The medical breakthroughs that could help us win the war on cancer
Despite advances, the battle against cancer was beginning to look lost. Matthew Partridge looks at the companies that have turned the tide.
In January 1971, the US president, Richard Nixon, launched what became known as the War on Cancer'. "The time has come in America when the same kind of concentrated effort that split the atom and took man to the moon should be turned toward conquering this dread disease", said Nixon, as he passed legislation to boost government funding for cancer research. Since then the American government has spent more than $500bn in the area. On top of that, you have the huge amounts spent by drug companies, universities and charities.
Yet despite all this investment, the results so far have been less impressive than we might have hoped. Survival rates have risen across the board, but the biggest gains have come from prevention efforts such as anti-smoking campaigns and earlier, better diagnosis rather than from dramatic advances in treatment.
Meanwhile, an ageing population and a drop in the death rate from other causes means that, even in America (seen as the most advanced nation when it comes to cancer treatment), the total number of deaths has more than doubled since the 1970s. Worldwide, medical journal The Lancet estimates that there were eight million deaths from cancer in 2010, nearly 40% more than in 1990. The Lancet also predicts that the number of cancer diagnoses could double in the next two decades.
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This lack of progress has led Fortune editor Clifton Leaf, himself a cancer survivor, to conclude that "we are far from winning the war. So far away, in fact, that it looks like losing." In his book, The Truth In Small Doses, Why We're Losing The War On Cancer And How To Win It, he argues that the whole effort has been mismanaged. Regulatory bodies take too long to approve drugs and researchers care more about the basic science (such as how tumours work) than about finding a cure. Professor Silvia Formenti of New York University agrees: "the progress in reducing mortality is quite questionable".
But the good news is that things may be improving. Regulators are starting to realise that too much caution has been counterproductive and are making efforts to speed up trials. Advancing computer technology helps drug companies to produce more effective drugs, more quickly. And the rise of biotechnology and novel therapeutic approaches is creating new pathways for researchers to explore. These changes mean that clear progress is starting to be made, even for two key conditions that have long been regarded as incurable': lung cancer and brain tumours.
Tackling lung cancer
In terms of sheer numbers of cases, and the dismal prognosis, lung cancer is the most serious form of cancer. Only a third of lung cancer patients survive for more than a year after diagnosis, with less than 10% remaining alive after five years, according to Cancer Research UK. In the most aggressive cases, survival can be measured in weeks rather than months. The American Cancer Society estimates that it now accounts for 14% of all cancer diagnoses. Although fewer people now smoke in developed countries, this is only slowly reducing the number of cases, while a growing number in developing countries are taking up the habit.
This makes it a high priority for improved treatment. And a new discovery may point the way forward. Until very recently it was assumed that all lung cancers fell into just a few types. However, now we know that within these types, there are subgroups based around specific genetic mutations. Some of these subgroups respond particularly well to specific drugs. So one approach that many experts think could improve survival rates is to tailor treatments for each individual, rather than give all patients the same drugs.
One supporter is Professor Roy Herbst of Yale University and Smilow Cancer Hospital, who strongly believes that genetic analysis will become a "very important" part of lung cancer treatment. In 2010, one of Herbst's patients was given three months to live. But he gave her a drug tailored to her particular mutation, and she is still alive today.
While you can't generalise from one case, broader studies back up the approach. Research published in the last few months in the prestigious New England Journal of Medicine suggests that a drug targeted to a specific lung cancer subtype that affects non-smokers halved the speed of progression, compared with general chemotherapy. Overall, those receiving the specialised therapy lived 1.4 years longer than those receiving conventional treatment a major improvement given the severity of the cancer. Many of the drugs in these targeted attacks use the body's own defences to attack cancer cells.
As Tom Bulford notes in the Red Hot Biotech Alert newsletter, this is all part of the field of cancer immunotherapy', perhaps the "hottest area in medical research today". These monoclonal antibody' drugs recognise particular molecules in cancer cells, either alerting the immune system to their presence, or enabling other drugs given as part of the treatment to attack them. One example of such a drug is nivolumab, which has extended lifespans and boosted survival rates in advanced lung cancer patients who had failed to benefit from other treatments. Interestingly, some of the patients' immune systems continued to fight the cancer even after the drug was stopped, suggesting that it had a permanent effect.
Another way to improve survival is to get to the cancer earlier. Although lung cancer is usually deadly, the outlook is surprisingly promising if it is caught before it has spread to other organs. For instance, people with non-small-cell lung cancer (the most common type) have up to a 75% five-year survival rate if diagnosed at stage 1A (where the tumour is less than 3cm), but only a 7%-9% survival rate if diagnosed at stage 3B (by which time it has spread into nearby lymph nodes).
The problem is that people with lung cancer only experience serious symptoms at a late stage, so it can be misdiagnosed as bronchitis, tuberculosis, or even a bad cold. Proactive screening attempts have been less than successful. In the 1970s, there were hopes that regular chest X-rays could help, but it became clear that the dangers of regular radiation exposure outweighed any benefits. Even scans with modern, low-radiation X-rays seem to have little impact on survival rates.
However, a study by the National Cancer Institute found that switching from X-rays to spiral CT scanners can save the lives of current smokers, or ex heavy-smokers, over the age of 55. Thanks to US healthcare reforms, insurance companies are expected to make regular CT scans for high-risk groups a core part of their prevention programmes.
Even this solution is not perfect, as there are a large number of false positives. But Allegro Diagnostics is developing a genetic test that should make it possible to identify smokers who are at particular risk of developing tumours in their lungs.
Better treatments for brain cancer
Brain tumours are less common than lung cancer. But in the last three decades the incidence as well as actual numbers of brain tumour diagnoses have gone up. It is also the second-most prevalent type of cancer in children under 15, accounting for just over one in three deaths from cancer in this age group. While the chances of survival for children and young adults are relatively good, the prognosis quickly declines with age. Overall, nearly two-thirds of victims die within a year of diagnosis, with five-year survival rates running at around 15%.
Brain tumours pose several challenges. They can be extremely aggressive, progressing rapidly. They also tend to envelop healthy brain tissue, meaning that in many cases the risk of severe brain damage or instant death from destroying nearby healthy tissue is simply too high to attempt surgery. As a result, patients have to fall back on alternatives, such as chemo and radiotherapy. Since these are less direct, they have a lower success rate. Even apparently successful surgery may leave malignant cells behind, allowing the cancer to return.
However, advances in laser technology could improve things greatly. The latest laser systems require only the insertion of a probe the diameter of a pencil. This dramatically cuts the risk of complications and the required recovery time. For example, one product, the NeuroBlate Thermal Therapy System, combines laser treatment with an MRI imaging system. This allows a surgeon to fine tune the amount of heat directed at a tumour. Doctors at both Cleveland Cancer Centre and the University of Miami Hospital were able to remove previously inoperable tumours within minutes with this tool, boosting survival times for patients with advanced cancer.
There has even been talk of developing completely non-invasive approaches. One interesting avenue, pioneered in Russia and China, is the use of photodynamic therapy (PDT). This combines external lasers and light-sensitive drugs. As the laser lights up, the drugs become active, destroying the tumours.
Of course, PDT has its limitations. It can't be used on large tumours, or on those contained deep within the brain (since the skin limits the penetration of the lasers). There is also controversy about its overuse by some unlicensed clinics. However, several peer-reviewed studies suggest it is an effective complement to (though not a substitute for) conventional treatment. Many recognised cancer centres around the world, including several NHS hospitals, currently use it.
And last year, Israel's Novocure received approval from the US regulator the Food and Drug Administration for a system that delivers charges to the skull, known as tumour treatment fields. The idea is to create an electrical field, which prevents the cells in the tumour from dividing. By stopping them growing, they will eventually die. Clinical trials have shown that stand-alone treatment with the device is at least as effective as chemotherapy in otherwise inoperable tumours, with far fewer side effects. The hope is that when the system is combined with the drugs, lifespan can be significantly extended.
Of course, even the best surgical techniques often cannot prevent cancer returning, especially in the case of extremely aggressive types of tumours. This is one reason why scientists are also working on vaccines against various types of cancer. Like the monoclonal antibody drugs, these work on the principle of using the body's immune system to provide future protection. In the case of brain tumours the most popular option is to inject parts of cells from dead tumours in the hope of getting the patient's immune system to respond.
While most of the current generation of vaccines undergoing trials use standardised cells, a number of major research hospitals around the world, including King's College Hospital in London, are trialling an approach that involves taking cells from a patient's own tumour. The idea is that this level of personalisation will lead to an even better immune response. So far, the results have been encouraging, with DCVax treatment leading to an immune system response in all patients, rather than just some. The preliminary results suggest that it can more than double life expectancy compared with the current protocols, with little or no side effects.
Seven of the best investments
Investing in bold new biotechnology and pharma treatments is exciting but high risk. Firms can spend millions, or even hundreds of millions, on research and testing, only for a drug to fail at the last stage. So you might want to consider a general healthcare or biotech fund, which invests in multiple companies, spreading your risk.
Two funds worth considering, both run by OrbiMed, are the Worldwide Healthcare Trust (LSE: WWH) and the Biotechnology Growth Trust (LSE: BIOG). Both have performed very well, rising by 123% and 215% in the past five years respectively. Despite this, they both trade at slight discounts to their net asset value.
If you are keen to pick individual winners, or expand your exposure beyond a fund, then we've listed some of the more interesting options below. One firm that will benefit from a more frequent use of CT scanners to detect malignancies in the lungs of heavy smokers and ex-smokers is Analogic Corporation (Nasdaq: ALOG). While Analogic also makes security scanners, its medical imaging segment accounts for 60% of revenue, and is growing quickly. Total sales are expected to grow by nearly 25% in the next two years, which makes it look reasonable value trading on 13.1 times 2015 earnings.
Dr Mike Tubbs of the Research Investments newsletter likes pharmaceutical giant Roche Holdings AG (VTX: ROG), which won US regulatory approval earlier this year for a test that could help doctors target lung cancer therapies, and detect early stage cancer more accurately. Roche, which is also developing many interesting cancer drugs, trades at 13.5 times 2015 earnings.
A riskier, but purer play, is ARIAD Pharmaceuticals (Nasdaq: ARIA). Ariad concentrates on tumours that have shown resistance to standard treatments. While its main drug, Iclusig, has only been approved for chronic myeloid leukaemia, it is currently undergoing trials for use in tackling lung cancer. Ariad is also testing a small molecule, provisionally known as AP26113, that may be useful in treating ALK (one of the few types of lung cancer not related to smoking).
JP Morgan thinks there are likely to be some important developments regarding this drug later this year, and overall reckons the company trades at a large discount to future revenue streams, although clearly that depends on the success of its trials.
An even riskier option is Northwest Biotherapeutics (Nasdaq: NWBO). Its flagship product is the DCVax, which, as mentioned above, has been shown to prolong the lifespan of those with aggressive brain cancer.
While Northwest is closest to getting DCVax approved for brain tumours, it is confident that the principle of personalised vaccines can be applied to cancers in other parts of the body. It is therefore launching trials to have it approved for use in the treatment of prostrate, lung, ovarian, liver, head and neck, and pancreas tumours. It is also developing a monoclonal antibody drug. Although Northwest currently makes a loss, this will change fast if DCVax becomes a standard therapy.
Oncolytics Biotech Inc (Nasdaq: ONCY) is pioneering the idea of using viruses to attack cancer cells. Its researchers have identified a group of viruses that infect and destroy cells that contain malignancies, but don't affect non-malignant cells. It has produced a version of this virus, Reolysin, which has been successfully tested in a large number of preliminary trials.
While Oncolytics hope first to get the treatment approved for head and neck cancer, results suggest it can also shrink advanced lung tumours, with only mild side effects. Oncolytics has enough cash in hand to conclude the testing phase and move to production, if successful. It currently trades at seven times estimated 2016 earnings.
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