Healthcare Wedbush On TESARO Inc (TSRO)

Wedbush On TESARO Inc (TSRO)

Published By News Desk at June 13, 2017 08:35 am Dr. Swisher did note that AstraZeneca has a strong patient access program in place to support Lynparza, and Wedbush awaits official sales reports in coming months to see what discounting trends are like for PARPs and how they are changing with Zejula and Rubraca entry

Wedbush held a call with Dr. Elizabeth Swisher, director the Breast and Ovarian Cancer Prevention Program at Seattle Cancer Care Alliance at U of Washington, an expert on targeted therapies for ovarian cancer and co-leader of ARIEL2 study. Dr. Swisher highlighted the increasing emphasis physicians and payors place on testing for molecular genetics of ovarian cancer and the role of PARPs; although a key takeaway was that many physicians consider PARP inhibitors to be interchangeable at the moment, the broad label and lack of requirement for a companion diagnostic for TESARO Inc.'s (NASDAQ:TSRO) Zejula should continue to support its use before other PARPs. She did mention that many physicians were uncertain on the suitability of using Zejula in the broad platinum-sensitive population, which the firm expects TSRO could address through marketing given its supportive clinical data. Zejula’s once-daily dosing (vs twice daily with Lynparza and Rubraca) was mentioned as an additional advantage, although higher thrombocytopenia risk was a concern. For Lynparza, its longer time on market and safer tox profile (supporting potential combo use with chemo) were cited as advantages, although the need to document a gBRCA mutation in patients was highlighted as a key limitation. No specific advantages were mentioned for Rubraca, although the doctor mentioned that could change with ARIEL3 readout later this month.  

Although early in launch phase, reimbursement for PARPs appears to be a non-issue, with Dr. Swisher noting that in her experience payors were not showing a preference for one PARP over another, and TSRO also recently reporting that most (75%) Zejula scripts were being adjudicated by the top four pharmacy benefit managers and Medicare Part D providers. Dr. Swisher did note that AstraZeneca has a strong patient access program in place to support Lynparza, and Wedbush awaits official sales reports in coming months to see what discounting trends are like for PARPs and how they are changing with Zejula and Rubraca entry.  

ARIEL3 is testing rucaparib as maintenance in platinum-sensitive ovarian cancer, with patients stratified into BRCAmut, BRCA-like (LOH high) and biomarker negative patients. Focus will be on the BRCA-like and biomarker-negative subgroups, where Dr. Swisher said a minimum of six month of PFS would be necessary to support Rubraca use; the firm notes that PFS with rucaparib in ARIEL2 in these groups were 5.7mo and 5.2mo respectively. Given the way patients are segmented and analyzed in ARIEL3, Wedbush believes it unlikely that data could support a label for rucaparib that is as broad as niraparib’s, and assume that a companion diagnostic will remain a requirement for Rubraca. Given the hindrance this represents, Wedbush's general outlook remains that Zejula is likely to be the PARP of choice in maintenance for all-comers, with switching done only for reasons of tolerability. Upside for Zejula could come with further improvements in patient survival supporting increased duration of treatment and extension into additional settings. Dr. Swisher mentioned that she was particularly interested in the combination of PARPs with immunotherapy, and relatedly the firm highlights the positive results reported at ASCO from the Ph 1/2 TOPACIO study, where niraparib showed additive/synergistic benefit with Keytruda in patients with platinum-resistant ovarian cancer. TSRO has plans to evaluate niraparib plus an anti-PD1 in a Ph 3 as first-line therapy in ovarian cancer; Wedbush notes that the company has a wholly owned anti-PD1 (TSR-042) in development, which if approved could allow TSRO to better control economics of combo treatment. The firm's PT is based on the NPV of the incremental cash flows that a potential acquirer would realize for both Varubi and Zejula through 2030 (discounted by 11% annually).