https://external-preview.redd.it/Z3VvmbWJRtxHHLBRxgO0VpP5JaYrLPHbOEE29UhczE0.jpg?auto=webp&s=9afe4a1b1e1f56275ca1b045323fc8d51a7ccf99
Hi Friends, Seagen is a pharmaceutical company that specializes in oncology (study of cancer). Seagen acquired Cascadian Therapeutics in 2017 for $10.00 a share, citing the pipeline drug Tucatinib’s usefulness in inhibiting ‘HER2+ receptors responsible for breast, colorectal, ovarian, and gastric metastatic cancers.
This proved not to be the best investment however, and Seagen cannot simply warehouse this project. Instead, the company began pumping out data in mid 2020 showing that Tucatinib taken with Trastuzumab would successfully treat metastatic breast cancer.
[Tucatinib, Trastuzumab, and Capecitabine for HER2-Positive Metastatic Breast Cancer – PubMed (nih.gov)](https://pubmed.ncbi.nlm.nih.gov/31825569/)
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By early 2022, Seagen had begun to backtrack on these claims and said that the Tucatinib-Trastuzumab cocktail would only treat metastatic breast cancer if the patient had tried other regimes such as chemotherapy. The problem with this is that cancer cells that weren’t eliminated during chemotherapy could spread elsewhere in the body. The Chemotherapy also involves other drug cocktails which may introduce their own side effects.
Furthermore, people only believed that this drug was a clear winner because they originally thought that it would replace more invasive therapies.
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By March-April 2022, Seagen had completely shifted their focus to proving that Tucatinib-Trastuzumab could eradicate colorectal cancer. Only for those who have tried other regimes like chemotherapy first.
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In the videos below, doctors attempt to promote the Tucatinib-Trastuzumab treatment. However, based on their consistent stuttering, they acknowledge that Seagen has completely disappointed. Seagen has went from promising complete treatment of breast cancer with the drug cocktail to only promising treatment of colorectal cancer only for those who have previously attempted more invasive techniques.
The doctors in the videos are also intentionally vague about the drug’s ability to prevent brain metastasis, a key side effect of these experimental drugs.
[Dr. Chien on Tucatinib in HER2+ Breast Cancer – YouTube](https://www.youtube.com/watch?v=ZaLoDoQ3klI)
[HER2CLIMB-05: tucatinib with trastuzumab and pertuzumab as maintenance therapy for HER2+ mBC – YouTube](https://www.youtube.com/watch?v=G6Si31-cRdM)
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The company also doesn’t really give the FDA a chance to postpone the decision and ask for additional data by shoving the MOUNTAINEER-03 phase 1, 2 and MOUNTAINEER-02 phase 3 trial results up their faces. According to Seagen, “the overall survival and safety and tolerability of the combination regimen are secondary objectives”.
[Seagen – Seagen Announces TUKYSA® (tucatinib) in Combination with Trastuzumab Granted Priority Review by FDA for Previously Treated HER2-Positive Metastatic Colorectal Cancer](https://investor.seagen.com/press-releases/news-details/2022/Seagen-Announces-TUKYSA-tucatinib-in-Combination-with-Trastuzumab-Granted-Priority-Review-by-FDA-for-Previously-Treated-HER2-Positive-Metastatic-Colorectal-Cancer/default.aspx)
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In short, Seagen’s experimental drug only reverses some of the many side effects that is also causes while failing to eliminate the main culprit. Seagen’s clever maneuvers however have landed them priority review for the drug.
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The PDUFA date for this drug is 01/19/2023. Unless several voting members have positions on this stock, the committee won’t have an incentive to recommend the FDA to approve this drug. Seagen’s competitor Morphosis have already lowered 2023 guidance for forecasted sales on monoclonal anti-body cancer treatments, so the committee won’t be accumulating shares in this industry for now.
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The strategy is to accumulate Put contracts with 01/20/2023 expiry on Wednesday 01/18/2023. The stock will likely be suspended pending news for the whole trading day of 01/19/2023 before a massive share price decrease afterhours.
Another important thing to be aware of is that the PDUFA action consists of an independent committee recommending the FDA on how to handle the priority review. 1-2 weeks after this PDUFA action, the stock will experience another share price decrease when the FDA officially notifies the company of the rejection.
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I simply cannot see the FDA approving a drug that fails to eliminate the main culprit \[breast cancer\] while causing a bunch of other side effects of which only some would be eliminated after a second treatment.
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## Edit
I might have gone a little off topic when discussing why Seagen isn’t getting the pdufa recommendation.
The committee is only considering Tucatinib’s merits on colorectal cancer, and nothing else. Seagen already has other FDA approved drugs that can do the same job with significantly lesser side effects, so the FDA would not want to put a risky drug on the market known for unpleasant side effects without additional testing.
Seagen originally branded Tucatinib as being able to treat metastatic breast cancer but cannot apply for FDA approval under this claim since they messed up on their patient group crossover during their 2:1 double random trial. Company reported results of the trial as statistically significant regardless of the mishap.
[https://www.onclive.com/view/tucatinib-plus-trastuzumab-elicits-responses-in-crossover-cohort-in-her2-mcrc](https://www.onclive.com/view/tucatinib-plus-trastuzumab-elicits-responses-in-crossover-cohort-in-her2-mcrc)
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The company’s executives are gambling on their company’s future. They are too proud to admit that they are wrong. Instead of trying to secure FDA approval based on one specific drug combination that includes Tucatinib, they are going all in and trying to prove that the drug is multipurpose in curing metastatic cancers. As a result, a bunch of their studies are all over the place, using drug combinations that normally wouldn’t be allowed under normal circumstances and causing unnecessary deaths.
Seagen was able to use the different drug combinations in their trials done during the past 3-4 years without prior FDA consent because they were protected under FDA’s 1984 orphan drug act after meeting the criteria for treating a rare disease. Breast Metastatic cancer and colorectal cancer isn’t a rare disease, so likely some strings were pulled in securing the designation.
Company’s stock price will likely gap down in three phases: (i) after pdufa announcement, (ii) after offical fda denial of the application, (iii) after official discontinuation of the drug.
Company’s stock will however see a high chance of being acquired by Merck after: (i) divesting some of its assets, (ii) stopping all cash burn on its other ongoing trials related to Tucatinib, and (iii) being down 80% from its all time high.
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I clicked on this because I thought it said “Best SNORTING Opportunity in a long time.” I was disappointed.
The only danger is $mrk really is looking for a buyout, so always dangerous when there is a white knight
Statistically the best time to short a biotech is after bad news gap down, highly likely to keep fading another 25-50% after that if they don’t have any pending results within the year. The trick is to avoid the initial dip buyers or dip buy yourself then flip to short afterwards.
If you are dumb enough to short a company this strong then you really are in the right forum.
>I agree, it does not seem likely that the FDA will approve this drug.
Data has shown, in your NEJM article for breast cancer and in the most recent follow up data [here](https://www.annalsofoncology.org/article/S0923-7534(21)04879-1/fulltext)at nearly 30 months that OS and PFS were significantly improved in the tucatinib arm versus placebo. Both manuscripts also report good tolerability with low percentages of patients discontinuing therapy due to AEs. I’d do a little more homework before making claims that the HER2Climb regimen was ineffective in a difficult to treat indication such as metastatic BC. It has since been approved by the FDA for this indication. Also Seagen has had the most success with their ADC pipeline over any other drug maker in this class. 3 approvals for ADCs alone. Edit-forgot to mention the HER2Climb population was also heavily pretreated with trastuzumab, pertuzimab and TDM-1 and the tucatinib arm still showed improvement in OS and PFS.