remains as the backbone treatment for HR+ breast cancer.

Expansion Opportunities

Above I described the approach that Olema is taking in order to treat HR+/HER2- breast cancer. Again, to target the entire signaling pathway with respect to transcription that occurs in both the AF1 and AF2 domains, which leads to cancer cell progression for breast cancer. There is a way in which the blocking of cell growth/proliferation can be extended further and that would be with the addition of CDK4/6 inhibitors. The goal of these drugs are to inhibit proteins known as CDKs 4 and 6, but by doing this, what exactly is accomplished? It restores the ability for the retinoblastoma protein to bring back its ability to suppress cell growth. Thus, cancer cell proliferation can't continue.

Having said that, Olema has been able to start testing palazestrant in combination studies. One phase 1b/2 clinical study is the use of palazestrant in combination with Pfizer ( PFE ) CDK4/6 inhibitor palbociclib [IBRANCE], and the other phase 1b study is exploring palazestrant in combination with Novartis ( NVS ) ribociclib [KISQALI] for the treatment of patients with breast cancer. Results from both of these early-stage combination studies are expected to be released in Q4 of 2023. While the targeting of 2nd-line/3rd-line HR+/HER2- metastatic breast cancer patients with palazestrant is a 5 billion + commercial market opportunity, the combination of this drug with a CDK4/6 inhibitor targeting the 1st line metastatic breast cancer combination could be a $10 billion+ commercial opportunity. Thus, the importance of Olema exploring palazestrant combination to target an even large market opportunity.

Financials

According to the 10-Q SEC Filing , Olema Pharmaceuticals had cash, cash equivalents and marketable securities of $167.4 million as of June 30, 2023. It is believed that this would be enough cash on hand to fund its operations into Q2 of 2025. However, the biotech was able to obtain additional funding in September of 2023 . That is, it was able to enter into a stock purchase agreement for a private placement of approximately $130 million of common stock. In addition, it also secured a senior secured credit facility for $50 million as well.

With the cash on hand it had beforehand, plus the new addition of $180 million in new funding, it shouldn't have a need to raise any cash for the next few years. Matter of fact, with the newly added cash, Olema believes it has enough to fund itself into 2027.

Risks To Business

There are several risks that investors should be aware of before investing in Olema Pharmaceuticals. The first risk to consider would be with respect to the advancement of palazestrant in the soon to be initiated phase 3 OPERA-01 study. Even if this late-stage study is initiated, there is no guarantee of a positive final outcome.

A second risk to consider would be with respect to the two ongoing phase 1b combination studies, which are using palazestrant in combination with IBRANCE and KISQALI. Results from both of these studies are expected in Q4 of 2023. There is no guarantee that one or both of these studies will end up achieving positive results and thus, the stock could trade lower because of it.

The third and final risk to consider would be with respect to the upcoming release of results from the phase 2 monotherapy to be presented at an upcoming medical conference. There is no guarantee that the results to be presented at this ESMO Congress 2023 will end up being positive, nor that it will cause the stock price to trade higher.

Conclusion

Olema Pharmaceuticals has made extensive progress in advancing the use of its drug palazestrant for the treatment of patients with HR+/HER2- metastatic breast cancer. One thing to note about this biotech is that it has the ability to use its drug for both the 2nd-line/3rd-line HR+/HER2- metastatic breast cancer setting [$5 billion+ opportunity] and then the 1st-line HR+/HER2- metastatic setting [$10 billion+ opportunity]. It has been able to obtain two financing transactions, which have brought an additional $180 million in funding. This was recently achieved and should extend its cash runway into 2027.

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