It was a rough start to the week for Onconova Therapeutics (ONTX) to say the least. On Monday, the company announced that in the Phase 3 INSPIRE study of rigosertib in high-risk (HR) myelodysplastic syndromes (MDS), the candidate failed to meet both primary endpoints.
Patients had been randomized to receive either IV rigosertib plus best supportive of care (BSC) or physician choice (PC) of therapy with BSC, with the data indicating that overall survival in the HR-MDS population was 6.4 months for the rigosertib arm and 6.3 months for the PC arm. It didn’t help that no statistical difference was demonstrated in the VHR patient arm, with the PC arm actually showing a modest survival advantage over the rigosertib arm.
H.C. Wainwright’s Joseph Pantginis tells clients he was taken aback by the fact that the PC arm performed better in the VHR population, as PC “options have not changed in at least the last decade.” Additionally, at the interim analysis, rigosertib was outperforming PC on survival, but PC began to exhibit a superior performance post-interim.
Offering additional explanation, Pantginis stated, “Regarding the use of any experimental or novel option in the PC arm that might have impacted the outcome, management’s initial comments show that such factors such as bone marrow transplant and use of venetoclax was balanced between both arms; therefore, the PC arm continued to confound the literature.” As a result, development in hematological indications for rigosertib, including the oral program in first-line MDS, has been halted.
Weighing in on the implications, Pantginis calls this outcome a “major hit to the overall thesis for rigosertib and Onconova.” Now, ONTX will be forced to do some rebuilding even though it’s in “the fortunate position to have meaningful pipeline opportunities in hand already.” The five-star analyst added, “We expect the rigosertib program to further expand into solid tumors (lung study discussed below), though we believe that investors would need to see meaningful data from solid tumor studies prior to increasing confidence on the drug again.”
What else could help drive a turnaround? A significant non-dilutive funding event for the COVID-19 opportunity, in Pantginis’ opinion. Improved visibility for this program is expected in 2H20. As for its CDK 4/6 – ARK5 inhibitor, ON123300, visibility is set to increase with the IND, which is slated for Q4 2020, and the likely initial development in HR-positive metastatic breast cancer.
This turn of events prompted Pantginis to downgrade his rating from Buy to Neutral, and to remove his price target. (To watch Pantginis’ track record, click here)
Other analysts echo Pantginis’ sentiment. 4 Hold ratings and no Buys or Sells have been assigned in the last week. So, the consensus is unanimous: ONTX is a Hold. The analysts expect shares to remain range bound for the foreseeable future as indicated by the $0.30 average price target. (See ONTX stock analysis on TipRanks)
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This article was originally posted on TipRanks.