Going Public on Cancer Stem Cells

OncoMed Pharmaceuticals of Redwood City, CA, raised nearly $82 million in an initial public offering (IPO) in July, suggesting strong stock market interest in cancer treatments that target stem cells.

The IPO came just a few days after Verastem, of Cambridge, MA, which also targets stem cells, raised nearly $64 million from stock sales; and 6 months after a $38 million IPO by Stemline Therapeutics, of New York, NY. Both companies also target cancer stem cells.

Several other successful IPOs in recent months—including Agios Pharmaceuticals, bluebird bio, and Epizyme, all of Cambridge, MA, and Onconova Therapeutics of Newtown, PA—suggest that the appeal extends to other cancer treatments as well.

“There is considerable interest in novel therapies, novel science that has the ability to be transformative for patients, with really good [management] teams,” says Robert Forrester, president and CEO of Verastem. His company is developing treatments for mesothelioma and other cancers, based on small molecule inhibitors of signaling pathways, such as FAK, PI3K/mTOR, and Wnt.

OncoMed discovers and develops monoclonal antibody therapeutics targeting cancer stem cells, cells that have the power to initiate and rejuvenate tumors. Since 2007, OncoMed has partnered with GlaxoSmithKline on developing drugs that target stem cells via the Notch signaling pathway. The company also has an alliance with Bayer for agents that target the Wnt signaling pathway.

The company's most promising drug is demcizumab (OMP-21M18), which blocks Delta-like 4 ligand, an activator of Notch signaling. The drug is now in phase Ib trials for pancreatic and lung cancer in combination with chemotherapy, and soon to be tested in a phase Ib/II trial in recurrent ovarian cancer.

Because OncoMed is in the government-mandated quiet period after its IPO, company officials and researchers involved in its science declined to comment about the firm or its drugs.

Verastem's Forrester says he's pleased with the reception his competitor received in the marketplace. “Their targets look interesting,” he says. “We think they are a world-class company and very deserving of the tremendous reception they got in going public.”

Success is breeding success for innovative cancer biotechs who have promising targets, in Forrester's opinion. The U.S. Food and Drug Administration has been more receptive to targeted approaches, and is often willing to speed up drug approvals to help patients, he says.

This “makes the business side of biotech more attractive,” Forrester adds. “Investing in oncology companies has never looked better than it does today.”