Daiichi, AstraZeneca Drop on Concern Over Lung-Cancer Drug

Daiichi Sankyo Co. and partner AstraZeneca Plc shares fell the most in years after a study of their highly-anticipated lung cancer medicine raised questions about its safety and effectiveness.

(Bloomberg) — Daiichi Sankyo Co. and partner AstraZeneca Plc shares fell the most in years after a study of their highly-anticipated lung cancer medicine raised questions about its safety and effectiveness. 

While the drug significantly slowed progression of the most common form of lung cancer more than standard chemotherapy, it hasn’t yet improved overall survival rates, Daiichi and AstraZeneca said in a statement late Monday. There were also some adverse reactions that led to patient deaths, the companies said, using the technical term of Grade 5 events. No further details were given. 

Daiichi fell 15% in Tokyo trading Tuesday, its biggest drop since 2008, while Astra declined 8% in London on Monday, the most since March 2020. 

Investors anticipated a clearer statement on the success of the trial, which has a dual goal of proving the drug’s ability to fight cancer and reducing the risk of dying from it. AstraZeneca’s description of the results suggests the benefit is less pronounced than expected, Jefferies analysts wrote in a note.

The study remains underway after the interim analysis, and more mature results could show the treatment’s effect increases over time. 

Precision Chemotherapy

Scientists and doctors have been trying to develop a precise way to deliver chemotherapy for decades, allowing them to avoid the current approach that involves blasting the whole body and killing good cells as well as bad. Astra’s drug — known as datopotamab deruxtecan, or Dato-DXd — ferries a powerful chemotherapy directly to tainted cells to kill the cancer, while sparing their healthy counterparts.

The two companies previously developed a cancer treatment that works similarly and became the star of the class of drugs called antibody drug conjugates, or ADCs. The medicine Enhertu extends the lives of breast cancer patients with few treatment options and is on track to generated more than $10 billion annually. The results of a study examining whether Enhertu can safely replace chemotherapy as the first line of treatment for breast cancer is due by September. 

Astra agreed to pay as much as $6 billion for the right to develop both cancer therapies with Daiichi Sankyo as part of a broader bet to revive growth a decade ago by building a pipeline of oncology drugs. Dato-DXd could garner as much as $18 billion in sales, while Enhertu may generate $12.5 billion, Jefferies analysts have estimated. 

What Bloomberg Intelligence Says:

“AstraZeneca’s reported successful outcome for Dato-DXd in the Tropion-Lung01 study comes with limited details and is concerning due to reports of “some Grade 5 toxicity events” (IE deaths), in particular given that this drug dose apparently saw no such issues in the Phase 1 Tropion-PanTumor01 trial. Also, though progression-free survival benefit was reported as statistically significant, the lack of numerical detail — a minimum 2-3 month benefit was targeted — will lead to questions regarding clinical significance. Given peak sales estimates of $10 billion, Astra shares could be under pressure today.” — John Murphy, BI pharma analyst

Safety Concerns Arise Amid Positive Astra Dato-DXd Data: React

AstraZeneca was expected to say the data were “clinically meaningful,” to give a sense that the drug was giving patients several more months of survival, according to Emily Field, an analyst at Barclays.  

Instead, it said the data showed an “early trend” that signaled a survival benefit, though it didn’t meet the threshold for statistical significance at this time.

Companies rarely provide detailed results in press releases. Astra said the finding of the latest trial will be shared with health authorities and presented at a forthcoming medical meeting. 

Not everyone agreed on the significance of the study. 

Dato-DXd will probably still be approved by regulators, but the results may open the door to a rival treatment from Gilead Sciences Inc., said Hiroshi Wada, an analyst at SMBC Nikko Securities Inc., in a note Monday. That medicine, known as Torodelvy, could win approval first and take market share, he said.

Hidemaru Yamaguchi, an analyst at Citigroup Global Markets Japan Inc., says the results are positive and Daiichi stock is oversold. 

“There’s still a chance for the companies to show statistical significance when the analysis is completed,” he said.  

Still, the lack of robust early signs of improved survival could be a setback for efforts to fine-tune the use of chemotherapy for treating lung cancer, the second-most common cancer worldwide. More than 2.2 million new cases were recorded in 2020, according to the World Cancer Research Fund.

–With assistance from Suzi Ring and Grace Huang.

(Updates share price in third paragraph.)

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