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Tango Therapeutics (TNGX) popped 5-6x times a few days after I wrote a neutral article on July 26. There was no news. In my article I had said that while there are things to like in this nanocap developer of synthetic lethal inhibitor of PRMT5 or protein arginine methyltransferase 5, and while preclinical indications were positive, there was no clinical efficacy data yet, which was keeping the stock stagnant. 2 weeks later, on August 8, the stock went up like a rocket.
What happened?
If you look at the TNGX timeline, you will not find anything on August 8. Sure, they saw the spike and hurried to make hay while the sun shone, by way of pitching for a $80mn offering on August 10. However, there’s no press release, no data drop and no news to indicate why the stock would go up so much on that particular day.
For an explanation, you have to look at Mirati’s (MRTX) timeline. On August 9, Mirati came out with a press release stating that its own synthetic lethality technology produced proof of concept data, both preclinical and clinical. Mirati announced that data from a first-in-human Phase 1/2 clinical trial of MRTX1719, a PRMT5 / methylthioadenosine (MTA)-cooperative inhibitor evaluated in methylthioadenosine phosphorylase (MTAP) deleted cancers, demonstrated that “blocking PRMT5-MTA complex is a rational and differentiated approach to treat cancers harboring MTAP deletion.” In the small, 18 patient study, this was the data we were provided:
There were six confirmed objective responses observed in the Phase 1 study including one patient who achieved a response which subsequently confirmed post-data cutoff
MRTX1719 achieved apparent complete PRMT5 inhibition in MTAP deleted tumor cells at a dose of 200 mg QD as evidenced by pretreatment and on-treatment tumor biopsies of the PRMT5 biochemical biomarker symmetric dimethyl arginine (SDMA)
It was notable that four patients were on therapy for multiple cycles before experiencing an initial objective response, with their tumors continuing to decrease in size over the course of treatment.
These findings suggest that tumor response may continue to deepen over time indicating the importance of evaluating tumor response kinetics and response rates across a broader patient population with longer follow up.
MRTX1719 was well-tolerated with no dose limiting toxicities observed at dose levels up to 400mg QD. None of the patients treated with MRTX1719 experienced dose-limiting adverse events associated with first generation PRMT5 inhibitors such as thrombocytopenia, anemia or neutropenia.
On the back of this moderately positive data, Mirati stock went up about 30%; however, TNGX stock doubled overnight, continuing to gain even further. That TNGX did much better than MRTX on data from MRTX has to be accounted for by the fact that while MRTX1719 is just one among many programs in Mirati’s vast pipeline which includes an approved drug, PRMT5-MTA inhibition using synthetic lethality is Tango’s core program. Also, MRTX at that time had about 10x the market cap of TNGX, so a positive event had a stronger effect on the smaller stock with greater focus on the technology causing that positive event.
Between October 5 and October 13, TNGX stock dropped again, nearly halving overnight, and if you look for an explanation, you won’t find it on TNGX timeline. You have to look elsewhere again. Three things happened during this one week period:
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Sanofi showed takeover interest in MRTX, a perpetual potential M&A target – Oct 5
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BMY agreed to acquire MRTX for $4.8bn, with MRTX1719 being a key part of the rationale, along with Krazati – Oct 8
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Amgen produced proof of concept data from its own PRMT5-MTA program, AMG 193 – Oct 13
To put this in context, synthetic lethality has been besieged by a troubling lack of data. GSK was a major player in the field in 2022, along with Amgen, Pfizer, JNJ and Servier among big pharma. However, after GSK/Epizyme’s PRMT5 inhibitor failed to produce good data, GSK moved away from synthetic lethality, a technology it had once called one of its four key oncology focus areas. GSK chose not to opt in for Ideaya’s PRMT5 inhibitor IDE397, and also discontinued internal research projects using this technology. [Ideaya continues to collaborate with Amgen].
Earlier in 2021, another early PRMT5 targeting therapy developer Prelude Therapeutics produced disappointing results, getting only one remission in a 45 patient trial. So this was the sorry state of affair with synthetic lethality.
BMY’s acquisition of MRTX could have put the focus back on synthetic lethality had MRTX1179 been the core of the acquisition, however, Amgen’s lackluster data once again showed that synthetic lethality still had a data problem.
The data Amgen put up on October 13 showed the following in 31 patients:
Among 31 patients who received at least one scan after starting therapy, five patients with different tumor types experienced a partial response (PR), 14 patients had stable disease (SD), and 12 patients had disease progression. Notably, the PRs were durable and were ongoing at the time of data analysis, when patients had been on treatment for 140-275 days.
In addition, nine patients with SD experienced some degree of tumor shrinkage, although not enough to qualify these effects as PRs. “The mechanism of action of this type of drug may be slow, so we expect the antitumor response to also be slow,” said Rodon [Jordi Rodon, MD, PhD, data presenter,] . “It is possible that with longer follow up, those cases of minor tumor shrinkage may achieve the status of PR.”
Now, in the 2021 Prelude trial, the data showed that there was one CR and 5 SD. Of course, first generation PRMT5 inhibitors showed bone marrow toxicity which Amgen thankfully lacked. However, it does appear that despite the overall broad reach of the treatment (high ORR), that the market must have been expecting higher levels of clinical benefit, including at least some CRs. While the data presenter said by way of an explanation that heavy pretreatment in this patient population may have occulted treatment effect, the market was probably not buying it.
And who did the market punish for Amgen’s poor data? Tango Therapeutics.
Of course, Amgen, which was trading at $280 on October 13, dropped precipitously to $255 immediately after the data, but it didn’t go down by half, like Tango did, because unlike Tango, PRMT5 is not anywhere near Amgen’s core focus.
These are my speculations, of course, but that is what we are supposed to do – speculate, but with data backing up such speculation.
Financials
TNGX has a market cap of $950mn and a cash balance of $360mn. Research and development expenses were $27.1 million for the three months ended September 30, 2023, while general and administrative expenses were $9.2 million. At that rate, the company has a solid cash runway of some 9-10 quarters.
Bottom line
Yes, TNGX has gone up on news from rival companies; however, in retrospect, the MRTX PRMT5 data wasn’t all that impressive either. The synthetic lethality space needs more derisking, which, for TGNX, can only come from its own clearly positive data, if it can get it. Until then, consider TGNX overvalued.
