TopoTarget at a Glance

What products do TopoTarget have

• The only product left in TopoTarget’s pipeline is Belinostat.  All other major productlines have been sold of or otherwise disengaged, latest the product Totect was disvestmented late 2011. With only one product –  TopoTarget is, what some might call a an OTP (One Trick Pony). So basically its make or break with Belinostat…There are a few other insignificant options in their pipeline, but they are of little or no value.

Belinostat – what’s that:

• Belinostat is a HDAC inhibitor.
• A HDAC inhibitor is also knows as a : Histone Deacetylase Inhibitor – HDI’s have been used as to reduce mood swings and as a against epilepticsin in both psychiatry and neurology. Lately HDI’s are being extensively investigated as possible novel treatments for cancers and inflammatory diseases. The HDI’s are a new class of cytostatic agents that inhibit the proliferation of tumor cells in culture and in vivo by inducing cell cycle arrest, differentiation and/or apoptosis.
• HDAC basic knowledge can  be found here http://en.wikipedia.org/wiki/Histone_deacetylase_inhibitor

Where can  Belinostat be used ?

• Belinostat is applicable as monotherapy or in combination-therapies.
• PTCL (Peripheral T–Cell Lymphoma) and  CTCL   (Cutaneous T–Cell Lymphoma) As monotherapy Belinostat has shown promising results against PTCL – cancer; both cancertypes are aggressive but relatively rare. This is an advantage in getting permissions and fast track status – but the flip side of the coin is that the market is smaller.
•  As part of a combination-therapy  called BelCap (Belinostat with Carboplatin and Paclitaxel (known as CaP)) against solid tumors, and BelCaP has demonstated advantages in treatment of CUP (Cancer Unknown  Primary tumor), as well as NSCLC (Non Small Cell Lung cancer), Ovarian Cancer and Bladder cancer.
• Belinostat is also mentioned in connection with treatment of HIV, Diabetes, prostatic cancer and Pancretic cancer amongst others, however these studies are at very early stages

Who owns Belinostat?

• TopoTarget owns Belinostat. TopoTarget sold the rights to market Belinostat in the US, India (as well as signed an option on the Chinese market)to US-based Spectrum Pharmaceuticals. TopoTarget are entitled to royalties of Spectrums sales in these areas – probably around 15-30 % (percentage have not been disclosed –  this is an estimation)  Spectrum will, in addition to the royalty, pay 70% of all development costs related to studies on the effects off Belinostat.

What is the PTCL BELIEF ?

• A phase II pivotal registration study on the effect of Belinostat  against PTCL (see link above). Spectrum Pharmaceuticals pays 100 % of all expenses of this study, expectations are that data will be at hand in Q4 2012, and that they (Spectrum/Topo) will apply for a NDA (New Drug Applikation) at the  FDA (US – Food and Drug Administration). Spectrum/TopoTarget have obtained a SPA (speciel protocol assesment) including fast track access and an orphan drug designation. This means that FDA have helped designed the study, and that  if the primary endpoint is achieved, the chances of getting approval are quite high. The primary endpoint of the BELIEF study is 20 % ORR (overall response rate) – Other studies have already shown an overall response rate of 32 %. Fast Track gives FDA 6 months (after completion of the NDA) to come up with an answer, normally the procedure takes 12 months. PTCL is a rare disease, and the Orphan drug permit gives TopoTarget/spectrum special rights in the market, amongst these rights – extraordinarily high prices.

What is the CUP study (also known as CLN-17) ?

editors note: TODAY THE RESULTS SHOWED THAT THE CUP- STUDY DID NOT MEET PRIMARY ENDPOINTS – THIS ARTICLE WILL IS UNDER REVISION

• The Belinostat CUP-study is a  randomized multicenter-study, a placebo – controlledphase II study where CaP is compared with BelCaP on patients who suffer from  (CUP).

This study is very interesting for a number of reasons. First of all it is the first randomized study with BelCap on solid tumors, and the study will give a clear indication on what we can expect in the future from this unique combination-therapy Presently there is NO effective therapy against CUP. The Study was initiated april 2009 and final recruitment was made in december 2010. Data will be provided end of june 2012

the primay endpoint of the study is progressionsfree survival (PFS) (http://lymphoma.about.com/od/glossary/g/progressionfree.htm). Untill now CaP treatment have resulted in a PFS of 4-6 months. BelCaP must as a  MINIMUM have an improvement of 20%  in relation to the standard CaP therapy  in order for TopoTarget to see the study as succesfull If the study demonstrates a  PFS of more than 60 %, then the study will be nothing less than spectacular and create headlines worldwide within the industry.

How do TopoTarget make money?

• Presently TopoTarget do not make money, au contraire. Actually they have been tremendously succesfull in maintaing a negative cashflow and poor results. In 2010 TopoTarget received $30 million upfront payments from Spectrum and are elligble to  $320 million milestones in addition to 15-30 % in roylaties (an estimated guess  – no percentage have been disclosed) . On top of that TopoTarget have the rights to sell Belinostat on all other markets that those where Spectrum operate. Nonetheless – TopoTarget is burning cash at an alarming rate – and success and milestones on belinostat is paramount
• The latest financiel report can be found here.

What is the potential of TopoTarget?

•  editors note (NB: After today’s disappointing CUP-study results I am sure that the will be revised by Investor89) –

• In short, Belinostat has Blockbuster potential – i.e. sales of more than $1 billion. But the range is from $300 million up to $3 billion. Presently no one knows, but lets assume that Belinostat turns out to be a blockbuster , at 25 % royalty on a yearly basis this will give DKK 1,4 billion a year (with the present exchange rate).  Cost and taxes will probably take away 25% and leave you with a result of DKK 900 million.  With A very conservative estimated P/E at 10  – TopoTarget will have  a market cap of DKK 9 billion DKK  –  or  an upside of approx. 2000 %

Disclaimer – this is primarily based on a translation of a danish text from Investor89, I have been adding some explanations on the abbreviations, and done some editing including modifying  remarks of a more general nature  – I have next to no specific knowledge on TopoTarget or the financial estimates here..