Currents of Disruption: Targeted Therapies Improve Cancer Outcomes

 In Market and Investment Insights

Global Life Sciences Co-Portfolio Manager Ethan Lovell discusses how faster, more accurate diagnoses followed by targeted therapies are transforming the way we tackle cancer treatment, leading to better clinical outcomes while reducing inefficiency in health care delivery.

Key Takeaways

  • Artificial intelligence, robotics and other technologies provide better diagnoses more quickly.
  • Better understanding of different types of cancers means more targeted therapies and immuno-oncology treatments are available to tackle specific tumors.
  • Such disruption is improving outcomes for patients and may provide opportunities for active investors who understand both the science and the market.

Dex McLuskey: Good morning, good afternoon, good evening and welcome to the Janus Henderson Knowledge Shared Disruption podcast. As Global Technology Co-Portfolio Manager Denny Fish pointed out in our last edition, “The global economy is in the early stages of a digital transformation that will impact every company in every industry over the coming years.” Health care is no exception. And we’re joined today by Ethan Lovell, who co-manages the Global Life Sciences strategy, to discuss some of the ways that advances in medicine are resulting in better clinical outcomes for patients while also removing inefficiencies from health care delivery. Thanks for taking the time to join us, Ethan.

Ethan Lovell: Well, thanks for having me.

McLuskey: The starting point for most people with the health care system is that they injure themselves or they feel lousy or they see something that makes them think, “Wait a minute, I don’t remember that.” But, you know, say you’re a construction worker in Colorado and it’s 6:00 a.m. and you have to get to work. But of course, your doctor is still asleep, and the chances of getting a same-day appointment are remote anyway, or you can’t take time off to go see them or whatever. So, from the outset, there is inconvenience, there is delay and there is inefficiency.

Lovell: So yeah, you raise a really valid point. Instead of having to go and visit your physician later that day or maybe later on in the week when, you know, the symptoms have worsened, where you’ve been inconvenienced, maybe you’ve lost some productivity at work, telemedicine allows you to access the system immediately, maybe, you know, through your cell phone you are able to speak with a physician right away. You can send that individual images, they can take a look at, you know, the back of your throat and, based on this interaction, get you immediately to the pharmacy if there’s a prescription that, you know, they feel needed to be written. Or maybe they need to refer you on if it’s something a little more serious, they can tell you that you need to go to the urgent care center. So those are the ways in which we’re improving the efficiency, and there’s a tremendous savings there to be had as well.

McLuskey: So you’re on your way. How do these savings shore themselves? Who benefits from the savings standpoint?

Lovell: Exactly. So you can think about this in terms of, you know, what it takes to actually have a physician office in place and to keep hours and to have staff available who can process you administratively. You eliminate all that. So the payers love this because they’re seeing the cost of a doctor visit at less than half of what it would be if you actually went to the doctor’s office in person. And you, the person who has this benefit, presumably offered by your employer, are seeing almost no cost. In many cases, the way that the financial arrangement is set up, you’re not even incurring an office visit or a copay.

McLuskey: Wow, so it’s more efficient. You’re getting on your way faster, and it’s at a lower cost. This sounds you know, like, a tremendous advance for everyday aches and pains and for simple diagnostics of, say, minor ailments. But as you mentioned, you know, if there’s something a little more serious in there then, you know, what can they do from, like, say this doctor in Brooklyn says, “Hey, you’ve got to go see someone urgently. Something could be, you know, pretty seriously amiss here”?

Lovell: Absolutely, that happens. So, you know, you could be referred on to see your primary care physician. You may need to have some kind of an image taken, a chest x-ray or otherwise. We have digital imaging available today. That’s something that’s been around, and we’ve seen that transformation take place, but what’s probably going to be more impactful and more disruptive as we move forward is the integration of this digital imaging technology with robotics and AI. So, you have a situation where maybe something on your initial scan comes back, it doesn’t look quite right, there’s a lesion there, you don’t know exactly what to do. You know, in the state of the art today, you would probably adopt a watch-and-wait approach. And that’s because most of the lesions you would see, for example, on your lung are benign, and they’re not cancerous. And if you went in and actually conducted a biopsy procedure to do the diagnosis, it’s a very invasive procedure with a lot of potential consequences of having done it. So the adoption of robotic technology and AI, and the integration of that with the digital imaging improves the efficiency of the procedure. It reduces the side effects and now, instead of, you know, wondering, “Is that lesion going to grow?” and, you know, having to schedule another visit, you know, weeks down the road, you can get at that right away, get a definitive diagnosis and, you know, if it’s something that is cancerous, then, you know, move down the continuum right away and potentially, you know, get after that with therapy at an earlier point in time.

McLuskey: OK, so you mentioned lung cancer there, so give us a specific application of that. So you go and you get your scan. What happens after that in terms of using computers, using algorithms, using robotics and going to a procedure to get a sample to be biopsied? How does that system work?

Lovell: Yeah, so if you’ve actually been referred on to a specialist at a hospital that has some of this technology in place, it can happen right then and there. So, you know, the future of the future is this, you get admitted or you get referred to an institution. They actually perform that diagnostic procedure and on the spot make a definitive diagnosis of whether or not that’s a cancerous lesion or not. Same procedure, same day, you actually go and have the lesion excised. So you’ve undergone the primary treatment and then immediately get referred on to have the appropriate therapy for your lung cancer. So that sample gets sent to the lab, and they turn around a result that tells you, “Hey, you have this type of lung cancer. The most appropriate treatment for you is X.”

McLuskey: How do AI and robotics fit into this?

Lovell: So the important part of the procedure is that it is an algorithm that helps you navigate to the site of that lesion. So maybe it’s in a distant part of your lung that’s very difficult to access. So you, the operator, the physician who is actually performing the procedure has preoperative and inner-operative planning that goes on where you can visualize exactly where it is you’re going in the lung to get to that lesion and get a very good sample of the material so that you get that definitive diagnosis. And without the robotics and without the algorithm software that supports it, your chances of getting that definitive biopsy go down dramatically.

McLuskey: So what that does in the example of lung cancer patients especially, as you point out, is that there’s a potential to find out much more quickly what the issue is and presumably therefore, as you said, bring in treatment for cancers that are at a less advanced stage. So turning to treatments, let’s stick with lung cancer. It seems like a good example to run with. How well is our understanding of lung cancer developing and how is that impacting treatment?

Lovell: Yeah, that’s where the innovation that’s taking place in the biopharmaceutical industry is having such an impact. So for decades and decades, we’ve actually been treating lung cancer with a one-size-fits-all strategy. You get double chemotherapy at front-line and singlet chemotherapy if you progress and you’re on second-line therapy, but that’s it. And chemotherapy has with it a significant amount of toxicity, and it’s only been able to prolong an individual’s life by a matter of months. Now, we have a much better understanding of exactly what it is that goes on to drive differing types of lung cancers. So there can be mutations that take place that develop and are specific to your type of lung cancer that demand a targeted therapy, which is much better than the chemotherapy that we had up until more recent years.

McLuskey: So let’s take a sample of, say, 100 imaginary patients under chemotherapy, what proportion of them would benefit and looking at some of the new therapies, how has that changed?

Lovell: Yes, so some numbers. If you gave 100 people with lung cancer an initial diagnosis, chemotherapy, maybe 30% of them would respond. And 70% of those individuals would be getting chemotherapy unnecessarily. They’re getting the toxicity, the expense, there’s a lot of support that goes into addressing somebody with lung cancer, but they’re not getting any benefit. With the advent of these targeted therapies and something called immunotherapy, we’re able to get at a much higher percentage of the individuals who have lung cancer. Something in the range of perhaps 60% to 65% of those individuals would respond to initial therapy. Now, what’s better and what’s more important as we develop these therapies over time is we really understand what it is that’s going on. So not only are we addressing a larger percentage of the individuals, but they’re getting a much more durable response. And in some cases, we may actually be approaching a point where you can get to a fundamental cure. So somebody who has a lung cancer diagnosis you, know, will die of something else. They become a lung cancer survivor.

McLuskey: So give us an idea of how some of these mutations and rearrangements and markers that you were talking about, give us examples of a few of them and what kind of therapies these people are benefiting from.

Lovell: Sure. So for example, there are things that are called driver mutations. So you have a single-point mutation that takes place in a pathway that governs how fast your cells grow and divide, right. And that’s this uncontrolled cell division is what is tantamount to developing the cancer. EGFR is one example. There’s a company AstraZeneca who has a drug called Tagrisso that addresses that specific point mutation. So you have a driver mutation, it’s driving the growth. You block the mutation and you block that growth, and you’re able to prolong somebody’s life by several orders of magnitude, longer than they would if you had given them chemotherapy.

McLuskey: Are there others?

Lovell: Absolutely. So, you know, you might have this EGFR mutation, you might have what’s called an ALK translocation or a ROS1 mutation. So there are a number of different reasons you have lung cancer, and we have therapies for each and every one of those. We’re going to discover that there are going to be more mutations that drive not only primary lung cancer, but recurrence, and we’re going to have drugs to treat those as well.

McLuskey: So let me get this straight. Instead of giving chemotherapy to just everyone, so you take someone with one of these ALK-positive lung cancers and they need what, something called …?

Lovell: An ALK inhibitor.

McLuskey: An ALK inhibitor. And what happens if you give that to someone with one of these ROS-positive lung cancers?

Lovell: Exactly, so I think you’ve hit on a really important point. Nothing happens. And so the integration of getting that definitive diagnosis and knowing exactly what it is that is causing the cancer in this patient is important in driving the therapy of choice because one of those therapies is going to prolong their life for years, and the other therapy is going to do nothing for them.

McLuskey: So targeting these markers and these mutations with these precision therapies, is that immuno-oncology?

Lovell: No, it’s actually something slightly different. So we have these markers for the genetics of the disease. And in the case of immunotherapy, we do have markers, but what they are is markers of how ready your body is to respond to the cancer that is growing inside your body. So there’s something called a PD-L1 marker, and what it is is a sign of how active the immune system is inside your body, but that it is being held back by other checkpoints that are in place. And what you need to do is give somebody an immunotherapy to unlock that break and allow your body to eradicate the cancer. And we’ve seen some of the most dramatic responses and some of the most durable responses in patients with high PD-L1 status who have been given what’s called an anti-PD-1 drug.

McLuskey: So there are these drugs on the market already?

Lovell: Absolutely. So the two most commonly used anti-PD-1 therapies are a drug called Keytruda from Merck and a drug called Opdivo from Bristol-Myers Squibb.

McLuskey: Yeah, we’ve seen those being advertised on the television quite extensively. So who responds to these, and are these just monotherapies that people just get given instead of chemotherapy?

Lovell: So right now, we have several options for administering these anti-PD-1 therapies. So as I mentioned, PD-L1 status is a predictor of whether or not you will respond. In patients who have very high PD-L1 expression, giving monotherapy anti-PD-1 therapy extends their life. And that’s behind the early adoption of these therapies. Beyond that, there’s a group of individuals who have intermediate PD-L1 status. And what we’ve found is you can actually improve survival in those individuals by giving a combination of anti-PD-1 therapy and chemotherapy. So we saw data from that at a conference called ASCO earlier this year where effectively, the chance of dying was cut in half if you were given that combination. Now going forward, one of the things that’s going to be really interesting is we understand more and more about how your immune system attempts to eradicate cancer, we’re going to be developing combinations of immunotherapies. So there is another therapy on the market called Yervoy, which is an anti-CTLA 4 drug that is used in combination with anti-PD-1. But we’re going to see other therapies developed that synergize with the therapies we have today and again, I think there will be a point in time in the future where we’re managing cancer as more of a chronic disease and not one where you give a therapy to extend life but ultimately, that person still dies.

McLuskey: So we’re very much focusing on lung cancer for this conversation, but do these therapies apply only to lung cancer or is this like a platform that can be applied to other diseases in the class?

Lovell: Yeah, so we’re learning more and more about disease and the causes. So there are you know, diseases that are caused by a single mutation at birth, and, you know, you have therapies that are meant to address that. In fact, we’re even, we’ve come up with gene therapies that would work in those monogenic diseases. But we’re also learning about the predilection for generating some of these diseases based on a number of different mutations that might develop over time or based on the environment in which, you know, you exist. One of the areas that I think is interesting is again in cancer, you know, lung cancer’s an exquisite example, but we have other cancers like breast cancer where, you know, we’ve developed ways to stratify patients and to develop targeted therapies there as well. So you can be, you know, hormone-positive, you can be HER2-positive, and you’ll get a different set of therapies depending on which of those diagnoses that you get. But immunotherapy is also looking very promising in breast cancer as well. And if you are not HR-positive, PR-positive, HER2-positive, so there’s three different diagnoses there, if you’re not one of those, then you are what’s called triple-negative breast cancer, and you would receive an immunotherapy. We’re going to see some data coming out just later this year that, you know, by all accounts, should be positive data that will lead to another option for those patients.

Turning back to targeted therapy, there are drugs that work really well in hormone-positive breast cancer. So one of those is a drug from Pfizer called Ibrance, which was just introduced a few years back. Novartis has just announced that they have a targeted therapy that works in what’s called PI 3-kinase mutant breast cancer and those data, which again are to be presented in the future, but where we know they were positive, address a population that has already received Ibrance or these other therapies of that class. So again, you can see that the industry is working to fill in all the gaps and again, our understanding of the disease is moving forward quite rapidly based on technologies like next-generation sequencing, which has made doing the genetic analysis much quicker and much, much cheaper.

McLuskey: So in conclusion, we’re running out of time, unfortunately. It’s a fascinating discussion. But the takeaway is that the combination of improved diagnostics and better understanding of different types and causes of cancer is making the treatment of these diseases much more targeted, much more precise and much more efficient both clinically and financially.

Lovell: Absolutely. This is something, you know, we’ve called personalized medicine, right. And again, getting back to the idea that we used to give everybody a one-size-fits-all therapy, what we’re finding out is what you really need is the therapy that’s just right for you at that moment in time, and it’s this scientific explosion, if you want to call it that, of understanding of the genetic predisposition that’s allowing us to create those individual therapies, which are truly impactful and of high value.

McLuskey: Speaking as an investor, what are you looking for? What goes into your decision making in terms of balancing the downside risk with the upside potential?

Lovell: When we’re looking at products and technologies that could transform the way that care is delivered and that therapies are administered, what we are doing is we’re traveling to medical conferences and we’re speaking with physicians and we’re speaking with companies that are working on these technologies and we’re doing our very best to, you know, read all the literature and to evaluate the science. That’s why we have a very deep and experienced team with a scientific background. And we’re marrying all of that information, you know, with models that will help us predict whether the clinical outcomes are going to be favorable clinical outcomes. So it’s not just whether a product works or doesn’t work, it’s the design of the study, it’s the execution of the study, you know, who are you working with, what other clinical trial sites and what does that portend of the success or the failure of the clinical development that’s going on? But then, you know, models and discussions with experts around reimbursement. So if the data come out as follows, a 30% reduction in your risk of dying because you’ve gotten the therapy that is new and innovative versus the standard of care, is that relevant? How relevant? You know, what does that translate into from a commercial point of view? Where could you price this product? What would the rate of penetration of the product in the market be, again, based on modeling, discussions, you know, continuous updates? We conducted a number of surveys, especially when a product is launching. Evaluating the side effect profile in the real world relative to what was experienced in the clinical setting, because those patients are very well managed. When you’re in a clinical trial setting versus out in the field, and you can maybe miss a dose or maybe, you know, you’re somebody that wasn’t captured by the initial clinical trial experience.

McLuskey: Ethan, thanks so much for taking the time to talk to us today. It’s been a fascinating discussion about how improvements in diagnostics and our understanding of key diseases like cancer can lead to better outcomes for patients. Thanks.

Lovell: It’s been a pleasure. Thank you very much.

Disruption is creating compelling investment opportunities for those who know where to look. Learn how to harness the power of disruption in your portfolio.

The health care industries are subject to government regulation and reimbursement rates, as well as government approval of products and services, which could have a significant effect on price and availability, and can be significantly affected by rapid obsolescence and patent expirations.

C-1018-20177 12-30-20

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