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Black Diamond Therapeutics, Inc. (NASDAQ:BDTX) is a precision oncology company targeting genetically defined cancers. It calls its approach the Masterkey approach, which aims to provide one solution for many types of cancer mutations and address the disease in a much broader range of patients than current precision therapies can access. Its oral therapies are designed to target families of oncogenic mutations including drug-resistant mutations, and are also designed to cross the blood-brain barrier and penetrate the CNS. However, the molecules are also designed to target selectively, thus curtailing side effects.
The company’s pipeline looks like this:
BDTX PIPELINE (BDTX WEBSITE)
Lead asset BDTX-1535 is an EGFR targeting molecule enrolling in a phase 2 trial in NSCLC. Data is expected in Q3 2024. The same molecule is also in a phase 1 trial in GBM. Another molecule, BDTX-4933 targeting RAF is in a phase 1 trial targeting KRAS mutant NSCLC and RAF/RAS mutant solid tumors, with data expected in Q4.
In late June, this languidly trading stock suddenly jumped 80% overnight (ending up at 300% in a 3-day timeframe) after posting concept-validating phase 1 data in NSCLC from BDTX-1535. In another piece of positive news, the company received end of phase 1 feedback from the FDA which has enabled them to initiate a Phase 2 cohort in first-line patients with non-classical EGFR mutant NSCLC.
In December, the company announced data from the GBM trial. This was a dose escalation trial in patients with recurrent glioblastoma, a disease with the worst kind of prognosis in the entire cancer space. These patients also expressed epidermal growth factor receptor (EGFR) alterations at the time of their initial diagnosis (BDTX-1535 is a covalent EGFR inhibitor). There are no approved therapies in the recurrent GBM setting.
In the dose escalation cohort, 27 patients received a range of doses spanning 15mg to 400mg once daily (QD’). PK/PD data from this study was previously presented, in October. Data showed that BDTX-1535 was well-tolerated up to 300mg QD. There were no safety/tolerability surprises, and the profile was consistent with other EGFR TKI drugs. At dose levels ≥100mg QD, expected EGFR coverage was achieved. The most common treatment-related Grade 3 events were rash, diarrhea, fatigue, decreased appetite, and stomatitis. There was 1 DLT at 300mg QD, which was determined to be the MTD [DLT – dose-limiting toxicities; MTD – maximum tolerated dose].
Coming back to the December data, as I said, these were heavily pretreated patients where all except one had received prior temozolomide. Other prior treatments included chemotherapy, bevacizumab, checkpoint inhibitors, or investigational agents. Median of 2 prior lines of therapy (range 1-4) were taken by patients.
As to efficacy data, historical PFS (progression-free survival) is 2-4 months in this patient population. Here, in this trial, 3 patients were on therapy longer than 10 months, 1 patient longer than 6 months, and 5 patients longer than 4 months. This brings the mean PFS in these 9 patients a little over 6 months. Other key data:
- The patient on therapy the longest remains on BDTX-1535 at 100mg QD for over 15 months with prolonged disease stabilization. This patient had previously progressed after 3 months of temozolomide treatment.
- Of the 19 patients with measurable disease by Response Assessment in Neuro-Oncology (RANO) criteria, 1 patient achieved a confirmed partial response (PR’) and 8 patients experienced stable disease (SD). The patient with the PR stayed on treatment for longer than 4 months at 200 mg QD.
The molecule is undergoing a ‘window of opportunity’ trial in GBM sponsored by an outside entity. These trials are designed to exploit the time between cancer diagnosis and treatment initiation by using investigational, promising therapies. As a Nature article notes:
In recent years this study design has become a more regular feature of drug development, as this ‘window’ provides an opportunity to carry out a thorough pharmacodynamic assessment of a therapy of interest in tumours that are unperturbed by prior treatment.
This trial, held in 22 patients in Arizona, will assess PK and pharmacodynamics (PD’) in brain tissue prior to a planned resection (surgery). If it is found that patients under this treatment with BDTX-1535 reach adequate drug levels in the gadolinium non-enhancing regions of the tumor, they will continue with 1535 following surgery. We will know more about the data in Q2.
The company intends to initiate enrollments for the assessment of 200 mg QD of BDTX-1535 in two expansion cohorts for non-small cell lung cancer (NSCLC) as a late-line treatment option.
Financials
BDTX has a market cap of $140mn and a cash balance of $143mn. Research and development (R&D) expenses were $16.2 million for the third quarter of 2023, while general and administrative (G&A) expenses were $7.9 million. At that rate, the company has a cash runway of 5-6 quarters. Given the increasing expenses they will incur up ahead with later-stage trials, they will need funding very soon.
The company is heavily owned by institutions and PE/VC firms, while retail has a small 11% ownership. Key holders are Bellevue Group AG and NEA Investment Fund. Insiders are regular buyers and there is nobody selling stock.
Risks
BDTX is a very early-stage company with promising data, however, it has a long way to go before it is thoroughly derisked.
Meanwhile, the cash position is not very strong given the upcoming trials, so expect a dilution soon.
Trading volume is also relatively low.
Bottom line
The company has good data and is trading at or below cash. There is not much to lose if you buy this stock now, despite the huge spike it has seen in the last few months. The stock has also gone down considerably from its post-trial highs, so this is as good a time to buy as any. I recommend a cautious, low volume pilot buy at this time.
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