I have recently received many questions on the micro-cap stock Sesen Bio (Nasdaq: SESN). This small company is attempting to make a big name for itself in the area of non-muscle invasive bladder cancer (NMIBC). In a peculiar move, Sesen released its annual report Friday after the market close ahead of its scheduled conference call on Monday morning. Here, I will discuss the prospects of the pivotal VISTA trial and Sesen’s financial position.I
Sesen is in the late stages of its pivotal Phase 3 trial using its Targeted Fusion Protein Therapeutic (TFPT) agent vicinium. Essentially, Sesen has tagged a cytotoxic molecule, exotoxin A from the bacteria pseudomonas, to an antibody which will target a certain surface protein, maximizing the amount of cytotoxic drug delivered to cells that express that protein. The protein that vicinium targets is EpCAM, which is over-expressed on the cancer cells.
Currently, patients with NMIBC are initially treated with BCG, which is a mycobacterium bovis strain that induces an immune response. BCG in a solution, is instilled in the patient’s bladder for a period of time, typically around two hours. The thing with NMIBC is the cancer has not “dug” deep into the bladder tissue. Once the tumor invades the muscle tissue and beyond, there is a much higher risk of the tumor spreading. The majority of patients respond to BCG therapy, but often, the cancer will come back. Patients may try to get BCG again, however if this fails to induce a response or the response is very short lived, the patient is considered to be BCG-unresponsive. At this point, patients have limited treatment options. The recommended treatment, also a dreaded treatment, is a radial cystectomy. Essentially removing the cancer and the bladder all at once. This is an unpleasant procedure, leaving the patient with a life of incontinence and sexual dysfunction.
Sesen and vicinium aim to avoid this radical approach, or at least provide patients another option prior to bladder removal. This disease is has such limited treatment options, the FDA has published a guidance report in February of 2018 outlining guidance and recommendation for developing therapies for NMIBC. This report is the finalized version of the November 2016 draft guidance.
The VISTA Trial – Design
The VISTA trial was initiated in the third quarter of 2015, based on guidance from the FDA at the end of phase 2 meeting. The draft guidance in 2016 and final guidance in 2018 includes information regarding trial design, outcomes etc. The design, outcomes, etc. of VISTA appear inline with the FDA’s guidance, which is important. VISTA is evaluating vicinium in patients with high-risk NMIBC who received two courses of BCG, and the disease is now unresponsive. The dosing scheme in VISTA is slightly different from that of the phase 2 trial, however, if anything, this is an advantage as vicinium is given more frequently. As there is no medication recommended in this setting, the trial is a single-arm study, meaning there is no comparator arm. Patients were recruited in three cohorts, with the first two cohorts being important for FDA approval based on guidance. These cohorts are: 1) carcinoma in situ (CIS) patients with or without papillary disease whose cancer was determined to be refractory or recurred within six months of their last course of adequate BCG and 2) CIS patients with or without papillary disease whose cancer was determined to be refractory or recurred after six months, but less than 12 months, after their last course of adequate BCG.
The primary endpoint is the complete response (CR) rate and duration of responses in patient in cohort 1. This is consistent with the FDA’s guidance document. In VISTA, Sesen defines a CR as a non-positive urinary cytology and either normal cystoscopy or abnormal cystoscopy with negative biopsy. This definition of a CR is also inline with the FDA guidance.
This is where Sesen and VISTA enters a grey area. The FDA guidance states “Sponsors should consider the complete response rate in the context of the duration of the response…Sponsors should discuss with the appropriate review division the minimum duration of follow-up (and, thus, the minimum duration of response) before submitting an application.” The FDA continues in its guidance, “For single-arm trials of patients with BCG-unresponsive NMIBC in patients with CIS that use complete response rate as the primary endpoint, the lower bound of the 95 percent confidence interval around the observed response rate should rule out a clinically unimportant complete response rate. The median duration of complete response is also important. A high complete response rate is not meaningful if the response duration is short. The sponsor should discuss with the appropriate review division the minimum duration of response at the time of NDA or BLA submission.”
Based on the language of this guidance, the determination of what a “clinical unimportant complete response rate” lies solely in the hands of the FDA. This places investors at a disadvantage. At least in multi-arm trials, one is able to have a direct comparator. But here, the comparator is a subjective, arbitrary opinion developed by the FDA. Situations like this make me leery, as it is hard to know what a governing body may do. Some unexpected examples include the FDA’s denial of AVEO’s tivozanib in 2013 after meeting the primary endpoint, or even the EMA’s shocking denial of Bristol-Myers Squibb’s ipimumab and nivolumab for renal cell carcinoma in 2018. These are just a few highlights of how unpredictable the governing bodies can be. Sesen has not released any information suggesting what type of CR rates the FDA may be looking for at various time points, so there is little insight for investors at this time.
But what if there was some guidance on what type of CR rates are meaningful? A 2016 publication by the International Bladder Cancer Group (IBCG) in the respected Journal of Clinical Oncology does just that. Kamat et al. state, “Single-arm designs may be relevant for the BCG-unresponsive population. Here, a clinically meaningful initial complete response rate (for carcinoma in situ) or recurrence-free rate (for papillary tumors) of at least 50% at 6 months, 30% at 12 months, and 25% at 18 months is recommended.” As a reminder, the CIS patients in cohort 1 are the primary endpoint. I will highlight, these are recommendations from a well-respected group published in arguably one of the most respected and renowned oncology journals in the world.
The VISTA Trial – Results
The data presented here is from the recent 10-K filing on March 1st, and reflects analyses on the results of the VISTA trial using a cut off date of December 3rd, 2018. We will focus on Cohort 1, as this is the group of patients analyzed for the primary endpoint. The six-month and twelve-month CR rate was 25% and 14% respectively. When we compare this to the IBCG’s recommended CR rates of 50% and 30% at six and twelve-months respectively, we see Sesen falls far short of the mark. Furthermore, if you remember, the FDA’s guidance highlights “the lower bound of the 95 percent confidence interval around the observed response rate should rule out a clinically unimportant complete response rate.” The lower bound of the 95% confidence interval for the CR rate in VISTA at six and twelve-months was 16% and 7%, even further below the recommendation of the IBCG. The same holds true if cohort 1 and cohort 2 are pooled together. And if we look at the upper bound of the 95% confidence interval of cohort 1 and the pooled cohorts, even this value does not cross the IBCG’s recommended CR rate. If the FDA utilizes IBCG’s recommendations as the marking stick for VISTA, then it was an utter failure at six and twelve months, when you look at the CR rate, or either side of the 95% confidence interval. Potentially even more concerning for longs, the Kamat et al. article is listed as a reference in the finalized 2018 NMIBC guidance. Meaning, the FDA is well aware of the recommendations, and has already utilized these recommendation in the formulation of their guidance.
As discussed above, Sesen followed the FDA guidance properly, creating VISTA with the right patients and the right outcomes. But when we compare the results to the subject-matter experts of the IBCG, it appears VISTA falls short of their expectations. This is the issue with single arm trials, it is unknown what to compare the results to. If the FDA uses the IBCG’s definition for “clinically meaningful complete response rate,” then VISTA is a failure. And maybe, this explains why Sesen has yet to discuss any timelines for BLA filing. One would expect that having received Fast Track designation, Sesen would be attempting to meet with the FDA and develop a plan to get to market as soon as possible. The recent 10-K filing gives no such indication of timeline or discussion with the FDA. One may argue that the filing is retrospective, why would it include a timeline for 2019? If vicinium is indeed as groundbreaking as its touted, then you would expect Sesen to be discussing the meetings it has had with the FDA in 2018. If they have not yet met with the FDA, the BLA is even further away than one may have expected.
Despite this apparent miss on the data, everything is not always so cut and dry. I will point out that the FDA granted vicinium Fast Track designation in the second half of 2018, after initial topline results were out. Very valid point. However, one must also consider at that time only the 3-month CR rate was available, which was 68%. That is a very respectable CR rate, but as the FDA has emphasized, durability is essential, and at that time durability was unknown. Furthermore, I question what exactly the FDA is looking at when granting Fast Track approval. On January 4th, the FDA granted CRISPR Therapeutic’s Sickle Cell Disease candidate CTX001 Fast Track designation. This was awarded before CRISPR even dosed a patient with CTX001, let alone report any clinical data on its efficacy. Therefore, basing an argument on the fact that FDA granted vicinium Fast Track designation should be done very cautiously if one opts to do so.
One may also argue that the FDA has a different set of guidelines and “goals” they want for vicinium in order to be approved, less lofty guidelines than those set forth by the IBCG. Goals that vicinium has met. This is also very possible, but I will point out that those who claim vicinium had met the FDA’s goal have no more evidence than those who claim it has not met the FDA’s goals. Again, investors are left wondering what the FDA is exactly looking for in regard to CR rate and durability. And furthermore, the IBCG recommendations are cited in the FDA’s NMIBC guidance document, confirming they are aware of these recommendations and have used them to draft their guidance.
Despite the large questions regarding the VISTA data, Sesen is financially in a good position. They ended 2018 with $50.4M in cash and cash equivalents. In the fourth quarter, the net loss was $6.8M, equating to a cash runway of over a year, pending large changes in expenses. One might expect expenses to continue to wind down as VISTA reaches completion, however additional research activities or increased expenses associated with the potential BLA filing may offset this decrease. The company has no debt on the balance sheet which is excellent. I would be remiss if I failed to mention that Sesen has received a compliance notice from the Nasdaq Stock Market regarding the closing stock price. Sesen has 180 days (which may be extended) to have 10 consecutive business days with the closing bid price of $1.00 or more, or else Sesen will be forced to delist. At the market close on March 1st, Sesen has had one (consecutive) day with a closing bid of $1.00 or greater.
Seeing no discussion of BLA meetings with the FDA or timeline for submission was concerning as I looked through the 10-K. Unless there is larger news pending for Monday morning, which is always possible, it would appear Sesen is at least nine months away from filing its BLA. As discussed above, the VISTA data failed to meet the IBCG’s definition of a clinically meaningful CR rate and durability. Perhaps therefore there has been no BLA discussions. Without a comparator arm, it is difficult to know what the FDA’s target is for VISTA’s CR rates and durability. In the absence of any guidance from Sesen and the FDA, we have the IBCG’s recommendations, which the FDA has used to formulate its guidance. In the absence of other data, it is naïve to blindly ignore the IBCG’s recommendations because they do not align with the long thesis. Given the strong financial position of Sesen, a delay in BLA filing would not be a death sentence for the company, but there would be significant costs and time associated with rectifying the NMIBC program. Sesen has also paused development of vicinium for other indications (such as SCCHN) to focus on NMIBC, so if indeed VISTA is delayed or a failure, it would take time and money to get other internal programs up and running. In conclusion, no one knows for a fact what CR rate and durability the FDA has set as a goal, and investors ought to be extra cautious in light of the IBCG’s recommendations given VISTA’s results.