Acquisitions /mergers/joint-ventures

Pfizer is in final talks to acquire Allergan (Dublin, Ireland) in an all-stock transaction which would value Allergan at nearly $150 billion, the biggest health care deal ever. According to well-informed sources both companies are negotiating a break-up fee of 2-3% with an upper range at $4.5 billion, indicating that Pfizer does not view the very recent statement of the US Treasury Department anti-inversion regulations as a plausible cause to derail the deal (see below).

Business

Pierre Fabre (Castres, France) and Array BioPharma  have entered a development and marketing agreement valued at $455 million, on  binimetinib, a MEK inhibitor, and encorafenib, a BRAF inhibitor, two investigational cancer drugs Array Biopharma acquired from Novartis. Both drugs are currently in global phase 3 trials for melanoma and ovarian cancer. Under the terms of the deal Array will retain exclusive rights for both drugs in the US, Canada Japan, Korea and Israel, Pierre Fabre will get exclusive rights elsewhere in the world and will pay Array a $30 million upfront, up to $425 million in development, regulatory and commercialization milestones as well as tiered double-digit royalties on sales.

Servier (Paris, France) exercises its option under its collaboration with Cellectis (Paris, France), valued at $338 million, to acquire exclusive worldwide rights to UCART19, Cellectis’ first and lead allogeneic engineered Chimeric-Antigen Receptor–T cell candidate for the treatment for chronic lymphocytic leukemia and acute lymphoblastic leukemia. Under the terms of the agreement, Sevier will pay Cellectis an upfront payment of $38.2million up to $300million in milestones and royalties on commercial sales. In our newsletter # 44 we had reported that Cellectis had successfully implemented a GMP manufacturing process for UCART19.

…and separately enters into a global license and collaboration deal with Pfizer to co-develop and co-commercialize UCART19 worldwide while sharing costs. Under the terms of the deal Pfizer will be responsible for commercialization of UCART19 in the US and Servier outside the US. Under the previous terms between Pfizer and Cellectis, Pfizer had not rights to UCART19.  Financial terms of the deal were not disclosed.

Roche exercises its option to participate in the financial arrangements related to Novartis’s rights in negotiated with Ophthotech (New York, NY, USA) for Fovista or pegplenarib for the treatment of wet age-related macular degeneration.Ophthotech retains exclusive rights to Fovista in the US while Novartis owns exclusive rights outside of the US. Financial terms were not disclosed.

AstraZeneca, Cerulean Pharma (Cambridge, MA, USA) and the US National Cancer Institute agree to collaborate to assess the value of the combination of AstraZeneca’s Lymparza or olaparib and Cerulean’s CRLX101 in patients with small cell lung cancer. CRLX101 is a nanoparticle-drug conjugate designed to concentrate in tumors and slowly release the payload, camptothecin within cancer cells. Olaparib is an enzyme called poly ADP-ribose polymerase (PARP) inhibitor which kills cancer cells by exploiting tumor DNA repair pathway deficiencies.

Eli Lilly and Merck & Co have extended an existing agreement to investigate a combination of their respective drugs Alimta (pemetrexel for injection) and Keytruxa (pembrolizumab) an anti-PD-1 immunotherapy, for the treatment of non-small cell lung cancer.

Sanofi and AstraZeneca agree to share 210,000 of their respective proprietary chemical compounds from their chemical libraries in order to help the launch of new discovery programmes. Both companies will be free to use the compounds without restrictions and there will be no money exchange under the terms of the deal.

Thermo Fisher enters into a long term agreement with Novartis and with Pfizer to develop and commercialize a multi-marker universal next-generation sequencing (NGS) oncology test as a companion diagnostic for non-small cell lung cancer (NSCLC).  The test will be developed using Thermo's Ion PGM Dx system and Oncomine assays, based on its Ion AmpliSeq technology which enables simultaneous sequencing of hundreds of genes with high reproducibility and rapid turnaround time. Financial terms are not disclosed.

Approval of drugs, vaccines, diagnostics and devices   

US FDA approves:

Johnson & Johnson‘s Darzalex, or daratumumab as a treatment of multiple myeloma. Daratumab which carries orphan drug status in the US and in Europe works by binding on the surface of CD38 cells which trigger the patient own immune system, is the first monoclonal antibody to treat a hematological malignancy. (See pricing issue below).

…and Novartis’ combination therapy Tafinlar and Mekinist for the treatment of patients with BRAF V600E/K mutation positive unresectable or metastatic melanoma. The combination drug had been approved in Europe three month ago. Novartis states the treatment is "the first targeted therapy combination demonstrating more than two years overall survival in patients with the most aggressive form of skin cancer."

European Commission approves Amgen’s, or carfilzomib, in combination with lenalidomide and dexamethasone for the treatment of adult patients with multiple myeloma who have received at least one prior therapy. The approval makes Kyprolis the first irreversible proteasome inhibitor approved in the European Union for the treatment of multiple myeloma. (See pricing issue below).

Drugs at clinical stage

US FDA grants breakthrough status to Pfizer and Merck KGaA’s avelumab for the treatment of metastatic Merkel cell carcinoma, a rare and aggressive form of skin cancer. Avelumab (MSB0010718C), a fully human anti-PD-L1 IgG1 monoclonal antibody, would be the first specific treatment for this disease which is currently treated with surgery, chemotherapy or radiotherapy. (See more in previous newsletters #39 and 41)

… and priority review to Bristol-Myers Squibb’s immunotherapy drug Opdivo (nivolumab) for the treatment of advanced renal cell carcinoma (RCC). The drug already carries breakthrough therapy designation for RCC. B-MS is seeking to rapidly expand the scope of Opdivo adding to its already approved melanoma and lung cancer indications

The design of the pivotal Phase 3 clinical trial assessing Genfit’s (Lille, France) Elafibranor which had received US FDA fast-track designation for the treatment of non-alcoholic steatohepatitis (NASH) has been finalized. The primary endpoint is the resolution of NASH without worsening of fibrosis). Genfit is also considering its way toward an IPO on US Nasdaq to fund the above described study estimated at $150 million.

Protalix BioTherapeutics (Carmiel, Israel) commences two Phase 3 clinical trials with is lead product candidate PRX-102 for the treatment of Fabry’s disease, an inherited disorder characterized by the building up of a type of fat in the body’s cells. PRX-102 is a chemically modified version of a recombinant therapeutic enzyme called alpha-galactosidase-A protein.   

Science and Technology

UK Researchers from Ulster University, Northern Ireland University and Oxford have developed a pioneering treatment for pancreatic cancer which has shown a five-fold reduction in tumour size in initial tests. The treatment comprises tiny oxygen filled microbubbles which have an active drug attached to the surface which burst once inside the tumour when activated by ultrasound waves. When imploding the tiny bubbles deliver the drug, in a highly-targeted approach designed to minimise impact on surrounding healthy tissues. “We have also shown that our treatment can be combined with existing pancreatic cancer treatments leading to an even greater therapeutic effect,” said Ulster University’s Norbrook Chair of Pharmaceutical Science, John Callan. “This really is a groundbreaking development and one of the most promising advances in pancreatic cancer research for decades”. (See a similar approach described in newsletter #44).

Cost, Pricing and Market Access

National Institute for Health and Care Excellence (NICE):

….has turned down Amgen’s Repatha (evolocumab) for reimbursement as a new option to treat patients with elevated cholesterol and mixed dyslipidemia. The UK cost watch dog said there have been no clinical trials to measure its direct effect on cardiovascular events, and that the question of whether reducing LDL cholesterol with Repatha would reduce angina, heart attacks and strokes “remains unanswered”.

… has published an interim guidance barring patients with advanced bowel cancer from routine access in England and Wales to Merck Serono’s Erbitux and Amgen’s Vectibix, the only two personalized options still available for the disease. The cost regulator has ruled that neither drug would be a cost-effective use of resources as first-line treatment alongside chemotherapy for KRAS wild-type metastatic colorectal cancer, in what UK charity Beating Bowel Cancer has called a “devastating decision”. While recognising their clinical effectiveness, the NICE Expert Review group concluded that “even if they were provided for free they would still not be cost-effective, as the methodology used takes into account all the associated treatment costs, including the partner chemo regimens, diagnosis and hospital expenses”.  Both Erbitux and Vectibix had previously been rejected by NICE as second-line therapies for advanced bowel cancer in 2012.

…. but supports Bayer’s Xifigo, or radium-223 dichloride, as a post-chemotherapy treatment for hormone-relapsed prostate cancer patients with bone metastases with no visceral metastases. Xofigo is the first alpha-particle emitting radioactive therapeutic agent recommended for use for the treatment of men with metastatic hormone relapsed prostate cancer within the England and Wales National Health Service.

AstraZeneca’s Tagrisso, just approved last week by US FDA, for the treatment of patients with T790M+ EGRF mutation positive non-small cell lung cancer (NSCLC), will be priced at $12,750 for a month’s supply in the US. According to AstraZeneca this price is comparable to Novartis’ certinib and Pfizer’s critonizib.

Johnson & Johnson’s multiple myeloma treatment Darzalex (daratujmamab), approved earlier this week, will enter fierce competition in the battle for market share with Celgene’s Pomalyst, approved since 2013 and with Amgen’s Kyprolis, approved since July 2015 in the US and this week in Europe (see above). Darzalex will run at $5,850 per infusion, with 23 requested doses in the first full year the drug would cost an average of $135,550, to be compared to Pomalyst at $147,302 and Kyprolis at $114,000 for a year of treatment.

According to a CBC News, Mallinckrodt has increased the price of Synacthen Depot, a drug that treats a dangerous form of infant epilepsy, from $33.05 per vial to $680 per vial earlier this year, a price hike of 2,000%. Mallinckrodt says Synacthen has been underpriced in Canada, and that a manufacturing change prompted the huge price increase.

An analysis by GBI Research predicts the worldwide market for:

• Non-small cell cancer lung treatment will grow from 6.9 billion in 2014 to 10.9 billion in 2021 mainly due to the introduction in the major markets of new immunotherapy drugs such as Opdivo and Keytruda and possible novel combination therapies.
• Prostate Cancer treatment will grow from $7.6 billion in 2014 to $13.6 billion in 2021 representing a Compound Annual Growth Rate (CAGR) of 9.5%. The report states that the rise, which will occur across the eight major markets will be driven primarily by growth in disease prevalence due to an aging global population.
• A report from IMS Institute for Healthcare Informatics entitled “Global Medicines Use in 2020” says that the total worldwide spending on prescription drugs could reach $1.4 trillion in 2020 up from $1.07 trillion in 2015. The report also says that this rise is explained by an increase in patient access to medicines across the world and high-priced drugs for chronic diseases resulting in a CAGR of 4-7% over the next five years. The report also predicts that around 255 new drugs will come to market over that time, about a third of which will be for the treatment of cancer. The cost of these new treatments will be partially offset by the launch of generic drugs including biosimilars which could reduce spending on branded medicines by $178 billion. "We are now getting much more value for every dollar we spend because we can get decades' worth of innovation, most of it incredibly cheaply because generics are widely available," commented Michael Kleinrock, research director for the IMS Institute.

Miscellaneous

US FDA has given Baxalta’s Singapore-based biologics manufacturing plant permission to produce hemophilia’s Advate. The site had previously been cleared by European’s Medicines Agency.

Catalent sees its soft-gel manufacturing site in Beinheim (France) being suspended by the Agence Nationale de Sécurité du Médicament et des Produits de Santé (ANSM).”The suspension relates to the occurrence of out-of-place softgel capsules in several product batches that were detected during quality control procedures and removed prior to distribution to patients”. According to a company saying “Catalent believes that the incidents could potentially be related to a deliberate malicious action by one or more individuals”.

The US Treasury Department is likely to announce new tax rules to discourage tax inversion deals such as the one currently being negotiated between Pfizer and Allergan.

Bioevents

• Biofit 2015 on December 1-2 in Strasbourg (France)

Early events in 2016

• BIOTech ShowCase 2016 on January 11-13 in San Francisco (USA)
• JP Morgan 33^rd Annual Healthcare Conference on January 12-16 in San Francisco (USA)
• BIO CEO Investor Conference on February 8-9 in New York City (USA)
• BIO Asia 2016 on March 15-16 in Tokyo (Japan)
• Global Healthcare Forum on March 16-17 in Singapore (Singapore)
• BIO Europe Spring on April 4-6 in Stockholm (Sweden)
• BIO Vision on April 13-14 in Lyon (France)
• BIO-IT World Conference & Expo’16 on April 5-7 in Boston (USA)
• Strategic Alliance Management Congress on May 16-18 in Philadelphia (USA)
• China BIO Partnering on May 18-19 in Suzhou (China)
• BIO International Convention on June 6-9 in San Francisco (USA)

IMPORTANT NOTICE

This document has been prepared by btobioinnovation and is provided to you for information purposes only.  The information contained in this document has been obtained from sources that btobioinnovation believes are reliable but btobioinnovation does not warrant that it is accurate or complete. The views presented in this document are those of btobioinnovation’s editor at the time of writing and are subject to change.  btobioinnovation has no obligation to update its opinions or the information in this document.

Author: Jean-Claude Muller, Special Advisor at I&IR, jcm@btobioinnovation.com

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