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Remember The 3 Ps: Patience, Perseverance And Pharmacyclics

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Patience and tenacity are worth more than twice their weight of cleverness, said Thomas Huxley, a pioneering biologist and educator. Wouldn't this hold even more true for investors in Pharmacyclics Inc. (PCYC) who are seeing their patience and perseverance pay off?

More than three years ago - in February of 2010, when we alerted readers to Pharmacyclics, it was trading around $4, and since then there has been no looking back for this stock. PCYC breached the $100 mark for the first time on Wednesday (July 10), and touched a new high of $102.05 before closing the day's trading at $100.26.

The company's lead oral drug candidate is Ibrutinib, an inhibitor of an enzyme called Bruton's tyrosine kinase, which is being developed in partnership with Johnson & Johnson's subsidiary Janssen.

Ibrutinib, formerly known as PCI-32765, is in clinical testing in several B-cell malignancies, including chronic lymphocytic leukemia/small lymphocytic lymphoma, mantle cell lymphoma, diffuse large B-cell lymphoma, follicular lymphoma, Waldenström's macroglobulinemia and multiple myeloma.

The company submitted a New Drug Application to the FDA for Ibrutinib seeking approval in the indications of mantle cell lymphoma and chronic lymphocytic leukemia /small lymphocytic lymphoma yesterday (July 10) based on results from phase II studies.

Pharmacyclics has also requested Priority Review for Ibrutinib NDA.

It should be noted that the FDA has granted Breakthrough Therapy Designation for Ibrutinib as a monotherapy for the treatment of patients with relapsed/refractory mantle cell lymphoma, and for the treatment of patients with chronic lymphocytic leukemia/small lymphocytic lymphoma with deletion of the short arm of chromosome 17. This prestigious designation is intended to accelerate the approval process.

Last month, the company announced promising results from a phase II study of Ibrutinib as a monotherapy in patients with relapsed/refractory diffuse large B-cell lymphoma (DLBCL). The results indicated that Ibrutinib monotherapy was an effective treatment for patients with the ABC-subtype of DLBCL, a subtype, which is difficult to treat.

Pharmacyclics also presented positive results from a phase II study evaluating Ibrutinib in patients with Waldenstrom's Macroglobulinemia in June of this year.

Waldenstrom's Macroglobulinemia belongs to a family of cancers classified as non-Hodgkin lymphoma with an incidence in the U.S. and Europe of roughly 3-5 cases a year per million people. There are currently no approved treatments specifically for Waldenstrom's.

According to the company website, to date, 7 phase III trials have been initiated with Ibrutinib, and enrollment has been completed in 1 phase III study, dubbed RESONATE .

The RESONATE study is evaluating Ibrutinib monotherapy versus Ofatumumab in patients with relapsed or refractory chronic lymphocytic leukemia / small lymphocytic lymphoma, and enrollment was completed as recently as April of this year, achieving the enrollment target of 350 patients. A read out from the interim analysis of the trial is expected during Q1-2014.

A phase III study of Ibrutinib versus Chlorambucil in frontline newly diagnosed elderly chronic lymphocytic leukemia / small lymphocytic lymphoma patients, called RESONATE-2, enrolled its first patient at the end of Q1 of 2013. Enrollment in this study is expected to be completed by the end of Q3 of 2014.

Also in the pipeline are:

Abexinostat (PCI-24781) under phase II study in relapsed/ refractory follicular lymphoma and mantle cell lymphoma. Pharmacyclics entered into a global strategic alliance with French pharmaceutical company Les Laboratoires Servier in April 2009 for developing PCI-24781.

PCI-27483, an inhibitor of clotting factor VIIa Factor, in phase II clinical testing for the treatment of pancreatic cancer. Under a license agreement signed in October 2012, Novo Nordisk acquired the exclusive worldwide rights for Pharmacyclics' PCI-27483 in a restricted disease indication outside of oncology.

Financial Numbers...

Pharmacyclics has incurred significant operating losses since inception, and, as of March 31, 2013, had an accumulated deficit of $335.5 million. The company has not generated any commercial revenue from sales of its products to date. Revenue is recognized from collaboration and license agreements. The company's fiscal year ends in December.

In the first quarter ended March 31, 2013, the company's net loss widened to $28.3 million or $0.40 per share from $9.3 million or $0.14 per share in the year-ago quarter, on a non-GAAP basis. Revenue in Q1-2013 rose to $2.85 million from $1.93 million in the comparable quarter last year.

The company ended Q1-2013 with zero debt and cash of $511.2 million.

Stock Tale...

Founded in 1991, Pharmacyclics went public in October 1995, offering its shares at $12 each. The stock has gained an impressive 73.5% in the year-to-date period.

Can PCYC continue to rally or will it pare gains? Play it safe.

Related reading

A Second Look At Pharmacyclics

Revisiting Pharmacyclics

by RTT Staff Writer

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