The aftermath of Topotarget fallout

Once the fact that the null hypothesis that the primary endpoint PFS in CUP-trial is the same in between two treatments or BelCaP and Carboplatin + Paclitaxel alone could not be rejected with statistical significance became known from the conference call presentation, it was evident that the long term potential of the stock was seriously put to question. It is now by no means a certainty that further trials in solid tumour indications will be started. This depends on what is observed from the primary tumours of the patients in follow-up evaluations, and if it can be observed that some subset of patients seemed to be benefiting from the drug.

Topotarget (CPH: TOPO) has previously been in trouble from its investor communication gaffes. At the moment those are handled by the CFO. Some investors could bail-out in the run-up to the conference call, since the company made no mention about the lack of PFS improvement in its early morning release beyond saying primary endpoint was not met, instead highlighting the Objective Response Rate improvement and a ”positive divergence in Overall Survival in Belinostat’s favour after 8 months of treatment”. The latter of those looks a lot less convincing from the presentation graphs although obviously warrants some looking into, while the statistically significant ORR improvement is odd in comparison to the other two facts, perhaps raising questions of how valid the endpoint really is.

Topotarget’s management commented they are surprised of the magnitude of the drop in the stock market price. They said that since the agreement with Spectrum Pharmaceuticals (NASDAQ: SPPI) is not affected by this news but instead rests mainly on the pivotal Relapsed or Refractory Peripheral T-Cell Lymphoma or PTCL trial results which are expected late this year after being pushed back due to slow enrolment, they thought of a less severe slide would ensue. Primary endpoint in this liquid tumour trial is; Objective Response Rate.

The fact that Spectrum Pharmaceuticals has said nothing of the trial is firstly typical for the company unwilling report of bad news. It raises questions on Spectrum’s evaluation of clinical potential of the assets it acquires following another late-stage bomb just months ago, when the company sidestepped any large impact by making a big acquisition. The said acquisition of Allos Theapeutics, where offer period was recently extended, netted an approved drug in PTCL, something that has to be re-evaluated by Topotarget investors as well. Many of them have gotten a harsh reminder of the risks with small-cap biotech completely dependent of binary events.