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Biotechnology investing is always a challenge, as many retailer investors buy in on the runs up, only to get hit by the failures of the trials. Many investors hear of the millions made on investments like DNDN, CELG, and ITMN (until it cratered by the FDA denial), but betting on a company without understanding the science is a sin. As a scientist, I do not advocate putting large sums into biotech picks, but putting some funds into companies that have a shot (and knowing when to invest) is what I try to do. Not all will be winners, but if a few are sound in the scientific field, money can be made. Take our last small biotech pick in the cancer arena, ImmunoGen (IMGN) – it is up from my August 29th writing from $5.75 (high of the day as we got in at a better price) to $7.44. We used a buy write strategy selling the January $6 Calls and Puts, so as long as IMGN holds $6 through January 2011, one will pocket 33%. Even selling a covered call would put one up 19%. This is our objective at PSW, letting investments come to us by doing simple plays and resting easy at night. I have been talking about Curis in member chat for awhile, and we bought and sold them in the beginning of the year. I now think the time is right for double dipping and taking a chance on a cancer treatment that could make a splash early next year.
Curis (NASDQ:CRIS) is developing targeted small molecule drug candidates for cancer indications where there are substantial unmet therapeutic needs. In 2000, Curis began operations in the merger of Creative BioMolecules, Ontogeny and Reprogenesis.
In the Company's virtual portfolio, the Hedgehog pathway inhibitor program (in collaboration with Genentech/Roche) is its most advanced program with lead small molecule candidate, GDC-0449. GDC-0449 is currently being tested in a pivotal Phase II clinical trial in advanced basal cell carcinoma as well as several other trials in collaboration with Genetech and the National Cancer Institute. More recently, in a Phase II clinical trial in advanced ovarian cancer (as a single agent maintenance therapy), the compound failed to excite Roche in its endpoints, and 'preliminary findings from the primary analysis of the study warrant additional investigation to clarify and interpret potential clinical activity of the drug candidate observed in this trial' (that's a mouthful). Basically, it did not work, but are there a subset of patients that did respond? This is the question at hand, but another big trial is in basal cell carcinoma.
Table 1. Clinical Trials of GDC-0449.
I think it is very important to understand the science behind the Company's lead molecule and where the better bets can be placed. Many of the hedgehog trials are long shots, but risks for cancer development need to be taken (if that's what the market wants), and there are plenty of shots on goal for GDC-0449.
Since their isolation in the early 1990s, members of the Hedgehog family of intracellular signaling proteins have come to be recognized as key mediators of many fundamental processes in embryonic development. Their activities are central to the growth, patterning, and morphogenesis of many different regions within the body plans of vertebrates. The hedgehog gene (Hh) was first identified in 1978 by Wieschaus and Nusslein-Volhard. Their research led to them winning the Nobel Prize in 1995 along with developmental geneticist Edward B. Lewis. The scientists identified genes that control the segmentation pattern of fruit fly (Drosophila melanogaster) embryos, and when the Hh gene was 'removed' the mutant phenotype causes the embryos to be covered with small pointy projections (denticles), resembling a hedgehog.
Figure 1. Denticle bands on a fruit fly after 'knocking out' hedgehog (from Google Images).
In mammals, investigations revealed three genes, desert hedgehog and Indian hedgehog, which were named for species of hedgehogs, and Sonic hedgehog – named after (you guessed it), Sega's video game character Sonic the Hedgehog.
Figure 2. When Hh is bound to Patched (PTCH), Ci protein is able to act as a transcription factor in the nucleus (from Wiki).
How do the hedgehog (Hh) proteins work? In Figure 2, when Hh binds to its receptor (Ptch1), the signaling pathway gives cells information needed that generate other signals which, in turn, make an embryo develop properly (i.e., cells divide, the embryo grows…etc etc). Similarly, in cancer, Hh signaling can lead to unregulated activation of the pathway and therefore stimulating the cancer to grow and/or metastasize (move from lung to brain, for instance). Thus inhibiting the Hh pathway should help 'regulate' a cancer, and GDC-0449 is CRIS's anwer to inhibiting this process (actually inhibits the SMO protein in red in Figure 2). Now, inhibition will not work in all cancer types and it definitely won't 'kill' the cancer, because not all cancers use this pathway for 'growing', but slowing it down for other agents would be a different story. So, CRIS and its collaborators have targeted several cancer types, and the most promising two are:
- metastatic basal cell carcinoma (BCC) – basal cells carcinomas are normally treated by surgical removal, but some cannot be due to location, size, etc. Of 33 patients in a phase Ib/IIa trial with locally advanced or metastatic tumors, 18 had a response to GDC- 0449. Of the remaining 15 patients, 11 had stable disease for up to 10.8 months, and 4 had progressive disease. The pictures of those that did respond are impressive (NEJM 2009, D Von Hoff et al).
- medulloblastoma – a single (far reaching, but transient effects) patient who had aggressive cancer was treated with a high dose of GDC-0449 and the autoradiography showed some 'regression' of the tumors. The patient did die, but if the cancer can be caught earlier on, maybe the pathway can slow down the cancer (CM Rudin et al, NEJM 2009).
For CRIS, waiting for the 2011 BCC data will be nail biting, but if one gets in here wait for the run up, one can take advantage and hopefully reap the rewards.
Other pipeline small molecules:
- Curis' second candidate under collaboration is Debio 0932 (formerly CUDC-305), an Hsp90 inhibitor, that the Company licensed to Debiopharm Group in August 2009 and that is currently in Phase I clinical testing.
- Curis recently completed a Phase I clinical trial of CUDC-101, a first-in-class inhibitor of HDAC, EGFR and Her2. The Company also initiated in August 2010 a Phase Ib expansion trial of this molecule in patients with gastric, head and neck, breast and liver cancers and plan to initiate a Phase I/II clinical trial in head and neck cancer during the second half of 2010. HDAC inhibitors are on the market for CTCL.
- Additional internal resources are deployed on developing additional small molecule targeted cancer drug candidates.
I am long CRIS and continue to accumulate on dips below $1.30. Join us in member chat at PSW (link) and see how we play the Wall Street game!
Disclosure: I own shares of CRIS
