Dova Pharma's bet on Eisai castoff spells gold as Sobi spends millions to acquire it
In 2016, Dova Pharmaceuticals paid Japan’s Eisai a paltry $5 million upfront for the rights to the Phase III-ready avatrombopag. The following year, the Durham, North Carolina-based company made its public debut with a $75 million IPO, and by 2018 the drug — branded as Doptelet — secured FDA approval. Dova’s bet paid off handsomely — on Monday, the company unveiled Swedish Orphan Biovitrum AB was acquiring its shares in a deal worth up to a robust $915 million.
At the center of the buyout is the drug, Doptelet, which was cleared last year as a treatment for certain patients chronic liver disease patients suffering from low blood platelet counts. Months ago, that approval was expanded to include patients with chronic immune thrombocytopenia (ITP), who have not benefited from initial treatment.
The therapy is an oral thrombopoietin (TPO) receptor agonist — thrombopoietin is a hormone produced by the liver and kidney that regulates platelet production.
The only other oral TPO approved for ITP is Novartis’ $NVS Promacta, which is annualizing at $600 million-plus, mainly in ITP patients. There is also an injectable TPO — Amgen’s Nplate —which brings in roughly $450 million in US sales, noted Evercore ISI’s Umer Raffat earlier this year.
Unlike Promacta, Doptelet does not carry a black box warning for hepatoxicity, nor does is it required to be taken one hour before, or two hours post a meal — and both products are priced at parity at the most recommended dose, he said.
“Novartis remains the incumbent and a huge player. We’re not suggesting by any means that Dova’s Doptelet takes over the TPO class. However, it’s not unrealistic to expect a path towards ~$200M ITP peak … especially also given how ITP pts cycle off NVS Promacta.”
Doptelet — which is sold at $9,000 (40 mg) and $13,500 (60 mg) wholesale price — generated $3.5 million in second-quarter sales. Dova is on the hook, however, to pay Eisai $135 million in net sales-based milestone payments.
Sobi has agreed to pay $27.50 per Dova share, which represents a premium of 36% to Dova’s Friday closing. The transaction — which also includes an additional $1.50 per share in cash, once Doptelet is sanctioned for use in chemotherapy-induced thrombocytopenia (CIT) — is expected to close in the fourth quarter of 2019.
Dova’s shares $DOVA jumped 27.4% to $27.75 in Monday premarket trading.
Top-line data from a late-stage trial in CIT is expected in the first half of next year.
“Currently, there are no approved pharmacological options to treat CIT, and only a fraction of patients, referred to high risk of bleeding, may undergo a platelet transfusion or SoC procedure in the hospital,” HC Wainwright’s Joseph Pantginis wrote in a note on Monday.
“However, SoC comes with several shortcomings, which include: (1) patients need to be hospitalized; (2) difficulties in finding the correct units; and (3) the occurrence of lung and systemic inflammatory episodes, fever, hypotension, and diffuse intravascular coagulation.”
There are roughly 765,000 patients annually who receive chemotherapy, of which 10% may develop severe CIT — under the current pricing approach, management estimates a $2 billion market in the United States alone, he added. “We think these figures could be conservative. Our estimates and due diligence found that 21.8% of patients under chemo developed severe CIT and 15% had received SoC (standard of care).”
Jefferies analysts, in a note last month, forecast US peak sales in the indication (if approved) to hit $600 million.