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Analysis: Cell Genesys Soars on GVAX

Posted on: Thursday, 5 April 2007, 00:00 CDT

By STEVE MITCHELL

Cell Genesys shares jumped 32 percent Tuesday on phase 2 results showing GVAX extended survival of prostate cancer patients by nearly three years.

Joe Pantginis, an analyst with Canaccord Adams, told United Press International the results coupled with a previous phase 2 study indicate GVAX may be better than both the current standard of care, Taxotere, and Dendreon's Provenge, which was endorsed last week at a Food and Drug Administration advisory committee meeting.

GVAX outperforms Taxotere and Dendreon's Provenge, Pantginis said.

He noted that all the usual caveats about phase 2 studies still apply, but added that two independent phase 2 studies indicating the same result help support the contention Cell Genesys is onto something.

The safety profile looks good, too, Pantginis said, noting that the biggest issues were injection site reactions and flu-like symptoms, which can actually be a good sign because they indicate the product is activating the immune system as intended.

The FDA had raised safety concerns about Provenge due to a possible increased risk of stroke, but the agency's cellular, tissues and gene therapy advisory panel voted unanimously to give it a clean bill of health.

The Provenge recommendation combined with these phase 2 results for GVAX may help disperse the black cloud that had been hanging over the cancer immunotherapy space for so long.

It's been a very big change in sentiment, Pantginis said.

In the phase 2 trial, 22 patients with metastatic hormone-refractory prostate cancer who received the dose of GVAX now being evaluated in phase 3 trials had a median survival of 35 months. If this holds true in the phase 3 trials, it would be a significant improvement over Taxotere plus prednisone, which has a median survival of 18.9 months, and Provenge, which has a median survival of 4.5 months.

Cell Genesys said the new results were comparable to the first phase 2 trial of GVAX, which involved 34 patients and found a median survival of 26.2 months.

We are certainly encouraged by the survival data from the second phase 2 trial of GVAX immunotherapy for prostate cancer, said Rob Dow, Cell Genesys' chief medical officer. We continue to hope that GVAX immunotherapy for prostate cancer may some day offer a new treatment option for patients with this disease.

After climbing 32 percent to $5.70 on Tuesday, Cell Genesys shares closed at $5.20 Wednesday.

GVAX is now in two larger phase 3 studies that plan to enroll more than 1,200 patients and should help to better assess the potential of the biologic.

Pantginis said enrollment should be completed about mid-year for the first study, which should put Cell Genesys on track to file in 2009.

He forecasts GVAX could be a blockbuster ultimately. Initially, the approval would probably be limited to late-stage prostate cancer, which should see the compound generating $600 million in global sales.

But earlier use of GVAX will probably ramp up sales to more than $1 billion, he said.

Pantginis also noted that GVAX, which he forecasts costing about $20,000 per year, may have a price advantage over Provenge.

This is because GVAX, which is comprised of two prostate cancer cell lines modified to secrete an immune stimulatory hormone, is relatively easier to manufacture and can be used straight off the shelf, whereas Provenge requires drawing blood from the patient and processing it elsewhere before it is injected back into the patient.

So Provenge is a bit cumbersome and potentially more costly, Pantginis said.

Pamela Bassett, an analyst with Cantor Fitzgerald, also liked the phase 2 results and the potential of Cell Genesys' biologic.

GVAX prostate continues to deliver positive clinical results, Bassett stated in a research report. We expect prompt progress on its regulatory path, with its SPA and Fast Track designation, potentially during the same timeframe as FDA's review of Provenge's data from its ongoing 500-patient trial.

Overall, Bassett likes Cell Genesys' outlook.

We think Cell Genesys delivered a solid quarter overall and expect continuing progress in its late stage trials and partnering, she stated. As such, we think (Cell Genesys) remains undervalued and reiterate our 'buy' rating.

Source: United Press International

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