2023-11-14 18:50:05 ET
Summary
- PMV Pharmaceuticals' phase 1/2 trial of its drug, PC14586, in solid tumors with a Y220C p53 mutation produced initial data in 2022, but the response was mixed.
- A 2023 update on data from the phase 1/2 trial is a net positive, in my opinion, with confirmation of the benefit of PC14586 in more patients.
- PMVP is enrolling a combination study of PC14586 with pembrolizumab, which could expand the addressable market for the drug and provide a 2024 catalyst.
In late August, I discussed PMV Pharmaceuticals ( PMVP ), and their drug PC14586, a p53 reactivator that works on the Y220C mutant of p53, which is found in about 1% of solid tumors. I rated the company a buy at the time, heading into updated data from a phase 1/2 PYNNACLE study of the drug in various solid tumors. While I found the updated data, reported in October, to be a net positive, the sentiment around PC14586 has remained negative, and the stock has traded down, creating a potential buying opportunity.
The 2022 update on PYNNACLE
With a 2022 update from PMVP's phase 1/2 PYNNACLE study of PC14586 in advanced solid tumors with a p53 Y220C mutation, PMVP did produce some responses but was having to dose the drug at quite high levels to achieve a benefit. While one patient achieved a benefit from the drug at 1150 mg once a day, most of the patients achieving a partial response took higher doses than that. Some patients in the trial took PC14586 at up to 1500 mg twice a day (3000 mg total). The high dose was an obvious potential cause of some of the adverse events seen, for example, dose-limiting toxicities were seen in two patients at 1500 mg twice daily; a grade 3 increase in AST (aspartate transaminase) and ALT (alanine transaminase), and a grade 3 acute kidney injury. One patient also had a grade 4 case of immune thrombocytopenia. The 1500 mg twice-daily dose was determined as the maximum tolerated dose.
PMVP then, had reported an overall response rate ((ORR)) of 8/25 (32%) in evaluable patients at the higher doses (1150 mg or above), and an ORR of 8/33 (24%) across all dose cohorts.
The 2023 update on PYNNACLE
With the 2023 update , PMVP provided data from more patients, many of whom were dosed at 2000 mg once a day. One downside is that the company noticed the drug is effective in patients with wild-type KRAS, not mutant KRAS. PMVP notes however, that ~90% of patients with a Y220C mutation of p53, are KRAS wild-type, meaning only 10% have a KRAS mutation and wouldn't be eligible for PMVP's phase 2 work. Nonetheless, a 10% restriction in the addressable market isn't a positive.
The positive though is that PMVP has maintained a good ORR but in a larger dataset. This time, 51 patients were evaluable for efficacy at doses of 1150 mg per day, to 1500 mg twice a day, 38 of whom had wild-type KRAS. Among those 38 patients, there were 13 partial responses, yielding a 34% ORR. In the subset of those patients treated with the phase 2 dose specifically of 2000 mg a day, 6/16 (38%) had a partial response, yielding a 38% ORR.
What PMVP has to offer then is a drug that could give you a partial response, and did so in 13/38 patients treated with relevant doses. Meanwhile, while there has been concern over PC14586's side effects, such as liver enzyme elevation, PMVP does not report any cases of Hy's law cases. Hy's law occurs with combined elevations in ALT (ALT > 3 times the upper limit of normal, ULN) and bilirubin (bilirubin 2 > ULN), without concurrent alkaline phosphatase elevation (ALP < 2 ULN). Hy's law predicts severe hepatotoxicity .
There does seem to have been additional grade 3 events, including another case of acute kidney injury, but there remains only one grade 4 event, and this is in exchange for about a 30% ORR rate, in patients with a median of 3 prior systemic therapies for their cancer. If I were a patient having exhausted first or second line therapy, and the third line involved additional rounds of chemotherapy and alternate chemotherapy regimens, I'd seriously consider a 30% chance of a partial response, in exchange for a rate of grade 4 events of 1.5%. Of course in the end it is survival that matters, and PMVP's data isn't in enough patients once we look at individual cancer types to compare it to relevant control data, so we might have to wait a bit for that.
The road ahead
With the End of Phase 1 meeting held with the US Food and Drug Administration (FDA), PMVP has achieved alignment with the FDA on a single-arm study. That means PMVP isn't going to go head-to-head with standard-of-care or another therapy. In phase 1, PMVP saw an ORR of 7/15, or 47%, in ovarian cancer patients (with KRAS wild-type) treated with 1150 mg daily to 1500 mg twice daily. As such, the odds of PMVP's PC14586 performing in cohort 1 (ovarian cancer patients) of its phase 2 study seem pretty good.
Indeed PMVP notes that in second line and beyond in ovarian cancer, the standard of care produces an ORR of <12%. A similar story is seen in lung, breast, and endometrial cancer. If PC14586 continues to produce ORRs in the 30% range, then it is going to look good compared to the current standard of care in many of these patients.
In the meantime, PMVP is already enrolling a combination study of PC14586 with an immune checkpoint inhibitor, pembrolizumab.
The combination work adds a catalyst to the 2024 calendar for PMVP and is an opportunity to show a benefit of the drug, perhaps in earlier lines of therapy, which would only expand the addressable market for the drug.
Financial Overview
PMVP had $238.1M in cash, cash equivalents and marketable securities as of September 30, 2023. R&D expenses were $13.6M for Q3'23 and G&A expenses were $6M in the same quarter. Net loss was $16.6M in Q3'23 and net cash used in operating activities was $43.6M in the first nine months of 2023. At this rate then, PMVP would have 16 quarters of cash left from the end of Q3'23. PMVP isn't predicting cash to last four years however, with a phase 2 study in 100 patients, and the combination work ongoing, I expect cash burn to pick up. Even if PMVP's cash burn quadrupled (I don't know why this would happen going from a 78-patient study to a 114-patient study), the company could still make it 12 months to a readout from the combination work, so cash simply isn't a near-term concern. Indeed PMVP's 10-Q notes that (pg. 6), "The Company believes it has adequate cash, cash equivalents, and marketable securities to operate for the next 12 months from the date of issuance of these financial statements."
PMVP used its at-the-market facility ((ATM)) to raise $35.1M in the first nine months of 2023, and so the possibility of raising additional funds heading forward, especially if a run-up occurs, to shore up cash reserves a bit, is in play. Indeed PMVP ran up from April 2023 into the 2023 update from its clinical trial.
As of November 7, 2023, PMVP had 51,157,636 shares of its common stock outstanding corresponding to a market cap of $103.85M. There were also options outstanding to purchase 7,174,552 shares worth of PMVP's common stock as of September 30, albeit with a weighted average exercise price of $9.22.
Conclusions
I rate PMVP a strong buy as I like the data seen with PC14586, even if the initial market response wasn't positive, the stock has traded back up from prices as low as the $1.20s following the clinical update, to the $2 range for a reason. I believe we could continue to see a run-up into data from combination work with pembrolizumab, which is another opportunity for the company to show the benefit of the drug.
The risks to any long trade are severalfold, however. Firstly, if PMVP delays the readout from the combination work, the stock could trade down as traders and investors exit.
Secondly, although PMVP hasn't provided a more specific timeline on the readout from the combination work, if it reports it earlier in the year, before much of a run-up occurs, and it is not received well, then the stock could trade down because it would then be a long wait until further data.
Lastly, if PMVP doesn't get underway with its phase 2 study of PC14586 in Q1'24 as anticipated, that would move initial data, currently slated for 2025, even further into the future, and any potential approval would also be perceived as moving further into the future.
For further details see:
PMV Pharmaceuticals: In A Stronger Position Now Than Before, At A Lower Price