CAVATAK

CAVATAK

The Science

CAVATAK or Coxsackievirus A21 (CVA21) is an immuno-oncolytic therapy manufactured by Viralytics Ltd currently being investigated in a number of Phase I and II trials. 

The idea of infecting cancer cells with viruses is not new, infact it originated over a century ago. Viruses have been found to show certain affinities which predispose them to infect certain cell types. Their main mode of action is through infiltration and replication within the tumour mass leading to oncolysis or bursting of the cancer cells.

CAVATAK's mechanism of action is through the required binding of intercellular adhesion molecule-1 (ICAM-1) and optional binding of decay accelerating factor (DAF) on the cancer cells surface.  ICAM-1 and DAF receptors are over expressed on malignant cells surfaces in comparison to normal
cells. This has been demonstrated in melanoma, breast, colon, endometrial, head and neck, pancreatic, and lung cancers so far.
After attaching to ICAM-1 or DAF on a cell’s surface, the virus is able to enter the cancer cell, multiply, and eventually lyses the cell, releasing thousands of newly formed viral particles. The released particles target other cancer cells in the body, ultimately killing them as well. Cancer cell lysis also releases cancer cell proteins that are recognised by the body’s immune system, activating an anti-cancer immune response. However this immunogenic response is largely unknown and relies on the currently ongoing trials.

The Upside

The focus of CAVATAK has been Melanomas, Lung, Bladder and Colorectal Cancers which are the 6th, 2nd, 4th and 5th most common cancers respectively. The multiple administration routes also maximise applicability as the drug can be given intratumourally, intravenously and intravesically.
Currently CAVATAK is being explored as a single agent for late stage Melanoma and Bladder Cancer. It is also being researched in combination with a number of checkpoint inhibitors. The recent CALM trial demonstrated the efficacy and tolerability of CAVATAK as a single agent for patients with late stage melanomas. It was extremely well tolerated with no grade 3 or 4 or serious adverse events (the grade 1 and 2 adverse events were related to viral symptoms, as expected with a drug bio-selected from the common cold virus). The study was concluded successful with endpoint outcomes exceeding expectations. 

Cancer Type	Rank *	Estimated New Cases *
Lung	2nd	224,390
Bladder	5th	76,960
Melanoma	6th	76,380

*in 2016 in the USA

Lets hypothetically say that the drug was approved for single agent use in late stage Melanomas and Bladder Cancers. In 2016, the global market for cancer immunotherapies was valued at $36 Billion. If we divide the number of new cases of Bladder Cancer and Melanoma by the number of new incidences of all Cancers in 2016 (in the USA) we can determine the rough percentage of all new cases globally:

Bladder:  (76,960 / 1,695,210) x 100 = 4.54%
Melanoma: (76,380 / 1,695,210) x 100 = 4.50%

A very rough calculation using these percentages and the market opportunity for cancer immunotherapies would value the market opportunity for these cancers at:

Bladder: 4.54% of $36 Billion = $1,634,400,000
Melanoma: 4.50% of $36 Billion = $1,620,000,000

Also CAVATAK is used to treat Stage III/IV cancers, the percentage of these late stage cases is about 15% of total cases for Bladder Cancer and Melanoma.

Bladder: 15% of $1,634,400,000 = $245,160,000
Melanoma: 15% of $1,620,000,000 = $243,000,000

If CAVATAK was approved, the total market opportunity for the therapy could be around $488,160,000 each year. This doesn't take into account the combination therapy opportunity for CAVATAK which is arguably larger as CAVATAK up regulates the checkpoint molecules which have already been shown to have anti-tumour activity.
The market is also projected to grow at a CAGR of 14.8%, thus this opportunity could be worth an estimated $1.3 Billion by 2023.

However CAVATAK would not command a 100% market share as there are a number of existing treatments for these cancers. CAVATAK would have to prove to physicians that it gives patients a greater progression free survival (PFS) and a higher number of quality-adjusted life-years (QALY).

Lets say CAVATAK gained a conservative 10% Market Share of Melanoma and Bladder Cancer therapy initially which would increase as more physicians adopted the therapy if it was successful. CAVATAK would still be worth around $48,816,000 a year. Not taking into account any combination therapies or additional cancers that CAVATAK may treat which could be worth exponentially more.

CAVATAK is produced by Viralytics, which had a Market Cap of $226 million at the time it was acquired by MSD for $394 million, a premium of  about 174%. MSD is committed to exploring the potential of immuno-oncology and has one of the fastest development programs in the industry. I believe this acquisition was a strong one. MSD have gained a therapy to their portfolio that has passed Phase I and II trials for ~$400 Million. If you consider the price to bring a new drug to market is ~$1.2 Billion and CAVATAK only needs to pass Phase III Trials to gain market approval, it would appear MSD have gained an exciting new immunotherapy for a very cheap price.

The Downside

The obvious risk is that CAVATAK does not pass the Clinical Trial stage. The CALM Trial for use in Melanoma was successful with the primary safety endpoint achieved and the secondary efficacy endpoint exceeded. However all other current ongoing trials involving CAVATAK are in Phase I and even with exciting efficacy data there is still a long way to go. Currently, % Survival rate only appears to be significantly prolonged if CAVATAK is combined with a checkpoint inhibitor.

The main downside I have encountered is that adding Oncolytic Viral therapy to Immunotherapy is found to be cost prohibitive. The combination treatment which is arguably CAVATAK's best chance of success (combination with a checkpoint inhibitor) has little clinical benefit according to a cost-analysis on MedPageToday.

The article investigates whether combination therapy with the immunotherapy ipilimumab (Yervoy) plus an oncolytic tumor virus, talimogene laherparepvec (T-VEC) (Similar to CAVATAK), is cost-effective, offering significant benefits over monotherapy with ipilimumab to treat advanced Melanoma.

"Adding T-VEC to ipilimumab in advanced melanoma showed no marked difference in PFS over monotherapy. However, more patients treated with the combination showed an Overall Response (OR). But, there was a statistically non-significant Progression Free Survival (PFS) benefit of combination therapy over monotherapy, with a high incremental cost, and a cost-utility estimate of $1.5 million to $2.3 million per one additional quality-adjusted life-year (QALY) attained.

The combination required a $1.6 million supplemental cost to gain one additional QALY free from disease progression, and to have one additional individual reach an OR.

In the PFS analyses, the cost of combination therapy ($494,983) was almost quadruple that of ipilimumab monotherapy ($132,950), according to a study conducted by Ivo Abraham, PhD, of the University of Arizona in Tucson, and colleagues.

The associated incremental cost-effectiveness ratio (ICER) was $2,129,606 per PFS life-year, and the incremental cost-utility ratio (ICUR) was $2,262 706 per PFS QALY gained.

Importantly, all ICER and ICUR estimates "far exceeded" commonly employed willingness-to-pay thresholds, the researchers stated."

The cost of $2.2 million per PFS quality-adjusted life year gained is prohibitively expensive for both patients and insurers, and is at odds with both the real-world and theoretical costs per QALY of $25,000 and $50,000.

This analysis for combination therapy with the immunotherapy ipilimumab cannot be directly proportional to CAVATAK, however I would argue that the results would be similar. The cost of CAVATAK per 1 year PFS/QALY would be too high to justify at the current ORR.

The Conclusion

CAVATAK does seem to me to be a novel therapy that is perhaps just beginning a new stage of popularity due to advances in gene editing techniques. I believe the future potential of Immunotherapies, of which Oncolytic therapies seem like a promising avenue, are high. With an estimated 15% CAGR from 2016, the potential global market value of cancer immunotherapies is predicted to reach over $100 Billion by 2023. CAVATAK is a relatively early oncolytic immunotherapy and thus may just be paving the way for others to be developed. 

The price of CAVATAK treatment would need to cost under $65,000 for it to be adopted by physicians and thus allow MSD to gain a chunk of the market share. Amgen currently has an oncolytic herpes virus Imlygic costing $65,000 which shows impressive response rates in advanced Melanomas with minimal toxicities. 

I am going to watch this space.


-OC


Disclaimer:
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company who is mentioned in this article. This article is not investment advice, and can't be relied upon by anyone for any reason except, arguably, entertainment purposes. I am not an investment advisor.


Sources:

https://www.liebertpub.com/doi/full/10.1089/hum.2017.112
https://viralytics.com/wp-content/uploads/2018/02/180221-MSD-and-VLA-Acquisition.pdf
https://www.cancer.org/content/dam/cancer-org/research/cancer-facts-and-statistics/annual-cancer-facts-and-figures/2016/cancer-facts-and-figures-2016.pdf
https://seer.cancer.gov/statfacts/html/melan.html

https://www.marketwatch.com/press-release/cancer-immunotherapy-market-to-gain-us-1016-bn-by-2023-with-high-demand-of-cancer-immunotherapy-says-mrfr-2018-10-08

https://www.medpagetoday.com/dermatology/skincancer/76550https://immuno-oncologynews.com/cavatak-coxsackievirus-cva21/

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4918364/