Loxo tempers bullish view for cancer drug

Brazil yellow fever cases rise

STAMFORD, Connecticut, April 3, (Agencies): In record time, Loxo Oncology developed a novel drug for a wide variety of tumors that share a rare mutation. It recently struck a partnership with Germany’s Bayer. Its stock tripled in the past year.

But in an unusual move for biotech — where hype is often the norm — its founders are tempering expectations.

They are quick to point out that their task ahead is no small one: Getting doctors and insurers to agree to testing several hundred thousand cancer patients to find the one percent, or less, whose tumor has the mutation its drug targets.

“We’re very cautious about this because we understand that for all of these patients to be identified, broad testing across the spectrum of human cancer has to happen,” Jacob Van Naarden, Loxo’s chief business officer, told Reuters. “It’s an exquisitely rare patient population.”

Because of its small size and narrow focus, Loxo is among the most dependent on adoption of widespread genomic testing. But they aren’t alone. Bigger drugmakers, such as Roche Holding , are also working on treatments that depend on finding a mutation driving many different cancers.

Loxo, founded in 2013, leapt from obscurity last year. The turning point came at a major cancer conference in June, when it released data showing its pill, larotrectinib, shrank tumors significantly in 75 percent of patients with cancer in the lung, pancreas, colon or more than a dozen other locations.

Its stock skyrocketed and the company now has a market valuation more than $3 billion.

Loxo’s trial tested 55 advanced cancer patients, all of whose tumors had the mutation, TRK fusion. Many had run out of treatment options, while some were children facing limb amputations.

Wall Street analysts expect US approval this year and forecast annual larotrectinib sales reaching $500 million to $1 billion. Bayer, which expects to file for European approval this year, will help bring larotrectinib and a potential successor drug to market in a partnership worth up to $1.6 billion.

With Bayer in charge of pricing, the drug could cost $15,000 a month, said Bernstein analyst Wimal Kapadia.

In interviews at company headquarters in Stamford, Connecticut, Loxo executives addressed the hurdles ahead. For starters, “we don’t actually know how many patients there are,” Van Naarden said. An estimated 1,500 to 5,000 people may be candidates out of 500,000 U.S. cancer patients diagnosed each year.

To find them, new genomic tests will need to include the TRK fusion defect.

“These drugs will do well as people adopt this testing,” said Dr. David Hyman of Memorial Sloan Kettering Cancer Center in New York, who led larotrectinib clinical trials.

But getting doctors and pathologists across the country to order that testing is a significant hurdle.

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Brazil’s Health Ministry says 1,131 people have been infected with yellow fever in the largest outbreak the Latin American country has seen in decades.

The ministry has said that 338 people have died from the mosquito-borne disease. In the 2016-2017 outbreak, there were 777 cases and 261 deaths after years in which Brazil saw only a handful of cases each year.

The ministry says the current outbreak has grown so large because it is hitting densely populated areas.

While large swaths of Brazil have long been at risk for yellow fever, the current and previous outbreaks have hit areas not previously considered at risk for the disease and where vaccination rates were low. In response, Brazil has decided to vaccinate the entire population by April 2019.