Astex Pharmaceuticals Looks Beyond Dacogen

Most news items about Astex Pharmaceuticals (NAS: ASTX) focus on the company's profitable drug Dacogen. However, on Monday the company announced movement in its pipeline beyond Dacogen. A phase 1 clinical trial has been initiated for HSP90 inhibitor AT13387, with phase 2 to follow.

Phase 1 of the study will include up to 52 prostate cancer patients, who will be given one of two different treatment regimens of AT13387 in combination with abiraterone acetate. Phase 2 will include up to 112 patients, with some patients using the best combination regiment from the first phase.

A little speculation
The announcement of an early stage study doesn't really mean a lot in and of itself, of course. The variables and risks involved make any discussion totally speculative. That won't stop us from speculating just a little, though.

AT13387 is a small molecule inhibitor of HSP90, a protein believed to be a key factor in tumor cells becoming cancerous. Astex looks for the drug to possibly control the spread of solid tumors, even ones that have become resistant to initial therapy.

The Astex study focuses on using AT13387 to treat patients with castration-resistant prostate cancer who no longer respond to standard treatment. More than 215,000 men are diagnosed with prostate cancer each year in the U.S, and 28,000 related deaths occur annually -- making prostate cancer the second leading cause of cancer death among American men.

These statistics helped drive sales for Zytiga, made by Johnson & Johnson (NYS: JNJ) , to $200 million last year. Some think the drug could reach the $1 billion mark annually as it gets used earlier in the treatment process.

Zytiga's success has been largely at the expense of Provenge, which is sold by Dendreon (NAS: DNDN) . Provenge garnered $213.5 million in sales in 2011.

Now, let's speculate. What if AT13387 does very well in the phase 1 and 2 studies and is able to progress relatively quickly through the late-stage trials, ultimately gaining FDA approval? To achieve this level of success, it would prove to be a more effective treatment than Zytiga because of the way the clinical trials are designed.

Successful clinical trials with AT13387 could open up a huge revenue source for Astex. After all, some expect Zytiga to be a blockbuster drug. AT13387 could follow in its footsteps. But we're just speculating. The studies could just as easily prove to be disappointing.

Furthermore, even if the trials go well, other rivals threaten to succeed with their own drugs. Medivation (NAS: MDVN) and Astellas Pharma recently received FDA approval for prostate cancer drug Xtandi. Thomson Pharma reports that the consensus forecast is for the drug to reach $1.2 billion in sales by 2017.

Back to reality
Regardless of how AT13387 does in these early stage trials, Astex seems to be a stock worthy of consideration. Back in July, fellow Fool Sean Williams covered three great reasons for investors to watch the company closely. These reasons are still applicable.

Astex continues to reap the benefits from Dacogen. But with promising products in its pipeline, including but not limited to AT13387, the reality for Astex looks encouraging even beyond its workhorse drug.

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Fool contributor Keith Speights owns no shares in the stocks mentioned above. The Motley Fool owns shares of Johnson & Johnson and Dendreon. Motley Fool newsletter services have recommended buying shares of and creating a diagonal call position in Johnson & Johnson. The Motley Fool has a disclosure policy.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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