GSK bags Tesaro for $5B as it leaps back in­to com­mer­cial on­col­o­gy and beefs up can­cer drug pipeline

Glax­o­SmithK­line has struck a deal to buy Tesaro $TSRO in a $5.1 bil­lion deal that will vault the phar­ma gi­ant in­to the com­mer­cial on­col­o­gy mar­ket as it stakes out a big new role for it­self in the boom­ing can­cer field.

Long dis­cussed af­ter Tesaro man­age­ment put out the word on sev­er­al oc­ca­sions in the past year that it was look­ing to sell the com­pa­ny and its PARP in­hibitor Ze­ju­la, GSK is pay­ing $75 a share, trig­ger­ing an in­stant 60% spike in the stock this morn­ing as in­vestors caught up to the news to­day.

Wait­ing out the ear­ly buzz al­lowed GSK to pick this com­pa­ny up for a rel­a­tive bar­gain. Tesaro start­ed 2018 at $82 a share, but watched its share price slide 42% un­til to­day as an­a­lysts beat them up over their poor sales per­for­mance. In ear­ly 2017, the stock hit a high of $190. That helps ex­plain why Tesaro was nev­er able to suc­ceed at auc­tion­ing the com­pa­ny ear­li­er, when its share price was still in­flat­ed.

Ze­ju­la is one of sev­er­al PARPs to hit the mar­ket af­ter As­traZeneca pi­o­neered the field with the first ap­proval for Lyn­parza, though lit­tle Tesaro has strug­gled to play catch-up along­side Clo­vis and Pfiz­er, which won a re­cent ap­proval for its PARP, ob­tained in the Medi­va­tion buy­out.

It won’t be easy. As­traZeneca and its new part­ners at Mer­ck have poured re­sources in­to the Lyn­parza fran­chise, win­ning block­buster re­turns as they widen their lead over the pack. And the ac­qui­si­tion wasn’t ex­act­ly cheered by GSK in­vestors, who drove the stock down a painful 8% af­ter the news hit.

The ac­qui­si­tion, though, gives Hal Bar­ron’s resur­gent can­cer re­search group un­der Ax­el Hoos a new drug to work with, as GSK pur­sues new in­di­ca­tions in a range of clin­i­cal tri­als aimed at ex­pand­ing its mar­ket pres­ence in on­col­o­gy.

GSK is just now jump­ing back in­to the com­mer­cial can­cer field af­ter strik­ing a deal with No­var­tis to flip its late-stage and mar­ket­ed on­col­o­gy prod­ucts for a port­fo­lio of vac­cines.

The move comes about a year af­ter Bar­ron — who had a leg­endary run at Genen­tech — took the top R&D job at GSK. As he told me ear­li­er this year, his new team — in­clud­ing new BD chief Kevin Sin — was hard at it scour­ing the globe for deals that made sense for the com­pa­ny.

At this point, a weary Tesaro and Ze­ju­la looked un­der­val­ued. And that made it a prime tar­get for the phar­ma com­pa­ny. GSK has been a ma­jor play­er in HIV and vac­cines, but its phar­ma R&D ops are the weak­est in its heavy­weight class.

This new deal brings a pipeline that al­so adds a PD-1 — one in a tidal wave of check­points — as well as TIM-3 and LAG-3 as­sets, which are al­so not so un­com­mon. In the mean­time, Bar­ron made it clear in a call with re­porters this morn­ing that he was ea­ger to see about the po­ten­tial to ex­pand Ze­ju­la in­to the broad­er HRD-pos­i­tive com­mu­ni­ty, which would dra­mat­i­cal­ly in­crease the size of the mar­ket.

PARPs work by in­ter­fer­ing with DNA re­pair mech­a­nisms that al­low can­cer cells to sur­vive, open­ing up an av­enue that could re­late to a va­ri­ety of can­cers.

So what hap­pens to the 800 or so staffers at Tesaro? 

Em­ma Walm­s­ley

In a call with re­porters Mon­day morn­ing, CEO Em­ma Walm­s­ley not­ed that the deal wasn’t be­ing dri­ven by cost syn­er­gies and al­so brings com­mer­cial ca­pa­bil­i­ties back to a com­pa­ny that cur­rent­ly doesn’t have an on­col­o­gy sales force. In time, she added, they’ll look at syn­er­gies — code for cuts — but it’s ear­ly days on that.

Walm­s­ley al­so de­clined to say just what kind of peak sales they can ex­pect from Ze­ju­la. In the past, though, peak sales es­ti­mates have climbed to $2 bil­lion.

“Our strong be­lief is that PARP in­hibitors are im­por­tant med­i­cines that have been un­der ap­pre­ci­at­ed in terms of the im­pact they can have on can­cer pa­tients,” Bar­ron not­ed in a state­ment. “We are op­ti­mistic that Ze­ju­la will demon­strate ben­e­fit in pa­tients with ovar­i­an can­cer be­yond those who are BR­CA-pos­i­tive as front-line treat­ment. We are al­so very ex­cit­ed that through this trans­ac­tion, we will have the op­por­tu­ni­ty to work with an out­stand­ing Boston-based on­col­o­gy group with deep clin­i­cal de­vel­op­ment ex­per­tise and to­geth­er we will ex­plore Ze­ju­la’s ef­fi­ca­cy be­yond ovar­i­an can­cer in­to mul­ti­ple tu­mour types to help many more pa­tients.”


Im­age: Ax­el Hoos, Hal Bar­ron, John Lep­ore, Kevin Sin and Tony Wood.

Eli Casdin, Casdin Capital

Eli Cas­din backs Codex­is' plat­form tech with $50M eq­ui­ty buy

About a month af­ter Codex­is notched a deal with No­var­tis $NVS, the Cal­i­for­nia com­pa­ny $CDXS on Thurs­day said long-time in­vestor Cas­din Cap­i­tal is putting up $50 mil­lion in a pri­vate place­ment, which puts the New York-based in­vest­ment firm in con­trol of more than 5% of the pro­tein en­gi­neer­ing play­er’s stock.

Eli Cas­din start­ed his epony­mous in­vest­ment firm in 2012 and dates his re­la­tion­ship with Codex­is back to at least a decade. About three years ago, Cas­din Cap­i­tal be­gan in­vest­ing in the in­dus­tri­al biotech com­pa­ny, af­ter it piv­ot­ed its fo­cus to the life sci­ences — un­der the aus­pices of new chief John Nicols — away from the en­er­gy in­dus­try.

How small- to mid-sized biotechs can adopt pa­tient cen­tric­i­ty in their on­col­o­gy tri­als

By Lucy Clos­sick Thom­son, Se­nior Di­rec­tor of On­col­o­gy Pro­ject Man­age­ment, Icon

Clin­i­cal tri­als in on­col­o­gy can be cost­ly and chal­leng­ing to man­age. One fac­tor that could re­duce costs and re­duce bar­ri­ers is har­ness­ing the pa­tient voice in tri­al de­sign to help ac­cel­er­ate pa­tient en­roll­ment. Now is the time to adopt pa­tient-cen­tric strate­gies that not on­ly fo­cus on pa­tient needs, but al­so can main­tain cost ef­fi­cien­cy.

In­vestors pony up $476M for the lat­est round of biotech IPOs to hit the Street

Three biotechs — and a genome se­quenc­ing play­er — have caught the lat­est tide to the Gold Coast of IPOs, round­ing out the first half of 2019 with 23 new drug de­vel­op­ers mak­ing it on Nas­daq.

Most of these com­pa­nies filed their IPOs al­most si­mul­ta­ne­ous­ly, though we’re still wait­ing on word of fel­low class­mate Bridge­Bio’s pric­ing af­ter CEO Neil Ku­mar set the terms at $14 to $16 a share on Mon­day in search of a $240 mil­lion (or so) wind­fall. If he’s suc­cess­ful, that would take the one-week haul past the $700 mil­lion mark, a fresh sign that in­vestors’ en­thu­si­asm for new­ly coined pub­lic biotechs hasn’t cooled.

Brent Saunders at an Endpoints News event in 2017 — File photo

An­a­lyst call with Al­ler­gan ex­ecs stokes an­tic­i­pa­tion of a plan to split the com­pa­ny in ‘a month or two’

So what’s up at Al­ler­gan?

Ear­li­er this week the ubiq­ui­tous Ever­core ISI an­a­lyst Umer Raf­fat was on the line with com­pa­ny ex­ec­u­tives to probe in­to the lat­est on the num­bers as well as CEO Brent Saun­ders’ re­cent de­c­la­ra­tion that he’d be do­ing some­thing de­fin­i­tive to help long-suf­fer­ing in­vestors who have watched their shares dwin­dle in val­ue.

He came away with the im­pres­sion that a sig­nif­i­cant com­pa­ny split is on the way. And not on some dis­tant time hori­zon.

Robert Forrester, Verastem

Ve­rastem CEO For­rester steps to the ex­it as the board hunts com­mer­cial-savvy ex­ec for the be­lea­guered biotech

Robert For­rester is step­ping down as CEO of Ve­rastem On­col­o­gy $VSTM just 8 months af­ter the com­pa­ny nabbed an ap­proval for du­velis­ib, a PI3K drug with a sto­ried past — and what ap­pears as not much of a fu­ture.

The biotech put out word this morn­ing that For­rester will take an ad­vi­so­ry role with Ve­rastem while COO Dan Pa­ter­son steps up to take charge of the lead­er­ship team and the board looks around for a new CEO.

John Chiminski, Catalent CEO - File Photo

'It's a growth play': Catal­ent ac­quires Bris­tol-My­er­s' Eu­ro­pean launch pad, ex­pand­ing glob­al CD­MO ops

Catalent is staying on the growth track.

Just two months after committing $1.2 billion to pick up Paragon and take a deep dive into the sizzling hot gene therapy manufacturing sector, the CDMO is bouncing right back with a deal to buy out Bristol-Myers’ central launchpad for new therapies in Europe, acquiring a complex in Anagni, Italy, southwest of Rome, that will significantly expand its capacity on the continent.

There are no terms being offered, but this is no small deal. The Anagni campus employs some 700 staffers, and Catalent is planning to go right in — once the deal closes late this year — with a blueprint to build up the operations further as they expand on oral solid, biologics, and sterile product manufacturing and packaging.

This is an uncommon deal, Catalent CEO John Chiminski tells me. But it offers a shortcut for rapid growth that cuts years out of developing a green fields project. That’s time Catalent doesn’t have as the industry undergoes unprecedented expansion around the world.

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John Reed at JPM 2019. Jeff Rumans for Endpoints News

Sanofi's John Reed con­tin­ues to re­or­ga­nize R&D, cut­ting 466 jobs while boost­ing can­cer, gene ther­a­py re­search

The R&D reorganization inside Sanofi is continuing, more than a year after the pharma giant brought in John Reed to head the research arm of the Paris-based company.
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The top 10 block­buster drugs in the late-stage pipeline — Eval­u­ate adds 6 new ther­a­pies to heavy-hit­ter list

Vertex comes in for a substantial amount of criticism for its no-holds-barred tactical approach toward wresting the price it wants for its commercial drugs in Europe. But the flip side of that coin is a highly admired R&D and commercial operation that regularly wins kudos from analysts for their ability to engineer greater cash flow from the breakthrough drugs they create.

Both aspects needed for success in this business are on display in the program backing Vertex’s triple for cystic fibrosis. VX-659/VX-445 + Tezacaftor + Ivacaftor — it’s been whittled down to 445 now — was singled out by Evaluate Pharma as the late-stage therapy most likely to win the crown for drug sales in 5 years, with a projected peak revenue forecast of $4.3 billion.

The latest annual list, which you can see here in their latest world preview, includes a roster of some of the most closely watched development programs in biopharma. And Evaluate has added 6 must-watch experimental drugs to the top 10 as drugs fail or go on to a first approval. With apologies to the list maker, I revamped this to rank the top 10 by projected 2024 sales, instead of Evaluate's net present value rankings.

It's how we roll at Endpoints News.

Here is a quick summary of the rest of the top 10:

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Ken Frazier 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

Who’s next in line to suc­ceed Ken Fra­zier as CEO of the Keytru­da-blessed Mer­ck?

When Merck waved off a looming forced retirement for Ken Frazier last September, the board cited flexibility in CEO transition as a key factor in the decision. Having Frazier — who’s also chairman of the company — around beyond his 65th birthday in 2019 would ensure they install the best person at the best time, they said.

The board has evidently begun that process with a clear preference for internal candidates, sources told Bloomberg. CFO Robert Davis, chief marketing officer Michael Nally, and chief commercial officer Frank Clyburn are all in the running, according to an insider.

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