Description

Summary 

SpringWorks Therapeutics (SWTX) is finally reporting their P3 data for their lead compound nirogacestat after a year of delays.  Nirogacestat has never been studied in a placebo controlled setting before this, and efficacy is very hard to tease out in this slow progressing disease.  The delays have rendered their statistical powering assumptions meaningless and make failure highly likely.  We believe the stock can fall by 50% on failure. 

DeFi Study Has Been Repeatedly Delay Rendering the SAP Meaningless

SWTX’s DeFi study is finally about to read out.  Trial enrollment started in mid 2019.  Enrollment was completed July 22, 2020.  

This is a 140 patient study.  Their powering assumptions were for 8 months PFS in the placebo group and 20 months in the drug group and a total of 51 events.  Primary endpoint of the study is progression free survival (PFS).  Originally it was designed to only include clinical progression as assessed by the investigator.  However in April 2021 they [stealthily] changed it to include radiographic progression as well.  

Timeline for the study has been consistently pushed out.  

In August 2020 they had guided to data readout in 2Q/3Q 2021.

By February 2021 they had pushed it out to 2H 2021.

In Nov 2021 they pushed it out against to 4Q21/early 2022.

In January 2022 they revised the timeline of the readout to early 2022.

In February 2022 they pushed it out again to 1H 2022.

Finally on May 5th, they announced that “activities to enable the topline analysis” were underway and that data was expected to be announced in the 2Q 2022.  It is interesting that this language does not confirm that the 51 events to initiate topline analysis has occurred.  Sell side notes state that management expects topline results in the late May/early June timeframe.  

The original statistical analysis plan (SAP) assumptions of 8 months for placebo and 20 months for drug are clearly no longer relevant with the trial running for ~2 years from the completion of enrollment and ~1 year longer than originally projected.  With the SAP assumptions no longer valid, the bar for nirogacestat to hit statistical significance is far higher.  

Instead of acknowledging that their SAP assumptions meant that the trial was likely to fail, the CEO refused to acknowledge the delay in topline data release was negative for the study all through 2021.  Finally at the Barclays conference on March 16, 2022 the CEO acknowledged the delay and instead assumed it was because of the drug outperforming expectations!

Absolutely. So let's talk -- so let's start with the DeFi study. So we've been explicit now that we expect to share top line data in the second quarter of this year. I'll remind everybody that this is a Phase III double-blind, placebo-controlled, event-driven study where the study is completed at 51 events. We are looking -- the top line primary endpoint is progression-free survival and the study is 90% powered to show a 12-month difference between patients who get placebo versus patients who get drug. And I think that's a very important element to the conversation, right?

  So in that assumption, we're assuming that patients who get drug progress in 20 months, everybody who gets on study has got a progressing event. And patients who are on placebo progressed in 8 months. So as we think of where we are, and we've been pretty explicit about the fact that we've been very close to 51 for an extended period of time. What we think is happening is very consistent with what we saw in our Phase I study and in our Phase II study, which is that patients who get nirogacestat tend not to progress.

  And so what we expect to be showing in our Phase II is that, in fact, our assumption of 20 months to progression for people on drug is actually much longer than that. If that's consistent with everything that we've done in the past that, I think, sets us up not only for a very positive top line, and we've got insight into the study by virtue of the open-label extension of why we expect to be a very positive top line but also to the commercial potential for this drug because it is getting to the durability of the study, right, the durability of the drug and the tolerability of the drug over an extended period of time.

Nirogacestat was abandoned by Pfizer before being picked up by SWTX

The Phase 1 study was a multi-center study of PF-03084014 (the original name of the drug before SWTX in-licensed it from PFE) in advanced cancer patients.  Though the drug overall showed limited activity, it did show that 5 of 7 evaluable desmoid tumor patients had a partial response.  Interestingly, all 7 of those patients were from the University of Colorado.  

In November 2014 the National Cancer Institute (NCI) commenced a Phase 2 study of nirogacestat in desmoid tumors.  This was an open-label single site study.  Seventeen patients were enrolled in this study and had a median of four prior treatments.  Five of the 17 patients had a partial response for an 29% overall response rate.  

The trial was run assuming that 4 patients with a response would qualify nirogacestat as a promising agent.  However, it appears that PFE did not view it that way.  In August 2017 nirogacestat was licensed to SWTX.

Sorafenib study was used to create assumptions for DeFi

The powering for the Phase 3 DeFi study was from a sorafenib study in desmoid tumors, as well as their own internal chart and literature review.  This Phase 3 trial had 87 patients randomized to sorafenib or placebo.  Sorafenib did very well in this study with a HR of 0.13 on the primary endpoint of PFS.  

One of the important things to notice from the sorafenib trial is just how slow progressing the disease is.  Though the disease control rate (DCR) is 100% for sorafenib, it is also 94% for the placebo arm.  And somehow the placebo also has a 20% PR vs. just 31% for sorafenib.  It can be very hard to tell if a drug is active or not in this indication, especially in single arm studies.  

Combinations with BCMA Agents are not meaningful

Nirogacestat is also being studied in multiple myeloma (MM) in combination with BCMA agents.  The collaborations they have are listed below.  

The idea behind the combination of a gamma secretase inhibitor (GSI) and a BCMA agent is that the GSI will increase the expression of the BCMA allowing for a lower dose.  GSK has been their most advanced collaborator, and we will see some data later this year at ASCO.  But based on GSK’s comments they to have walked back some of their initial enthusiasm for the combination.  

Ultimately, though Blenrep was the first BCMA-targeted agent to be approved, it is not competitive with the new agents being approved by BMY and JNJ.  Though GSK is interested in improving their therapeutic window for Blenrep by combining it with other agents such as nirogacestat, that will likely not be enough compared with Carvykti.  When asked about combining a gamma secretase inhibitor with a potent BCMA agent like Carvykti, the thought leaders did not see the point.

Valuation

SWTX trades at a $1.9B marketcap and a $1.5B EV.  With nirogacestat being the vast majority of the valuation and unclear value proposition in combination with BCMA targeted agents, failure of the DeFi study will cause the stock price to fall significantly.  Assuming $500M residual value for the pipeline would yield ~$17 price target.  

Catalyst

DeFi Study readout in 2Q 2022