CASC: Cascadian Therapeutics Analysis and Research Report

2018-06-22 - by Asif , Contributing Analyst - 56 views

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Overview

Cascadian Therapeutics is a clinical-stage biopharmaceutical company focused on the development of therapeutic products for the treatment of cancer. The company's goal is to develop and commercialize novel targeted compounds that have the potential to improve the lives and outcomes of cancer patients. The company's lead clinical-stage product candidate is tucatinib, an oral, HER2-selective small molecule tyrosine kinase inhibitor. The company's pipeline also includes two preclinical-stage product candidates: CASC-578, a Chk1 kinase inhibitor, and CASC-674, an antibody program against an immuno-oncology target known as TIGIT.

2018 Merger Agreement

On January 30, 2018, the company entered into an Agreement and Plan of Merger (the Merger Agreement) with Seattle Genetics, Inc., a Delaware corporation (Seattle Genetics), and Valley Acquisition Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Seattle Genetics (Merger Sub). Pursuant to the Merger Agreement, and upon the terms and subject to the conditions thereof, on February 8, 2018, Merger Sub commenced a tender offer (the Offer) to acquire all of its issued and outstanding shares of common stock (the Shares) at a purchase price of $10 per Share (the Offer Price), net to the seller in cash, without interest and subject to any required withholding taxes.

Following the consummation of the Offer and subject to the terms and conditions of the Merger Agreement, Merger Sub will merge with and into Cascadian Therapeutics, with Cascadian Therapeutics surviving as a subsidiary of Seattle Genetics (the Merger, and together with the Offer, the Transactions). The Merger will be effected pursuant to Section 251(h) of the General Corporation Law of the State of Delaware, without a vote of stockholders of Cascadian Therapeutics. At the effective time of the Merger, each Share (other than Shares owned by Seattle Genetics, Merger Sub, or any other direct or indirect wholly owned subsidiary of Seattle Genetics, and Shares owned by Cascadian Therapeutics, or any direct or indirect wholly owned subsidiary of the Company, or by stockholders who have validly exercised their appraisal rights under Delaware law) will be converted into the right to receive an amount in cash equal to the Offer Price, without interest and subject to any required withholding taxes.

Tucatinib

The company's lead development candidate, tucatinib, is an investigational orally bioavailable, potent tyrosine kinase inhibitor (TKI) that is highly selective for HER2, also known as ErbB2, a growth factor receptor that is over-expressed in approximately 20% of breast cancers. In addition to breast cancer, HER2 is over-expressed in other malignancies, including subsets of bladder, cervical, colorectal, esophageal, gastric, lung and ovarian cancers. Cascadian Therapeutics is currently developing tucatinib for the treatment of HER2-positive (HER2+) metastatic breast cancer. Over-expression of HER2 in breast cancer has been associated historically with increased mortality in early stage disease, decreased time to relapse and increased incidence of metastases. Similarly, the overexpression of HER2 is thought to play an important role in the development and progression of other cancers.

The introduction of HER2-targeted therapies, including antibody-based therapies and small molecule TKIs, has led to improvement in the outcomes of patients with HER2+ cancer. Unlike pan-HER TKIs, tucatinib selectively inhibits HER2 and is at least 1,000-fold more selective for HER2 than the epidermal growth factor receptor (EGFR). This selectivity may improve drug tolerability by reducing the risk of severe diarrhea and skin rash commonly seen with pan-HER TKIs.

Cascadian Therapeutics is currently conducting a randomized (2:1), double-blind, controlled pivotal clinical trial, known as HER2CLIMB, comparing tucatinib versus placebo, each in combination with capecitabine (Xeloda®) and trastuzumab (Herceptin®), and without loperamide or budesonide prophylaxis, in patients with locally advanced or metastatic HER2+ breast cancer who have had prior treatment with a taxane, trastuzumab, pertuzumab (Perjeta®) and ado-trastuzumab emtansine or T-DM1 (Kadcyla®) and who may or may not have brain metastases. The primary endpoint is progression-free survival (PFS) based upon independent radiologic review. Patients will also be followed for overall survival, which is a secondary endpoint. Key objectives related to assessing activity in brain metastases include a secondary endpoint of PFS in a subset of patients with brain metastases. HER2CLIMB is currently enrolling patients in the United States, Canada, Western Europe and Australia and is expected to expand into Israel early in 2018. The HER2CLIMB clinical trial is intended to support a potential new drug application (NDA) submission to the United States Food and Drug Administration (FDA) and a potential Marketing Authorization Application (MAA) to the European Medicines Agency (EMA).

In addition, its two Phase 1b trials of tucatinib, one in combination with T-DM1 and another in combination with capecitabine and/or trastuzumab, are fully enrolled and active patients remain on treatment. Results to date from the Phase 1b trials indicate these drug combinations are well tolerated and may provide clinical activity in heavily pretreated patients with metastatic breast cancer, with and without brain metastases.

Updated results from the Phase 1b triplet combination study (tucatinib with capecitabine and trastuzumab) showed that the combination continued to be well tolerated. Compared to previously reported interim results, the updated PFS increased to 7.8 months and the overall response rate (ORR) increased to 61%. The median duration of response was 10 months. Patients in the Phase 1b triplet combination trial previously received a median of three HER2-targeted agents such as trastuzumab, pertuzumab, lapatinib or T-DM1. These updated results were presented at the 2016 San Antonio Breast Cancer Symposium (SABCS).

In September 2017, results from the pooled analysis of Phase 1b combination studies showed further support for the potential utility of tucatinib for patients with HER2+ metastatic breast cancer with brain metastases, including untreated or progressive brain metastases after radiation therapy. In addition, data from nonclinical models were presented that support the evaluation of tucatinib in HER2+ gastrointestinal cancers. These results were presented at the European Society for Medical Oncology 2017 Congress.

In December 2017, the company reported results from a subgroup analysis from its two ongoing combination studies of tucatinib, which demonstrated prolonged progression-free survival benefit regardless of presence of brain metastases or patient characteristics. These results were presented at the 2017 SABCS.

In July 2017, the company announced that the EMA confirmed that positive results from HER2CLIMB could serve as a single registrational trial for submission of a MAA to the EMA for potential marketing approval. The company had received similar confirmation from the FDA in 2016.

In September 2017, the company announced tucatinib was granted orphan drug designation by the FDA for the treatment of HER2+ colorectal cancer and, in June 2017, the company announced that tucatinib was granted orphan drug designation by the FDA for the treatment of breast cancer patients with brain metastases.

In June 2016, tucatinib was granted Fast Track designation by the FDA for the treatment of metastatic HER2+ breast cancer. The FDA’s Fast Track process is designed to facilitate the development and expedite the review of drugs to treat serious conditions and fill an unmet medical need.

Tucatinib is also being evaluated in investigator-initiated studies in combination with approved agents. In June 2017, a Phase 2 study called MOUNTAINEER was initiated to evaluate tucatinib in combination with trastuzumab for patients with HER2 amplified metastatic colorectal cancer and recently began enrolling participants in the U.S.

In December 2017, the first patient was enrolled in the investigator-initiated Phase 1b/2 trial that is evaluating tucatinib in combination with an aromatase inhibitor and CDK4/6 agent for patients with hormone receptor-positive and HER2-positive (HR+/HER2+) metastatic breast cancer.

Cascadian Therapeutics has an exclusive license agreement with Array BioPharma Inc. for the worldwide rights to develop, manufacture and commercialize tucatinib.

Other Pipeline Candidates

Although its efforts are focused primarily on developing and commercializing tucatinib, Cascadian Therapeutics has two preclinical programs. The company's earlier stage product candidates are CASC-578, a Chk1 cell cycle inhibitor that is an orally available, small molecule kinase inhibitor, and CASC-674, an antibody against an immuno-oncology target known as TIGIT.

Chk1 is a protein kinase that regulates the cell division cycle and is activated in response to DNA damage and DNA replication stress. Cancer cells often have mutations that alter DNA damage response signaling pathways that function in parallel with Chk1 to regulate the cell cycle. These mutations may make tumor cells more reliant on the activity of Chk1 to provide cell cycle checkpoint control, which represents a potential weak point that can be exploited by drugs that target Chk1.

TIGIT (T-cell immunoreceptor with Ig and ITM domains) is an inhibitory receptor expressed on T-cells and NK cells that may negatively regulate immune response to cancers. Antibodies that inhibit TIGIT function may potentially activate anti-tumor immune responses.

The continued research and development of its product candidates will require significant additional expenditures, including preclinical studies, clinical trials, manufacturing costs and the expenses of seeking regulatory approval.

Strategy

The company's strategy is focused on the development of therapeutic products for the treatment of cancer. The key elements of its strategy are to:

  • Develop tucatinib in HER2+ metastatic breast cancer. The company intend to develop and commercialize tucatinib for adult patients with HER2+ metastatic breast cancer, including patients with or without brain metastases.
  • Expand tucatinib development in other tumor types. The company believe tucatinib has potential in other tumor types and intend to continue to evaluate tucatinib in other solid tumors, including HER2+ colorectal cancer, through ongoing and planned investigator-initiated studies.
  • Support its internal activities with strategic collaborations and out-licensing. The company may enter into collaborations, acquisitions or license arrangements to advance the development or potential commercialization of programs in its pipeline. Such relationships can supplement its own internal expertise in areas such as clinical trials, and manufacturing, as well as provide it with access to licensees’ marketing, sales and distribution capabilities.
  • Product Candidate Portfolio

Under the heading “Development Stage” in the table below, the designation “Pivotal” indicates clinical testing of efficacy, safety, dosage tolerance, pharmacokinetics and pharmacodynamics of the product candidate in a trial designed for registration with the FDA for marketing of the product. “Preclinical” indicates the product candidate is undergoing tumor modeling, toxicology and pharmacology studies intended to support subsequent clinical development.

Product CandidateTechnologyMost Advanced IndicationDevelopment Stage
TucatinibSmall MoleculeBreast cancerPivotal Study
Chk1Small MoleculeTo be determinedPreclinical
TIGITAntibodyTo be determinedPreclinical

Oncology Market Overview and Opportunity

Breast cancer is the most common form of cancer in women worldwide, and the second leading cause of cancer-related death in women in North America. The American Cancer Society estimated that in 2017 more than 250,000 women in the U.S. would develop breast cancer and more than 40,000 would die from the disease. Approximately 15-20% of breast cancers overexpress HER2.

The treatment of breast cancer differs by stage and includes surgery and radiation for most patients with early-stage disease. The addition of HER2 targeted agents, including antibody-based therapies and a small molecule, has led to significant improvements in progression-free survival and overall survival, both in the adjuvant setting and for patients with metastatic HER2+ disease. There are currently four approved agents for the treatment of HER2+ metastatic breast cancer, trastuzumab, pertuzumab, TDM1 and lapatinib.

The prevention and treatment of metastatic disease in the central nervous system (CNS), including brain metastases, remains a significant unmet medical need for patients with HER2+ breast cancer. The incidence of first relapse occurring in the brain is increasing in patients who have progressed following trastuzumab-containing adjuvant regimens, and approximately 30-50% of patients with HER2+ metastatic disease will develop brain metastases over the course of their disease.

Development Candidates

Tucatinib

The company's lead development candidate, tucatinib, is an orally bioavailable, potent TKI that is highly selective for HER2, also known as ErbB2, a growth factor receptor that is over-expressed in approximately 20% of breast cancers. In addition to breast cancer, HER2 is overexpressed in other malignancies, including subsets of bladder, cervical, colorectal, esophageal, gastric, lung and ovarian cancers. Cascadian Therapeutics is currently developing tucatinib for the treatment of HER2+ metastatic breast cancer. Over-expression of HER2 in breast cancer has been associated historically with increased mortality in early stage disease, decreased time to relapse and increased incidence of metastases. The introduction of HER2-targeted therapies, including antibody-based therapies and the small molecule TKI, lapatinib, has led to improvement in the outcomes of patients with HER2+ cancer. Unlike lapatinib, tucatinib selectively inhibits HER2 and is at least 1,000-fold more selective for HER2 than EGFR. This selectivity may improve drug tolerability by reducing Grade 3 (severe) diarrhea and skin rash. The company acquired tucatinib in December 2014 pursuant to an agreement under which Cascadian Therapeutics has certain royalty and milestone payment obligations. See Part I, Item 1, “Business—License Agreements” for additional information.

Tucatinib has been studied as a single agent in a Phase 1 clinical trial, with both dose-escalation and cohort expansion components, which enrolled 50 patients, 43 of whom had HER2+ metastatic breast cancer. All HER2+ breast cancer patients had progressed on a trastuzumab-containing regimen that may have also included other chemotherapeutic agents. In addition, over 80% had been treated with lapatinib, with many patients having progressed on this therapy. In this study, tucatinib demonstrated an acceptable safety profile; treatment-related adverse events were primarily Grade 1. Because tucatinib is selective for HER2 and does not inhibit the EGFR, there was a low incidence and severity of treatment-related diarrhea, rash and fatigue which may be associated with tucatinib’s high selectively for HER2 over EGFR. Additionally, there were no treatment-related cardiac events or Grade 4 treatment-related adverse events reported. Twenty-two HER2+ breast cancer patients with measurable disease were treated with tucatinib at doses greater than or equal to 600 mg BID. In this heavily pretreated patient population, there was a clinical benefit rate of 27% (partial response [n = 3] plus stable disease for at least 6 months [n = 3]).

In February 2014, the company initiated two Phase 1b trials of tucatinib. The trials are closed to enrollment although patients remain on treatment. The following is a summary of these studies:

Phase 1b Clinical Trial of tucatinib in combination with TDM-1:

This Phase 1b clinical trial studied tucatinib in combination with T-DM1 in patients with metastatic HER2+ breast cancer who had progressed following prior treatment with trastuzumab and a taxane. This trial was a dose-escalation study of tucatinib in combination with the approved dose of T-DM1, with expansion cohorts in patients with and without brain metastases. The primary objective was to determine the maximum tolerated dose/[define RP2D] (MTD/RP2D) of tucatinib in combination with the approved dose of T-DM1. Secondary objectives included an evaluation of the safety and preliminary anti-tumor activity of the combination.

As reported at the 2016 American Society of Clinical Oncology Annual Meeting, patients treated at the MTD of tucatinib with T-DM1 had previously been treated with trastuzumab, and, in addition, 46% had been treated with prior pertuzumab, and 20% with prior lapatinib. Overall,60% of patients had a history of brain metastases and 42% had brain metastases that were either untreated or had progressed after prior local treatment. In this high-risk population, durable (> 6 months) systemic and CNS responses as well as disease stabilization were seen. The ORR was 41% (14/34) in patients with measurable disease and at least one follow-up scan, and the CNS response rate was 33% (4/12).

The combination of tucatinib and T-DM1 was clinically well tolerated. In 50 patients treated at the MTD of tucatinib, the majority of adverse events were low grade in severity, Grade 1 or 2, and included nausea, fatigue, diarrhea, vomiting, thrombocytopenia and asymptomatic elevated liver enzymes. Grade 3 diarrhea occurred in only two patients (4%), with no mandatory use of anti-diarrheal medications. While asymptomatic elevations in ALT/AST were seen in most patients, the majority were Grade 1 or 2 in severity requiring no change in dosing. Asymptomatic Grade 3 elevations were reported in 18% of patients (9/50) and Grade 4 elevation in 2% (1/50). Except in the setting of progressive liver metastases, all Grade 3 or greater elevations of ALT/AST were reversible with dose interruption and dose reduction of tucatinib and T-DM1. Two of 50 patients (4%), experienced asymptomatic decreases in left ventricular ejection fraction, reported as Grade 1 heart failure. Both of these patients had a prior history of treatment with trastuzumab and pertuzumab. Treatment with both tucatinib and T-DM1 was discontinued in one of these patients, and treatment with T-DM1 alone was discontinued in a second patient who went on to recover normal cardiac function.

Phase 1b Clinical Trial of tucatinib in combination with capecitabine and/or trastuzumab:

In December 2015, updated results from the Phase 1b clinical trial of tucatinib evaluating tucatinib in combination with capecitabine and/or trastuzumab in patients previously treated with trastuzumab and TDM-1 for HER2+ metastatic breast cancer were presented at the 2015 San Antonio Breast Cancer Symposium. Some patients had also been previously treated with pertuzumab or lapatinib. The primary objective of this study was to determine the maximum-tolerated and/or recommended Phase 2 dose (MTD/RP2D) of tucatinib in combination with the approved dose of either capecitabine or trastuzumab, or both. Secondary objectives included an evaluation of the safety and preliminary anti-tumor activity of the combinations. The trial included expansion cohorts at the MTD/RP2D of tucatinib in combination with both capecitabine and trastuzumab and with trastuzumab or capecitabine alone in patients with and without brain metastases.

In a heavily pretreated population, durable (> 6 months) systemic and CNS responses as well as disease stabilization were seen across all three treatment combinations, including patients previously treated with pertuzumab and/or lapatinib as well as trastuzumab and T-DM1. As reported at SABCS in 2015, in seven patients treated with tucatinib and capecitabine, the ORR was 83%, with a CNS response in the one patient with assessable brain metastases and at least one follow-up scan. In 16 patients treated with tucatinib and trastuzumab, the ORR was 29%, with a CNS response in one of seven patients with assessable brain metastases and at least one follow-up scan. In 18 patients treated with tucatinib and capecitabine and trastuzumab, the ORR was 39%, with CNS response in two of four patients with assessable brain metastases and at least one follow-up scan.

In June 2016, updated data from its Phase 1b clinical trial combining tucatinib with trastuzumab and capecitabine were presented at its R&D Day held in New York. In this combination trial, the majority of adverse events were Grade 1, with most patients being able to continue on the full dose of tucatinib. Grade 3 diarrhea was infrequent without a requirement for prophylactic anti-diarrheal medicine. The ORR was 58% and the interim PFS was 6.3 months, with many patients still active on study at the time of the data analysis. Outcomes in patients with brain metastases were similar to patients without brain metastases. In October 2016, data from its on-going combination trial of tucatinib with trastuzumab and capecitabine demonstrating clinical activity in HER2+ metastatic lesions to the skin was presented at the 2016 European Society of Clinical Oncology meeting.

In December 2016, updated data from the Phase 1b trial showed encouraging safety and anti-tumor activity in patients with and without brain metastases, with an updated median PFS of 7.8 months (a 24% improvement over prior median PFS), ORR of 61% and a median duration of response of 10 months. Patients with and without brain metastases had similar response rates. The combination of tucatinib with trastuzumab and capecitabine was well-tolerated. Most treatment-emergent adverse events were Grade 1, with few tucatinib dose reductions and no required prophylactic use of antidiarrheal agents. These updated data were presented at the 2016 SABCS meeting.

In December 2016, the company reported that following a meeting with the FDA and discussions with its external Steering Committee, the company had amended the ongoing HER2CLIMB Phase 2 clinical trial of tucatinib by increasing the sample size so that, if successful, the trial could serve as a single pivotal study to support registration. HER2CLIMB is a randomized (2:1), double-blind, controlled pivotal clinical trial comparing tucatinib vs. placebo in combination with capecitabine and trastuzumab in patients with locally advanced or metastatic HER2-positive breast cancer who have had prior treatment with a taxane, trastuzumab, pertuzumab and T-DM1.The primary endpoint remains PFS based upon independent radiologic review, and the sample size has increased to approximately 480 patients, including patients already enrolled in the trial. Key objectives related to assessing activity in brain metastases include a key secondary endpoint of PFS in a subset of patients with brain metastases. All patients will be followed for overall survival.

Preclinical Programs

Checkpoint kinase 1 inhibitor

Checkpoint kinase 1 (Chk1) is a protein kinase that is activated in response to DNA damage and DNA replication stress. Together with other cellular factors, Chk1 provides a coordinated “checkpoint” to arrest the cell division cycle in response to damaged DNA. The induction of this cell cycle checkpoint enables cells to repair DNA lesions and ensures the fidelity of the cell division process. Cancer cells commonly have mutations that reduce or eliminate the activity of DNA damage response factors that function in parallel with Chk1. These mutations make tumor cells more reliant on the activity of Chk1 to provide cell cycle checkpoint control, which may make them more sensitive to Chk1 inhibitors and produce a synergistic tumor killing effect when combined with DNA targeted chemotherapy drugs.

Cascadian Therapeutics has identified a lead development candidate, CASC-578, which is an orally available, highly potent and selective Chk1 inhibitor. CASC-578 was developed in collaboration with Sentinel Oncology Ltd., Cambridge, United Kingdom. See Part I, Item 1, “Business—Collaborations” for additional information.

Immuno-oncology

Cascadian Therapeutics has identified novel antibodies to TIGIT, an immune receptor that may block the induction of adaptive and innate immune response to cancers. The TIGIT antibody program is in preclinical development and is part of the collaborative effort with Adimab for the discovery of novel antibodies against immunotherapy targets. See Part I, Item 1, “Business—Collaborations” for additional information.

License and Collaboration Agreements

Array BioPharma Inc. In December 2014, the company entered into a license agreement with Array. Pursuant to the license agreement, Array has granted it an exclusive license to develop, manufacture and commercialize tucatinib. The license agreement replaced a development and commercialization agreement under which the company and Array were previously jointly developing tucatinib. As part of the agreement, the company paid Array $20 million as an upfront fee. In addition, the company will pay Array a portion of any payments received from sublicensing tucatinib rights. Array is also entitled to receive up to a low double-digit royalty based on net sales of tucatinib by it and a single-digit royalty based on net sales of tucatinib by its sublicensees. The term of the license agreement expires on a country-by-country basis upon the later of the expiration of the last valid claim covering tucatinib within that country or 10 years after the first commercial sale of tucatinib within that country.

Sentinel Oncology Ltd. In 2014, the company entered into a research collaboration agreement with Sentinel for the discovery of novel Chk1 inhibitors. Under the agreement, the company made payments to Sentinel to support their chemistry research. Cascadian Therapeutics is responsible for preclinical and clinical development, manufacture and commercialization of any resulting compounds. Sentinel is eligible to receive success-based development and commercial milestone payments up to approximately $90 million based on development and commercialization events, including the initiation of toxicology studies under the FDA’s good laboratory practices (GLP) regulations, the initiation of certain clinical trials, regulatory approval and first commercial sale. Sentinel is also entitled to a single-digit royalty based on net sales.

Adimab LLC. In 2014, the company initiated a collaboration with Adimab for the discovery of novel antibodies against immunotherapy targets in oncology. Cascadian Therapeutics has sole responsibility for the manufacture, development and commercialization of any antibody product candidates that result from the collaboration. The collaboration is currently at an early preclinical development stage. Adimab is entitled to certain research funding, success-based development milestone payments of up to $17 million and a low single-digit royalty based on net sales.

The company's objective is to obtain, maintain and enforce intellectual property protection for its pipeline candidates and other proprietary technologies; to preserve its trade secrets; and to operate without infringing on the valid proprietary rights of other parties. The company believe the protection of patents, trademarks and other proprietary rights that the company own or license is critical to its success and competitive position. The company rely on a combination of patent, trademark, copyright, trade secret, confidentiality agreements and other measures to protect its proprietary rights.

With respect to its development candidates, as of December 31, 2017, the company owned three U.S. patent and 20 patent applications in other jurisdictions. In addition, as of December 31, 2017, the company had licensed approximately 182 issued patents and 81 patent applications from third parties, mostly on an exclusive basis. The patent portfolios for its leading product candidates as of December 31, 2017 are summarized below.

Tucatinib. In the United States, the composition of matter for tucatinib is covered by U.S. Patent No. 8,648,087, entitled “N4-phenyl-quinazoline-4-amine derivatives and related compounds as ErbB type I receptor tyrosine kinase inhibitors for the treatment of hyperproliferative diseases,” which will provide patent coverage for tucatinib until 2031. Cascadian Therapeutics has also licensed U.S. Patent No. 9,693,989, with the same title. Patent applications corresponding to U.S. Patent No. 8,648,087 have issued in Australia, Canada, China, Columbia, Europe, Hong Kong, Indonesia, Israel, Japan, South Korea, Mexico, Philippines, Russia, Singapore, Ukraine and South Africa. Corresponding patent applications are pending in Brazil, Egypt, India, Israel, Norway and Russia. These foreign patents and patent applications, if issued, are not due to expire until at least 2026. The Array patent portfolio also includes other issued patents and pending patent applications drawn to tucatinib formulations, polymorphs and methods of use in the U.S. and in many foreign jurisdictions.

The patents and patent applications covered by the Array License Agreement are prosecuted by Array and reviewed and monitored by outside legal counsel on behalf of the Company.

CASC-578. CASC-578, a Chk1 kinase inhibitor, is licensed from Sentinel. The Sentinel Chk1 kinase inhibitor patent portfolio includes two issued U.S. patents, U.S. Patent No. 8,716,287, entitled “Pharmaceutical compounds,” and U.S. Patent No. 9,630,931, entitled “Pharmaceutically active pyrazine derivatives,” and a U.S. patent application, all of which are drawn to compounds and compositions that inhibit Chk-1 kinase activity. A foreign patent application also drawn to compounds and compositions that inhibit Chk-1 kinase activity has issued in Europe. The current U.S. issued patents and patent application, if issued, are not due to expire until at least 2031. The European patent is not due to expire until at least 2032.

The CASC-578 patent portfolio includes a pending U.S. patent application covering substituted pyrazoles, many of which have Chk1 inhibitor activity. Related foreign patent applications are pending in Australia, Brazil, Canada, China, Europe, Hong Kong, Indonesia, Israel, India, Japan, South Korea, Mexico, Malaysia, New Zealand, Philippines, Russia, Singapore, Ukraine and South Africa. The currently pending U.S. and foreign patent applications, if issued, are not due to expire until at least 2035. Certain jurisdictions may provide mechanisms for restoring a period of patent term consumed by regulatory review. The company will take advantage of all opportunities to extend the patent term in each jurisdiction where Cascadian Therapeutics is able to do so.

CASC-674. CASC-674, an antibody program against an immuno-oncology target known as TIGIT, was obtained from Adimab LLC. Cascadian Therapeutics is collaborating with Adimab for the discovery of novel antibodies against TIGIT. As of December 31, 2017, Cascadian Therapeutics has one patent application directed to TIGIT.

Certain jurisdictions, including the U.S., Japan and Europe, provide mechanisms for restoring a period of patent term consumed by regulatory review. The company plan to take advantage of all opportunities to extend the patent term in each jurisdiction where Cascadian Therapeutics is able to do so.

Manufacturing

The company use third party contractors to procure the necessary materials and manufacture, as applicable, starting materials, active pharmaceutical ingredients and finished drug product, as well as for labeling, packaging, storage and distribution of its compounds. This arrangement allows it to use contract manufacturers that have extensive Good Manufacturing Practices, or cGMP, manufacturing experience. Cascadian Therapeutics has a staff with experience in the management of contract manufacturing and in the development of efficient commercial manufacturing processes for its products candidates. The company currently intend to outsource the manufacture of all its commercial products.

The company believe that its existing supplies of tucatinib, along with its contract manufacturing relationships with its existing contract manufacturers, will be sufficient to supply tucatinib for HER2CLIMB and other

The pharmaceutical and biotechnology industries are intensely competitive, and any product candidate developed by it will compete with existing drugs and therapies. There are many pharmaceutical companies, biotechnology companies, public and private universities, government agencies and research organizations that compete with it in developing various approaches to cancer therapy. Many of these organizations have substantially greater financial, technical, manufacturing and marketing resources than Cascadian Therapeutics has. Several of them have developed or are developing therapies that could be used for treatment of the same diseases that Cascadian Therapeutics is targeting. In addition, many of these competitors have significant commercial infrastructures that the company do not currently have. The company's ability to compete successfully will depend largely on its ability to:

  • design and develop products that are superior to other products in the market and under development;
  • attract and retain qualified scientific, product development, manufacturing and commercial personnel;
  • obtain patent and/or other proprietary protection for its product candidates and technologies;
  • obtain required regulatory approvals;
  • successfully collaborate with pharmaceutical companies in the design, development and commercialization of new products;
  • compete on, among other things, product efficacy and safety profile, time to market, price, and the types of and convenience of treatment procedures; and
  • identify, secure the rights to and develop products and exploit these products commercially before others are able to develop competitive products.
  • The company's ability to compete may be affected by government policies relating to the pricing and reimbursement of proprietary drug products and the policies of insurers and other third-party payors encouraging the use of generic products, all of which may make branded products less attractive to buyers from a cost perspective.

Tucatinib. Tucatinib is an inhibitor of the receptor tyrosine kinase HER2, also known as ErbB2. Multiple marketed products target HER2, including the antibodies trastuzumab (Herceptin®) and pertuzumab (Perjeta®) and the antibody toxin conjugate ado-trastuzumab emtansine (Kadcyla®), all from Roche/Genentech. In addition, GlaxoSmithKline markets the dual HER1/HER2 oral kinase inhibitor lapatinib (Tykerb®) for the treatment of metastatic breast cancer, Puma Biotechnology is developing the HER1/HER2/HER4 inhibitor neratinib in Phase 3 clinical trials.

Research and Development

The company devote a substantial portion of its resources to developing new product candidates. During the years ended December 31, 2017, 2016 and 2015, the company expended approximately $44.0 million, $27.5 million and $23.5 million, respectively, on research and development activities. Higher research and development expenses during the year ended December 31, 2017 was primarily due to greater activity related to the development of its product candidates.

Employees

As of December 31, 2017, the company had 71 employees. A number of its management and professional employees have had prior experience with other pharmaceutical or medical products companies.

The company's ability to develop marketable products and to establish and maintain its competitive position in light of technological developments will depend, in part, on its ability to attract and retain qualified personnel. Competition for such personnel is intense. Cascadian Therapeutics has also chosen to outsource activities where skills are in short supply or where it is economically prudent to do so.

None of its employees are covered by collective bargaining agreements and the company believe that its relations with its employees are good.


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