Tesaro (TSRO) Weakness a 'Clear Buying Opportunity' - Leerink Partners
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Leerink Partners analyst Seamus Fernandez reiterated an Outperform rating and $108 price target on Tesaro (NASDAQ: TSRO), saying weakness in the stock on on the recent NDA submission of CLVS’ (NR) rucaparib for 3L+ BRCA-mutated ovarian cancer, as well as the circulation of perceived controversies pertaining to niraparib, creates a "clear buying opportunity."
Fernandez said their review of FDA documents finds no firmly-established “6-month PFS bar” required for approval of an agent in 2L ovarian cancer maintenance. "AZN originally submitted Lynparza for accelerated approval as 2L maintenance based on a subset analysis of germline BRCA-mutated (gBRCA) patients from the Phase 2 Study 19 trial. In the prepared remarks at the panel, AZN stated that its discussions with FDA suggested a PFS improvement of 6 months would constitute a clinically meaningful result in the maintenance setting. Nowhere in the FDA's documents does it state that a 6 month bar was set - but a 1.5 month benefit with a 0.72 HR was questioned by FDA as clinically meaningful. Importantly, Dr. Richard Pazdur, director of the Office of Hematology and Oncology at the FDA, did not affirm the 6-month PFS improvement as a minimum requirement for full approval at the advisory panel."
The analyst added that most of the discussion around a 6-month PFS improvement threshold appeared to be related to accelerated approval and in the gBRCA population specifically – neither of which are relevant to niraparib’s review. "In the NOVA trial, niraparib produced clearly meaningful improvements over placebo in PFS in both gBRCAmut patients (15.5 month improvement; HR=0.27; p<0.0001) and gBRCAwt/HRD+ patients (9.1 month improvement; HR=0.38; p<0.0001), leaving only the overall gBRCAwt cohort not clearing the claimed 6-month bar (5.4 month improvement; HR=0.45; p<0.0001). Including the gBRCAmut patients in the overall population likely would exceed this bar anyway. In contrast to Study 19, NOVA is a high quality study, evaluating different patient subsets for full approval of niraparib. We believe that the range of outcomes depends on the totality of the data package. This is supported by AZN’s description of the SOLO2 trial - designed to confirm the hazard ratio seen in Study 19 and to approximate a median PFS benefit of ~6 months. AZN noted that the overall interpretation of SOLO2 results would depend on several factors, including the hazard ratio, median PFS improvement, tolerability, and a lack of detriment on overall survival."
Shares of Tesaro closed at $92.76 yesterday.
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