Biotech sector expert John McCamant discusses President Obama's recently announced Precision Medicine Initiative; here, the editor of The Medical Technology Stock Letter, explains the program, the advantages of precision medicine, and highlights a trio of cancer-research biotechs poised to benefit from this developing market.
Steven Halpern: Our guest today is Biotechnology sector expert John McCamant, editor of the Medical Technology Stock Letter. How are you today, John?
John McCamant: Excellent, Steve. My pleasure to be here.
Steven Halpern: Well, thanks for joining us. Today, we’re going to discuss what is called precision medicine. First, could you explain what this means, in general, and how it differs from what you would consider the ‘one-size-fits-all’ approach?
John McCamant: Certainly. Precision medicine is, basically, every human body is a little different, so that, specifically, when we develop new drugs, they may not work in every patient with the disease that it’s targeted for.
Herceptin is probably the poster child here in that this is a very great, big breakthrough breast cancer drug from Genentech, but to take the drug, they know it works much better in a certain subset of patients and these are HER2+, so they had a diagnostic test to screen the breast cancer patients and roughly somewhere about 30% will have the HER2+ and those are the ones that get treated with Herceptin.
Initially, people feared that that would make the market smaller. These markets are still very large, Steve, but most importantly, these things also work very well with insurers. Instead, before these diagnostic tests, I might have given Herceptin to maybe upwards of 60% to 70% of breast cancer patients where it might not have been very effective.
Steven Halpern: Now, the topic has been in the news recently as President Obama has unveiled the Precision Medicine Initiative. Could you explain this program and how important this recognition is to help push research in this area?
John McCamant: That’s a great question, Steve, so that this perspective 2015, this literally is dovetailing what happened in the year 2000 with the sequencing of the human genome.
Since that time, we have accumulated huge amounts of biological information, if for no other reason than the power of Moore’s Law, over 15 years. So what took ten, twenty thousand dollars to sequence a genome 15 years ago, can now be done for 10 or $20 potentially.
So, we’re really getting maybe the muscle we need to manage all of this genetic information and from that we’re starting to find out different profiles for different patients.
The best example with this is cancer, we’re moving beyond breast cancer, per se, or colon cancer, and we’re talking about things like I mentioned earlier, Steve, HER2+ cancers, which can be other places in the body, where Herceptin might also be effective. Basically, a molecular signature, Steve, would be one way to think about it.
Steven Halpern: Now, how has the President addressed this, in terms of just bringing it to public awareness or is there money being put into these programs?
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John McCamant: Well, that’s a great, great question and there is a significant amount of money being put into this process, which is really important to what we’re seeing here and this is historically what the United States has done when there’s a need for finding a new area.
So, they’re providing money across the board, particularly to the NIH, which will get into the NCI, and also money to create databases, and these are all things that are already being done in private industry, so that ends up dovetailing very nicely with what’s going on in the real world, Steve.
Steven Halpern: Now, in your latest commentary, you note that this Precision Medicine Initiative could almost be called the Precision Cancer Initiative, given its specific emphasis on cancer research. Could you expand briefly on that?
John McCamant: Sure, Steve—from 5,000 feet—over half of the drugs are candidates and vaccines and drugs in development in the biotech industry are targeted for cancer or side effect of cancer, basically.
In addition, as we understand more, and as we transition to learning more about what’s called immune oncology, and the interaction between the immune system and cancer, and how cancer has been turning off some of our natural components of our immune system, specifically T cells.
So, while we’re also learning to kill cancer with these traditional drugs and the new ones like Herceptin, which attack cancer cells, we’re also stimulating T cells or our body’s own immune system to fend off and continue to fight the cancer.
So, this is really kind of something that has been talked about off and on for 20 plus years within biotech and we’re turning the corner now, so immune oncology and precision medicine are basically one in the same thing.
Steven Halpern: Let’s turn quickly to a few companies that might benefit from this increased focus on oncology research and one that you like is Isis Pharmaceuticals (ISIS). Could you share your thoughts?
John McCamant: Well, Isis is a leader in the antisense technology and this is a way to deliver their antisense drugs that target specific genetic sequences. They’re very specific. Today, we’ve had very few side effects, but a potentially strong, on-target effect.
That’s very important in immune oncology—as the goal, we believe over time—is some of these cancer patients could be treated with two, three, or four different drugs or targets with maybe a different payload all at once.
And if any one of those has excessive toxicity, could be really exaggerated in combinations, so safety is going to be very important in immune oncology as we combine these drugs, and to date, Isis has been very specific and they have a very interesting compound target STAT3 that’s partnered with AstraZeneca (AZN), one of the leaders in this space.
Steven Halpern: Now, another company you point to is Sangamo BioSciences (SGMO). Could you tell us about that company?
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John McCamant: Sangamo is clearly a second generation gene therapy technology. They can do a couple of different things than the first generation, but their technology is specifically it’s a rifled approach.
They can get right into the specific point within the genome and change one gene on or off, versus the first generation gene therapies that literally are shotgun and they use the virus—blast your body with the virus and the genetic information and see where it sticks—basically, Steve.
So, very particularly, second generation gene therapy technologies are very important, and vectors are also important in this space, as this is how you get more specificity into delivering the genetic information. They are using non-viral vectors, which are safer, we believe, and also would potentially allow for re-treatment.
Phase II did an HIV therapeutic cure, we’ll get more of that data this year Sangamo, amongst many other Phase I programs and they have very interesting beta-thal, which is also being developed by Bluebird bio (BLUE), but the bigger subset, there is sickle cell disease, Steve, which is a very large market opportunity.
Steven Halpern: Now finally, one stock that you just recently added to your portfolio is ZIOPHARM Oncology (ZIOP). Could you tell us about that?
John McCamant: Exactly, Steve. ZIOP probably fits the precision medicine profile better than anybody. We believe that they are a clear second generation gene therapy cancer company.
They just signed a very exciting partnership with MD Anderson, one of the world’s leading academic centers, and with that, they accessed exclusive rights to Sleeping Beauty; I really love that name.
What that is, it’s a very sophisticated delivery system for genes, so it’s non-viral and it’s very precise, so they can go exactly into the genome where they want and change genes on a one-off basis. In addition, ZIOPHARM has incorporated a turn on or off switch, since some of these CAR-T therapies and these really sophisticated therapies, they have very high side effects. Literally, they almost work too well, and cause something called Tumor Lysis Syndrome.
If you had a large tumor buried in your body, these therapies work so well, they will kill you as they spit out all the cancer.
What you can do, the patients are monitored, obviously, Steven, they have an on/off switch, a pill, so if the patient is getting a major fever and they see the tumor lysis syndrome get out of control, all they do is give them a pill and a glass of water and they can turn the therapy right off.
I think that safety component and control is what, potentially, gets us to also off-the-shelf therapies, where instead of personalized taking the cells out, a couple of weeks of customizing the one-off, we can really get personalized therapies that come off the shelf, Steve, that is basically the Holy Grail here.
Steven Halpern: Again, we have been talking with John McCamant, editor of the Medical Technology Stock Letter, one of the most exciting and profitable newsletters in the industry. Thank you so much for joining us.
John McCamant: My pleasure, Steve.
