#AACR17: Fresh from Mer­ck em­brace, fast-grow­ing In­cyte piv­ots in­to a PhI­II IDO1/Op­di­vo tie-up with Bris­tol-My­ers

PHO­TO: © AACR/Todd Buchanan 2017


Wash­ing­ton, DC — Two days af­ter In­cyte out­lined how it tied the knot with Mer­ck on a slate of six late-stage stud­ies com­bin­ing its check­point Keytru­da with the biotech’s IDO1 drug epaca­do­stat, ze­ro­ing in on front­line use, In­cyte has piv­ot­ed in­to a part­ner­ship on three stud­ies with Bris­tol-My­ers Squibb’s ri­val check­point Op­di­vo.

Like Mer­ck, Bris­tol-My­ers is look­ing for piv­otal da­ta on a front­line com­bo to tack­le non-small cell lung can­cer. And they’re adding a Phase III study that tack­les head and neck can­cer while ex­pand­ing an on­go­ing Phase I/II to in­clude an­ti-PD-1/PD-L1 re­lapsed/re­frac­to­ry co­horts of melanoma pa­tients.

Like its pact with Mer­ck, In­cyte $IN­CY is shar­ing the cost of the piv­otal work with Bris­tol-My­ers, look­ing to pen­e­trate a slate of can­cer mar­kets with lead­ers in the field. And as Mer­ck is tak­ing the lead on do­ing the re­search work on their pact, Bris­tol-My­ers is do­ing the same, In­cyte CEO Hervé Hop­penot tells me.

In­vestors loved the move in­to late-stage test­ing across a broad front, send­ing shares up 5% by late af­ter­noon on Mon­day.

Iron­i­cal­ly, In­cyte emerges from these back-to-back deals con­tin­u­ing to be close­ly al­lied with the two top play­ers in check­point in­hi­bi­tion. Mer­ck re­cent­ly seized the in­side track on non-small cell lung can­cer, leapfrog­ging a flail­ing Bris­tol-My­ers which was ham­mered — and not for the first time — as it re­cent­ly re­vealed that its com­bi­na­tion of Op­di­vo and the CT­LA-4 drug Yer­voy would not be head­ed to an ac­cel­er­at­ed re­view. And In­cyte is al­so al­ready en­gaged in pacts with As­traZeneca and Genen­tech on their check­points as well.

Hervé Hop­penot, In­cyte CEO

How about Baven­cio (avelum­ab), the new­ly ap­proved check­point from Mer­ck KGaA and Pfiz­er? I ask Hop­penot.

“We’re open to it,” he re­sponds with a ready smile.

In­cyte not on­ly has part­ner­ships with a line­up of key play­ers, it has its own check­point in de­vel­op­ment as well. (Just as Bris­tol-My­ers has its own IDO1 in ear­ly de­vel­op­ment.) The biotech is op­er­at­ing on the no­tion that epaca­do­stat has the po­ten­tial to be tied to a va­ri­ety of check­points for a list of dif­fer­ent can­cer types.

“I don’t think any­one knows how things will end up,” says Hop­penot, who views these de­vel­op­ment pacts as short term com­mit­ments. If the tri­als pan out as hoped, he says that the lead­ing IDO1 drug could be pre­scribed in com­bi­na­tions, a lu­cra­tive rev­enue source for the com­pa­ny. The deals do not in­clude com­mer­cial part­ner­ships.

In­cyte an­nounced the lat­est deal with Bris­tol-My­ers ear­ly Sun­day, as AACR was get­ting start­ed in Wash­ing­ton DC.

One of the rea­sons why IDO1 and check­points are so at­trac­tive, Hop­penot says, is that a tar­get­ed ther­a­py like an IDO1 — fo­cused on the tu­mor mi­croen­vi­ron­ment — could have a bet­ter shot at suc­cess with a check­point than, say, a PD-1 check­point and CT­LA-4 (like Yer­voy) where you’re adding a sys­temic drug that could trig­ger safe­ty is­sues for pa­tients.

The first one of these piv­otal com­bo stud­ies will be the Keytru­da/epaca­do­stat com­bo study that reads out in 2018, just around the cor­ner in R&D terms.

Leerink’s Sea­mus Fer­nan­dez en­thu­si­as­ti­cal­ly signed off on the lat­est Bris­tol-My­ers pact Mon­day morn­ing. He not­ed:

In our view, BMY’s de­ci­sion to fol­low MRK dra­mat­i­cal­ly re­duces the risk that Op­di­vo will be at risk even if the com­bi­na­tion with IDO is ul­ti­mate­ly deemed clin­i­cal­ly su­pe­ri­or to the com­bi­na­tion of CT­LA4 + PD1/PDL1. Fur­ther­more, as bio­mark­ers evolve and new treat­ment ap­proach­es evolve and emerge, it is like­ly that the PD1/PDL1 agents with the broad­est la­bels are most like­ly to ben­e­fit from this seg­men­ta­tion of the mar­ket. This “all com­ers” ap­proach to com­bi­na­tions high­lights what like­ly will con­tin­ue to be an ex­tra­or­di­nary cost of IO de­vel­op­ment and the race for lead­er­ship.

This is a crit­i­cal time for In­cyte, which is one of the biotechs most fre­quent­ly men­tioned as a like­ly takeover tar­get by over-caf­feinat­ed an­a­lysts ea­ger to pre­dict the next M&A deal. The staff of the Wilm­ing­ton, DE-based com­pa­ny has bro­ken past the 1,000 mark, with 850 in the US and the rest in Eu­rope — where In­cyte picked up the Ari­ad op­er­a­tions last May – well ahead of the Take­da buy­out in the US – for $140 mil­lion up front.

More than half of In­cyte’s staff is in R&D, with more than 200 sci­en­tists in the op­er­a­tion. And Hop­penot tells me he’s in­tent on build­ing a “flat” or­ga­ni­za­tion that is bro­ken in­to three dis­tinct re­gions: the US, Eu­rope and next in Japan.

“The ques­tion was how to be­come big with­out be­com­ing stu­pid,” says the CEO, a vet­er­an of the glob­al phar­ma gi­ant No­var­tis.

In­cyte now has 14 drugs in the clin­ic, a grow­ing top line with Jakafi sales, with rev­enue break­ing past the $1 bil­lion mark last year. These new and re­vamped pacts have helped dri­ve a big fo­cus on the pipeline.

Back in ear­ly 2015, In­cyte paid $60 mil­lion for an up­front and eq­ui­ty and promised up to $350 mil­lion in mile­stones to jump on board Agenus’s an­ti­body dis­cov­ery plat­form. That deal cov­ered a slate of check­point reg­u­la­tors that could be cru­cial to In­cyte’s fu­ture cov­er­ing GITR, OX40, LAG-3 and TIM-3. And a few weeks ago that 50/50 deal was re­jigged to leave In­cyte with the reins, with Agenus tak­ing cash and roy­al­ties in lieu of the split orig­i­nal­ly planned.

Late last year In­cyte em­braced Dutch biotech Merus and its bis­pe­cif­ic an­ti­body tech, agree­ing to buy in­to a new dis­cov­ery and de­vel­op­ment col­lab­o­ra­tion that start­ed with $200 mil­lion in an up­front and eq­ui­ty pay­ment and has the po­ten­tial to earn bil­lions more if it ma­tures in­to a co-com­mer­cial­iza­tion arrange­ment.

The key to mak­ing this all work, says Hop­penot, is to cre­ate sep­a­rate or­ga­ni­za­tions that can op­er­ate vir­tu­al­ly — though not en­tire­ly — in­de­pen­dent­ly, with­out a large hi­er­ar­chy over­see­ing every as­pect of de­vel­op­ment, slow­ing things down.

“We are a fast grow­ing com­pa­ny,” says Hop­penot. “That is not go­ing to change.”

And he isn’t about to guar­an­tee that every­thing now in the clin­ic will work.

“Some of it is go­ing to flop,” says the for­mer No­var­tis can­cer chief, who took the helm at In­cyte three-and-a-half years ago. It’s not tak­ing in­tel­li­gent, fo­cused risks that he finds a much big­ger threat. And so far, it’s all work­ing in his fa­vor.

Albert Bourla appears before the Senate Committee on Finance for a hearing on prescription drug pricing on Capitol Hill in Washington, DC, February 26, 2019. Chris Kleponis for CNP via AP Images

UP­DAT­ED: Pfiz­er CEO Al­bert Bourla is back in the M&A game, but why is he pay­ing $11.4B for Ar­ray?

Pfiz­er $PFE has cut short its time on the side­lines of bio­phar­ma M&A.

Mon­day morn­ing the phar­ma gi­ant un­veiled an $11.4 bil­lion deal to ac­quire Ar­ray Bio­Phar­ma, beef­ing up its on­col­o­gy work and adding a new re­search hub in Boul­der, Col­orado to its glob­al op­er­a­tions.

At $48 a share, Ar­ray $AR­RY in­vestors will be get­ting a 62% pre­mi­um off the Fri­day close of $29.59.

Pfiz­er, which has strug­gled to gain all the up­side promised in past buy­outs like Medi­va­tion, high­light­ed the ac­qui­si­tion of 2 ap­proved drugs in the deal — Braftovi (en­co­rafenib) and Mek­tovi (binime­tinib).

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In­vestors fret as VBI's hep B vac­cine fails key sec­ondary PhI­II study goal

Sobered by mount­ing costs, Dy­navax $DVAX last month made the de­ci­sion to fo­cus all its re­sources on its 2017-ap­proved he­pati­tis B vac­cine Hep­lisav-B, which ri­vals and su­per­sedes the ef­fi­ca­cy and con­ve­nience pro­file of GSK’s $GSK es­tab­lished En­ger­ix-B. The Cal­i­for­nia-based com­pa­ny will be on the look­out for an­oth­er com­peti­tor — VBI Vac­cines, which on Mon­day un­veiled late-stage da­ta on its hep B vac­cine: Sci-B-Vac.

Image: Shutterstock

Gene ther­a­py R&D deals turn red hot as Big Phar­ma steps up to play

This September will mark the 20th anniversary of the death of Jesse Gelsinger, a young man suffering from X-linked genetic disease of the liver. He was killed in a gene therapy study conducted by Penn’s James Wilson, and the entire field endured a lengthy deep freeze as the field grappled with the safety issues inherent in the work.

Some thought gene therapy R&D would never survive. But it did. And this year marked a landmark approval for Zolgensma, a new gene therapy for spinal muscular atrophy Novartis priced at $2.1 million.

“Gene therapy is the hottest item on the block now. But there was a time when we first got into this trial, where there wasn’t a person in the world who believed that gene therapy would work. We have to remember that,” noted gene therapy investigator Jerry Mendell told SMA News Today.

We’re still right on the pioneering frontier when it comes to getting approvals for gene therapies and launching marketing campaigns with the European green light for bluebird's leading program last Friday underscoring the nascent nature of the field. But gene therapy R&D is booming, and has been for several years now.

The rapid growth of gene therapy clinical development is well known, but we decided to put some numbers on it, to quantify what’s going on. DealForma chief Chris Dokomajilar took a lot over the past 10 years, as the number of deals, R&D partnerships and buyouts steadily gained steam, spiking last year and on track to maintain the surge in 2019.

The upfronts and totals for the dollars on deals so far in 2019 is already close to the 2018 mark, underscoring a new phase of negotiations as the major players step up to gain a piece of the late-stage and commercial action.

Once again, we’re looking at an “overnight” biotech success story, decades in the making.

At some point, that may start to brake the numbers we’re seeing. But for now, as rivals line up to compete for frontline prominence across a range of diseases, the arrows are all pointed north.

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A uni­corn stalks Wall Street in search of IPO cash; CASI Phar­ma in-li­cens­es CD19 ther­a­py from Chi­na’s Ju­ven­tas

→ A herd of up­start biotechs will look to Wall Street for some ma­jor wind­falls this week as a burst of new of­fer­ings con­tin­ues to feed cash in­to the R&D sys­tem. To­day we learned that Bridge­Bio will look to raise in the neigh­bor­hood of $225 mil­lion by of­fer­ing 15 mil­lion shares for $14 to $16 each. And they have a string of joint bookrun­ners: J.P. Mor­gan, Gold­man Sachs, Jef­feries, SVB Leerink, KKR, Piper Jaf­fray, Mizuho Se­cu­ri­ties, BMO Cap­i­tal Mar­kets and Ray­mond James. If suc­cess­ful, Bridge­Bio will emerge with a mar­ket cap of around $1.7 bil­lion. There are 5 biotechs look­ing to IPO this week, in­clud­ing Akero and Pre­vail.

UP­DAT­ED: Sanofi Gen­zyme deserts gene ther­a­py de­vel­op­er Voy­ager Ther­a­peu­tics

While gene ther­a­py com­pa­nies re­joice as the sec­tor gains trac­tion with ap­provals and a flur­ry of M&A ac­tiv­i­ty, one play­er is feel­ing the heat.

Back in 2015, Voy­ager Ther­a­peu­tics joined forces with Sanofi Gen­zyme in a deal worth up to $845 mil­lion ($100 mil­lion up­front + a po­ten­tial $745 mil­lion in mile­stones) to co-de­vel­op gene ther­a­pies for se­vere cen­tral ner­vous sys­tem dis­or­ders. But two years lat­er, the French drug­mak­er re­treat­ed, elect­ing to not pick up the op­tion to work on Voy­ager’s Parkin­son’s dis­ease pro­gram. (Last year, the FDA dis­ap­point­ed Voy­ager, telling the com­pa­ny that it was not open to an ac­cel­er­at­ed fil­ing on the Parkin­son’s drug on the ba­sis of Phase II da­ta — in­stead of re­quir­ing an ad­di­tion­al piv­otal study.)

John Oyler, Founder & CEO of BeiGene, at the US-China Biopharma Innovation and Investment Summit in Shanghai on October 23, 2018; Credit: Endpoints News, PharmCube

UP­DAT­ED: As Bris­tol-My­ers/Cel­gene tie up loose ends, BeiGene pock­ets $150M from PD-1 breakup

As soon as Bristol-Myers Squibb announced its $74 billion buyout for Celgene, BeiGene emerged as a prominent example of a player whose pact with the big biotech could sour, as its PD-1 candidate seems to overlap with Opdivo. After six months of suspense, the partners say they are finally bringing the 2-year-old deal to an amicable end.

BeiGene $BGNE gets $150 million for the termination in addition to full global rights to tislelizumab. In 2017 Celgene had paid $263 million in upfront license fees to develop the PD-1 inhibitor for solid cancers in the US, Europe, Japan and the rest of the world outside Asia. It also threw in a $150 million equity investment in exchange for BeiGene handling its commercial operations — think Abraxane, Revlimid and Vidaza — in China.

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Exterior of the 1 million square foot Discovery Labs in Upper Merion, PA (PR Newswire)

Philadel­phia cham­pi­ons life sci­ences 'co-work­ing,' re­viv­ing for­mer GSK cam­pus in $500M makeover

In a boost to Philadel­phia’s thriv­ing life sci­ences scene, a for­mer Glax­o­SmithK­line cam­pus and a near­by site has been turned in­to what its de­vel­op­er calls “the largest cowork­ing ecosys­tem” for health­care com­pa­nies in the coun­try.

The Dis­cov­ery Labs, a com­pa­ny spawned by MLP Ven­tures, has se­lect­ed two lo­ca­tions in the King of Prus­sia area as the $500 mil­lion test case for its strat­e­gy of ac­quir­ing and con­vert­ing old phar­ma­ceu­ti­cal R&D fa­cil­i­ties world­wide. The sites add up to 1.64 mil­lion square feet.

Ted Love. HAVERFORD COLLEGE

Glob­al Blood Ther­a­peu­tics poised to sub­mit ap­pli­ca­tion for ac­cel­er­at­ed ap­proval, with new piv­otal da­ta on its sick­le cell dis­ease drug

Global Blood Therapeutics is set to submit an application for accelerated approval in the second-half of this year, after unveiling fresh data from a late-stage trial that showed just over half the patients given the highest dose of its experimental sickle cell disease drug experienced a statistically significant improvement in oxygen-wielding hemoglobin, meeting the study's main goal.

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Nick Leschly via Getty

UP­DAT­ED: Blue­bird shares sink as an­a­lysts puz­zle out $1.8M stick­er shock and an un­ex­pect­ed de­lay

Blue­bird bio $BLUE has un­veiled its price for the new­ly ap­proved gene ther­a­py Zyn­te­glo (Lenti­Glo­bin), which came as a big sur­prise. And it wasn’t the on­ly un­ex­pect­ed twist in to­day’s sto­ry.

With some an­a­lysts bet­ting on a $900,000 price for the β-tha­lassemia treat­ment in Eu­rope, where reg­u­la­tors pro­vid­ed a con­di­tion­al ear­ly OK, blue­bird CEO Nick Leschly said Fri­day morn­ing that the pa­tients who are suc­cess­ful­ly treat­ed with their drug over 5 years will be charged twice that — $1.8 mil­lion — on the con­ti­nent. That makes this drug the sec­ond most ex­pen­sive ther­a­py on the plan­et, just be­hind No­var­tis’ new­ly ap­proved Zol­gens­ma at $2.1 mil­lion, with an­a­lysts still wait­ing to see what kind of pre­mi­um can be had in the US.