Is a Misperception Subduing Share Price at Aptose?

he death of Mr. Chiang, who was always kind, has never set well with me.

Three years ago, Mr. Chiang, the father of a close friend in Taiwan, died of lymphoma. The family were exceptionally devastated: his illness had dragged on for 15 years, and they could be forgiven for a casual misperception that doctors would just keep treating it forever, just keep melting it away with another round of rituximab and CHOP chemotherapy. This was an elite family by Taipei standards, and perhaps somehow they thought ordinary rules of mortality did not apply to them. They were well-to-do, owned an apartment in a fine part of town that smacked of comfort and culture. Father and mother were both graduates of tony National Taiwan University, and so were all three of their children. The oldest was a physician who’d also graduated from medical school at NTU. The second child, a daughter, had earned a PhD in pharmacology at NTU, and during those years I had mentored her because I’d done postdoctoral work in the same laboratory. She was now president of a formidable contract research organization in Taiwan and ran clinical trials for pharma majors all over the island. At home, among each other, they spoke Mandarin Chinese, not Taiwanese. None of them felt they were any good at the more difficult nine-toned Taiwanese, the language of the people, and so chose to communicate more formally.

Insiders in the clinical trial industry often joke about lymphoma trials, and along these lines. Show us something, anything, that REALLY works in phase 3 for lymphoma, and not just in surrogate endpoints (endpoints other than overall survival, OS, which is all that is truly meaningful in an oncology efficacy trial). No, to heck with those “pilot studies” that get published and those rosy phase 2 trials with their cherry-picked super-ideal patients than never translate into phase 3 success. And spare us all these new ideas from start-up companies that you’re so cocksure are going to mop up the lymphoma landscape. Please. Indeed, for people who are part of the medical profession, and with that I include doctors and nurses and the various role-bound lookers-on in American hospitals, they come in two flavors. For the naive, for the people having their first couple of rodeos, lymphoma is no big deal. It always melts away with chemotherapy, right? Five years into the game and some clinical mileage under your belt, and your realize lymphoma is a very big deal indeed, and that most patients with it get caught in a rut just like my friend’s father. For over a decade, they’d been zapping it, melting it away, watching it come back; his was like a field of weeds that needed a vigorous annual mowing.

Part of the problem they were dangling from is that Taiwan is not on any major pharma player’s first-stop list of international destinations in which to seek drug approval. The island’s future and fate are not certain. After years of struggling to maintain a distinct identity from China, Taiwan’s President Tsai now would seem to offer little resistance to reunification. Both nations have so functionally been intertwined financially for decades as to make war impossible. Practical minded Taiwanese want a way off the island, and decry the Filipinification it’s now undergoing, with sagging education institutions and ebbing of the robust pride in the Taiwanese entity and outlook that one saw 20 years ago. My friend’s father’s health was ebbing away in a manner that seemed to recapitulate the fate of an island of extreme natural beauty and once-robust cultural and intellectual accomplishments.

He was now accumulating the add-on toxicities of chemotherapy. He’d become both diabetic and cachectic. He was clinically depressed, a concept difficult for the family to look in the face. I scoured American trial offerings for something he might enter, but we were on the cusp of CAR-T really going in and muscularly cleaning up these patients and fixing them (he had diffuse large B-cell lymphoma, DLBCL). My friend pointed out that while they were well-to-do, they were by no means rich. The children were rooted in jobs in Taiwan and would be unable to accompany him for an extended stay in the US. Over the course of an unusually bad night in which he was throwing lots of PVC’s, in and out of bigeminy and trigeminy, he slipped into ventricular tachycardia around 4 am and succumbed.

What does any of this have to do with Aptose? We’re coming to that…and I propose to show you how, could Mr. Chiang’s case have been forestalled a few years it might have come out altogether different.

Most readers know that Aptose is completing the pre-clinical development of an agent called CG’806, and that the company is presenting posters of its enzymic inhibition spectrums of activity now at the American Society of Hematology’s international meeting in Atlanta. Aptose CEO William Rice bought the agent from a small South Korean pharma house called Crystal Genomics for single-digit millions. If things go as data right now suggest they might, Rice’s deal could prove to be among the shrewdest and most lucrative in the history of pharma. Not quite Manhattan for a string of beads, but let me explain what I mean.

Rice is a molecular structure-function relationship guy and an undisputed master of cancer and virological drug development….he’s part pharmacologist, part biochemist, part toxicologist, part enzymologist. He spent much of his career in a lofty position at NIH. Before $APTO, he founded Achillion ($ACHN). His expertise gives him the ability to study a drug’s structure moiety by moiety and predict what, if anything, the drug is likely to be good at accomplishing in the body. Pondering science in this way is something he’s done his entire life, and even as a boy growing up in the Appalachian mountains, he derived fascination from the fact that pills containing simple molecules could be ingested and have such potentially massive biological effects on the body. He wanted to become a master of how chemicals do that to us. And is. He wanted to design drugs for their eventual effects, or be an expert at picking drugs for the likelihood that they may have beneficial effects unforeseen by others.

Early last year, Rice had scientists in his own in-house laboratory facilities in San Diego begin exploring CG’806, and soon found it was living up to hopes he had for it. In this agent, as yet unnamed (it will eventually bear a name ending in -ib for inhibitor), his people found wide-ranging extreme potency at inhibiting many kinds of malignancy- and inflammation-driving tyrosine kinases. When Rice presents this to investors, he displays a map of the “kinome,” a sketch implying familial relationships that lists all the known tyrosine kinases. The Aptose agent has a broad swath of activity over large parts of the kinome, rather like some horror-film devil bat whose shadow darkens four acres of earth.

If you’ve been following ASH news via online sources during the weekend, you know about the advent of many newish tyrosine kinase inhibitors for oncology indications. They’re being trotted out. Blueprint Medicines ($BPMC) for example is tearing up the map at ASH with new agents, new data. I recently came across a journalist who saying, in essence, of Aptose: Meh. CG’806 inhibits Bruton’s tyrosine kinase just as ibrutinib (Imbruvica, $JNJ) does….so maybe Aptose’s drug will come to the rescue where ibrutinib fails. Beyond that, the writer saw little reason to be excited. When I formulate what is going on at Aptose, however, from what I’ve seen at their facilities, from regular conversations with Dr. Rice and his just-extraordinary super-competent SVP Greg Chow, from what I’ve been allowed to peer into, I find myself in a radically different place, and a giddy one. Let me explain why. If you think Aptose is just assembly-lining out one more me-too tyrosine kinase inhibitor, let me reorient you.

In customary KSS fashion, I will do that by digression. Indeed, let me take a case that’s the polar opposite of Mr Chiang’s, a man dying by battery from the same toxins given again and again for years on end but too imprecise to help him. He died for lack of precision medicine, in a sense. But another friend is alive because of precision medicine, and works for a major pharma house often mentioned in these pages.

The friend was a gastroenterology fellow one year behind me in training. He’d taken on an unwell appearance, but I was floored when an article in the local Sunday newspaper said he was searching for a bone marrow donor. He’d been diagnosed with chronic myelogenous leukemia. It was 1997. I worried his career was over.

Does the name Brian Druker mean anything to you? At the time it didn’t to me either. Druker is an Oregon academic oncologist concisely profiled in this several-year-old New York Times article. Years of painstaking work led by Druker had shown that a mutation that involved inappropriate fusion of two spans of DNA created a novel tyrosine kinase, called bcr/abl, that drives most cases of CML. Shut down that tyrosine kinase with an otherwise non-toxic inhibitor given as an oral drug, and you functionally cure CML. A reversion to disease status would occur on cessation of the drug, and others would have mutations around the drug’s efficacy, so the new agent did not cure everyone. But it cured most, and was regarded as a medical triumph. Formerly CML killed one in three patients diagnosed with it within five years. My friend is alive and well, still on the same drug, 20 years later. The drug of course is Gleevec (imatinib, $NVS).

Druker is a friend and colleague of Bill Rice, and like Rice sees the genius in CG’806, and has assisted Aptose with certain aspects of the drug’s preclinical development, certain assays at which Druker’s lab is adroit. According to Rice, all the present-day tyrosine kinase gurus with whom he’s discreetly shared data about CG’806 are amped up about the agent, as are the others with whom he’s working directly, such as my former colleague Michael Andreeff, MD, PhD, of UT MD Anderson Cancer Center’s Leukemia Department.

The irony of the story of CML and Gleevec, precision medicine’s triumphal first outing, is that precision medicine has yet to succeed again in the bombastic, inarguable way it did there. Few diseases have precisely the single molecular lesion that CML does, and many CML sufferers do acquire add-on molecular pathologies. Early on in the precision medicine wars it appears that medical science still lacks the sophistication fully to invoke what the concept embraces, and there because so many alternative pathways and mechanisms support and back up most diseases. Most cancers are NOT the fault of a single aberrant tyrosine kinase, but also are driven by subverted apoptosis machinery, by immune evasion, by quirky relationships with cellular DNA repair machinery, and by perverse nutrition and angiogenesis pathways. You go round robin and you begin again but much emerging new evidence suggests that they have reserve, recruitable, back-up tyrosine kinases ready to leap into action and promote cell growth if the first-choice tyrosine kinases are ailing. If you make magic bullets for each of those, is that still precision medicine? The evolution of tyrosine kinase inhibitors, CAR-T and checkpoint inhibitors have made serious incursions in the cancer wars, but I still think a wise person would be reluctant to argue that, yes, clearly and definitively we are right now winning the war on cancer. We have very far to go.

I wonder if what we need is a kind of Goldilocks precision medicine that is not too precise, and I wonder if this is why a brilliant future lurks for Aptose. I’ve argued in these threads before, for example, that much of the virtue of Aurinia’s ($AUPH) voclosporin for lupus nephritis is that in some ways, it’s not an exceptionally precise medicine. By inhibiting the enzyme calcineurin, it exerts a broad divot of activities that tweak T-cells and B-cells and other components of humoral immunity as well. Voclosporin has won out when a slew of precision biological agents has failed against lupus nephritis because it lacks narrowness in action. Rituximab failed against LN, for example, probably because it is too B-cell-specific.

While CG’806 has not yet been tried in a patient, a wealth of new data being presented at ASH shows it to be a molecule with unprecedented activity against many pathology-mediating tyrosine kinases. It inhibits these tyrosine kinases with thermodynamics well in the sub-nanomolar range, reflecting extraordinary potency of enzyme inhibition…meaning it takes little drug and thus risks little toxicity to nuke the target kinases. It’s useful to think of certain cancers like lymphoma as being like that incredible array of vampires that George Clooney has to face down toward the end of the film “From Dusk til Dawn.” The vampires have so many tricks, so many unexpected gambits: smacked back, they invariably re-emerge from smoking ruin just like Mr. Chiang’s lymph nodes following another dose of rituximab. Cancer is a committed process and we are naive to think that a single inhibitor tackling a single aberrant enzyme will tackle most forms of cancer even if that succeeds swimmingly in CML. In one discussion with Dr. Rice he explained that a more rational modern view of cancers like lymphoma is to picture them being backed up by all kinds of recruitable tyrosine kinases ready to emerge after you’ve subdued the first one. Cancer is highly dynamic and resourceful, and in a case like Mr. Chiang’s his tumor bulk was obliterated only to come back stronger, probably to come back driven by even more summoned-up tyrosine kinases egging on growth of tumor.

He didn’t stand a chance with the therapy he got, but I cannot help but marvel what an agent like CG’806, now shown to shut down dozens of pathologically relevant kinases in lymphoma, in acute myelogenous leukemia, even present in certain solid tumors, might have done for him. Oncology has never seen a drug remotely like CG’806. In fact, most modern scientific thinking tends to lead in the opposite direction, toward highly specific inhibitors working for only a single tyrosine kinase. A theme of my own PhD work was the mechanisms the body has for inhibiting serine proteinases such as those of coagulation, fibrinolysis and complement. These mechanisms enable life minute by minute: a person who suddenly lost all ability to control these proteolytic enzymes would live no more than five minutes. But that literature is rife with examples of how the broader acting the inhibitor, the poorer the thermodynamic efficacy of inhibition. All scientific truths exist to be upended, and here Rice has proven it’s possible for a molecule to inhibit in a clinically relevant way at least 20 distinct tyrosine kinases and to do so with such extreme snug binding (picomolar efficacy!) that only negligible quantities of drug are required. CG’806 is a marvelous molecule…and a difficult one. Rice told me recently the company only in recent weeks mastered the organic synthesis of CG’806 working with a contract manufacturer. He didn’t say it, but the look on his face implied that CG’806 is a doozie to make…a fact that may act as a kind of IP security blanket, a fright wig for would-be competitors. $BPMC is taking a different road: finesse, refinement, months of software-aided inhibitor design to devise a drug that takes out a single tyrosine kinase. Aptose’s CG’806, by contrast, nearly dares you to “Hit me with your best shot.”

The oncogenic kinases that comprise a cancer cell shouldn’t be viewed as working in series where blunting activity of one silences the others. The kinases are in networks, certain tyrosine kinases downstream or upstream of others. But early validation of Rice’s idea of an anti-tyrosine kinase scatter-bomb in CG’806 appears to find validation in a recent AML study in which simultaneous inhibition of the AML-driving tyrosine kinase FLT3 and an associated serine-threonine kinase (Pim) really brings AML under control. Aptose’s Saturday poster can be downloaded from here and is worth study. We’ve chatted up CG’806 as a prospective lymphoma agent, and yet this poster implies such efficacy in AML (a completely unrelated malignancy) as to make one wonder whether CG’806 could have a future also as a possible maintenance therapy for AML analogous to how Gleevec is used in CML. The poster was a collaboration between Rice’s Aptose corporate laboratory in San Diego (overseen by the redoubtable Hannah Zhang, MD, PhD, a Chinese-trained gynecologist/obstetrician who turned in a formidable performance as a PhD candidate at Loma Linda University) and the Houston laboratories of Michael Andreeff, MD, PhD, at MD Anderson. The pro-apoptotic activity that CG’806 seems to derive from modulating bcl-2 is a gratifying surprise and probably warrants some further experiments to define mechanism.

In the latter half of 2018, we anticipate CG’806 will enter phase 1 trials in both lymphoma and AML patients (the only known “smart” agent to have plausible activity in both diseases). Rice intends to file an IND for clinical work with CG’806 by the end of 1H18; “gotta get into the clinic…ready to get into the clinic….” Rice kept saying, mantra-like, on a sunny clear morning in San Diego. We don’t want to sound non-praising of the drug in the sense that its ability to inhibit so many pathological tyrosine kinases implies it lacks precision….but in a sense it does, and this could prove to be the basis of a superiority in oncology. We here praise imprecision! And so, tentatively: precision medicine is dead! Long live precision medicine. It may be that the reason nothing has really ever worked for stubborn illnesses like DLBCL is that medicine has never taken a Goldilocks approach wielding a just-right degree of (im)precision….because it has never had a Goldilocks agent. CG’806 may prove to be that drug.