Boston Biotech Could Have Blockbuster Sales
Research Report

Tango Therapeutics (TNGX:NASDAQ) has started a Phase 1/2 clinical trial testing their drug TNG348 for treating certain cancers, noted H.C. Wainwright & Co. analysts Robert Burns and Dr. Raghuram Selvaraju in a January 3 research note. 

TNG348 is an inhibitor that blocks the activity of a protein called USP1. Previous lab studies showed that inhibiting USP1 specifically kills cancer cells that have mutations in genes involved in DNA repair pathways like BRCA1/2. The trial is testing TNG348 by itself and together with olaparib, another drug already approved for BRCA-mutated cancers.

The goal is to see if TNG348 works against cancers with BRCA mutations or other issues causing deficient DNA repair (called homologous recombination deficiency or HRD). There is a rationale for targeting USP1 in these cancers - USP1 levels are elevated, and inhibiting it further disrupts DNA repair. However, TNG348 is not the only drug aimed at this target, so there is competition from other companies. The trial has now started treating patients to evaluate the safety and efficacy of using TNG348 for hard-to-treat mutated cancers either as a standalone or combined with other therapies like PARP inhibitors such as olaparib.

Previous lab studies showed that using TNG348 together with PARP inhibitors like olaparib or chemotherapy drugs killed more cancer cells than either treatment alone. Adding TNG348 also re-sensitized cancer cells to olaparib that had become resistant. This suggests combining TNG348 with other therapies may be more effective.

Risks Mitigated

Investors should note that other pharmaceutical companies are also developing USP1 inhibitor drugs that could compete with TNG348:

• Roche recently licensed a USP1 inhibitor called KSQ-4279 from KSQ Therapeutics and plans to further develop and commercialize it.
• Exelixis recently licensed another USP1 inhibitor called ISM3091 from Insilico Medicine. Lab data showed this drug and KSQ-4279 inhibit cancer cell growth at lower concentrations than TNG348, suggesting they may be more potent.

"MRTX1719's and AMG 193's dose-escalation results mitigate TNG908/TNG462 development risk, in our view," Burns wrote.

Comparable To Other Companies

Burns also pointed out that last year, Mirati Therapeutics and Amgen reported early clinical trial results for their respective MTAP-cooperative PRMT5 inhibitor drugs, MRTX1719 and AMG 193. These drugs target cancers with deletions in a gene called MTAP, which occur in about 10% of all cancer types.

As Burns explained, loss of the MTAP gene leads to a build-up of MTA in cells. Prior research showed MTA can bind and inhibit PRMT5, an enzyme involved in cancer growth. So MTAP-deleted cancer cells become especially vulnerable to further blocking PRMT5.

The early data on MRTX1719 and AMG 193 supports this approach. For MRTX1719, 33% of efficacy-evaluable trial patients saw tumor shrinkage without the toxicities caused by early PRMT5 inhibitors. And for AMG 193 given at higher doses, the response rate was 28%.

 Burns stated that these response rates help mitigate risk for Tango's lead MTAP-cooperative PRMT5 drug, TNG908. Lab data indicates TNG908 has a similar cancer-fighting ability as MRTX1719. Additionally, Tango has a backup PRMT5 inhibitor called TNG462 that may work even better.

In conclusion,  Burns stated he expects to see initial clinical data for TNG908 in 2024, which will provide insight into its real-world efficacy in MTAP-deleted cancers versus competitors.

Potential Blockbuster Sales

 As Robert Burns highlighted, Tango's targeted pipeline drugs have potential in both rare and common cancers. Though some indications, like malignant peripheral nerve sheath tumors, affect only hundreds of patients, other genetically-defined tumors driven by alterations like MTAP loss and BRCA1 mutations are far more prevalent, affecting hundreds of thousands of patients. So, while the rare cancer focus allows personalized approaches for smaller groups, expanding into broader genetically selected populations opens up larger commercial opportunities for Tango's selective pipeline assets. 

"While the rare cancers represent target populations of a few hundred individuals each, the more prevalent types may constitute populations totaling hundreds of thousands of eligible patients," Burns said. "In our view, this confers strategic flexibility as Tango could elect to self-commercialize its
candidates in the niche indications and select appropriate strategic partners to achieve optimal penetration in the larger markets."

Burns forecasted a total peak sales (for TNG908/TNG462, TNG260, and the company's USP1 inhibitor) of around US$5 billion by 2030 if the initial launch is by 2026. 
"The company could achieve blockbuster annual sales (i.e., >$B) driven by these compounds as early as 2028. In our view, these agents could be priced in the US$14K/month range, in keeping with the pricing observed for an array of other synthetically lethal agents," he wrote.

With this, the report gave Tango a Buy rating, with a US$16 target price. 

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Disclosures for H.C. Wainwright & Co., Tango Therapeutics Inc., January 3, 2024

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H.C. WAINWRIGHT & CO, LLC RATING SYSTEM: H.C. Wainwright employs a three tier rating system for evaluating both the potential return and risk associated with owning common equity shares of rated firms. The expected return of any given equity is measured on a RELATIVE basis of other companies in the same sector. The price objective is calculated to estimate the potential movements in price that a given equity could reach provided certain targets are met over a defined time horizon. Price objectives are subject to external factors including industry events and market volatility.

H.C. Wainwright & Co, LLC (the “Firm”) is a member of FINRA and SIPC and a registered U.S. Broker-Dealer. I, Robert Burns and Raghuram Selvaraju, Ph.D. , certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.

None of the research analysts or the research analyst’s household has a financial interest in the securities of Tango Therapeutics, Inc. and Exelixis, Inc. (including, without limitation, any option, right, warrant, future, long or short position). As of November 30, 2023 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Tango Therapeutics, Inc. and Exelixis, Inc.. Neither the research analyst nor the Firm knows or has reason to know of any other material conflict of interest at the time of publication of this research report. The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services. Mr. Selvaraju, who is [the][an] author of this report, is the Chairman of and receives compensation from Relief Therapeutics Holding SA, a Swiss, commercial-stage biopharmaceutical company identifying, developing and commercializing novel, patent protected products in selected specialty, rare and ultra-rare disease areas on a global basis ("Relief").

You should consider Mr. Selvaraju's position with Relief when reading this research report. The firm or its affiliates received compensation from Tango Therapeutics, Inc. for non-investment banking services in the previous 12 months. The Firm or its affiliates did not receive compensation from Tango Therapeutics, Inc. and Exelixis, Inc. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report. The Firm does not make a market in Tango Therapeutics, Inc. and Exelixis, Inc. as of the date of this research report. The securities of the company discussed in this report may be

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