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.

Gilead CEO Dan O'­Day of­fers a de­tailed ex­pla­na­tion on remde­sivir ac­cess — re­as­sur­ing an­a­lysts that Covid-19 da­ta are com­ing fast

After coming under heavy fire from consumer groups ready to pummel them for grabbing the FDA’s orphan status for remdesivir — reserved to encourage the development of rare disease therapies — Gilead CEO Daniel O’Day had some explaining to do about the company’s approach to providing access to this drug to patients suffering from Covid-19. And he set aside time over the weekend to patiently explain how they are making their potential pandemic drug available in a new program — one he feels can better be used to address a growing pack of infected patients desperately seeking remdesivir under compassionate use provisions.

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Ven­ture Cap­i­tal as a Strate­gic Part­ner: Fu­el­ing In­no­va­tion be­yond Fi­nance

The average level of investment required for a biotech start-up to succeed is increasing every year, elevating the pressure even further on venture capital to make smart financial investments. Financial investment alone, however, does not always guarantee that exciting innovations can be transformed into real businesses that make a meaningful difference to patients.

Beyond just capital

At Astellas Venture Management (AVM) – a wholly-owned venture capital organization within Astellas, headquartered in the San Francisco Bay Area – capital is just one of the ingredients we offer to add value to our biotechnology investments and partnerships. We generally take a strategic investor approach for companies in our invested portfolio, providing access to expertise, technology and/or resources in addition to the injection of finance. An equity investment from AVM can include access to Astellas’ research and development (R&D) capabilities and expertise, and a global network of partner academic institutions and biotechnology companies, to help advance and accelerate the start-up’s innovation.

Covid-19 roundup: In­ter­cept, blue­bird and a grow­ing list of biotechs feel the pain as pan­dem­ic man­gles FDA, R&D sched­ules

Around 100 staffers at Boston area hospitals have now tested positive for Covid-19, spotlighting the growing risk that the pandemic will sideline many of the most essential workers in healthcare as caseloads peak in the US and around the globe. With more than 3,400 deaths, Spain has become the latest country to surpass the official death count attributed to the new coronavirus in China, where the outbreak originated. As of Thursday morning, confirmed global cases had crossed 470,000 and the death count eclipsed 21,000.

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Af­ter crit­ics lam­bast­ed Gilead for grab­bing the FDA's spe­cial rare drug sta­tus on remde­sivir, they're giv­ing it back

Two days after Gilead won orphan drug status for remdesivir as a potential treatment for Covid-19, they’re handing it back.

The company was slammed from several sides after Gilead reported that the FDA had come through with the special status, which comes with 7 years of market exclusivity, the waiver of FDA fees and some tax credits as well. Typically, everyone who can get orphan status lands it without much of a fuss, but Democratic presidential candidate Bernie Sanders, Public Citizen and other consumer groups were outraged.

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Mod­er­na CEO Stéphane Ban­cel out­lines a short path for emer­gency use of a coro­n­avirus vac­cine

NIAID director Anthony Fauci has left no doubts that it takes 12 to 18 months to get a new vaccine tested and in commercial use, in the best of circumstances. But in times of a global emergency — like these — maybe there’s another, faster route to follow.

In an SEC filing on Tuesday, Moderna $MRNA staked out a record-setting pathway to getting their mRNA vaccine into the frontline of the healthcare response as early as this fall. The SEC filing notes that CEO Stéphane Bancel told Goldman Sachs that an emergency use approval could allow the vaccine to go to healthcare workers and certain individuals in a matter of months — presumably provided the NIH sees the safety and efficacy data they would need from the Phase I.

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Caught in a Covid-19 mael­strom, Eli Lil­ly locks down clin­i­cal tri­als as multi­bil­lion-dol­lar R&D ops de­rail

The Covid-19 pandemic has derailed Eli Lilly’s $6 billion R&D operations.

The pharma giant reported Monday morning that it has decided to hit the brakes on most new study starts and pause enrollment for most ongoing studies. Lilly adds that it is continuing dosing for ongoing studies, “but with study-by-study consideration.”

The pandemic has severely disrupted healthcare systems around the globe, says Lilly, making it difficult or impossible to conduct studies at many research sites. And there’s no timeline for when it expects to get back on track.

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UP­DAT­ED: Ver­tex joins Mer­ck, Pfiz­er — re­vamp­ing multi­bil­lion-dol­lar tri­al strat­e­gy as biotech R&D crum­bles

You can add Pfizer, Merck and — as we found out Friday morning — Vertex to the growing list of pharma giants hitting the pause button on a range of clinical trials. But not everyone in R&D is getting a red light.

Vertex says that it’s doing its best to keep working its pipeline strategy, coming up with a plan “to enable virtual clinic visits and home delivery of study drug to ensure study continuity and medical monitoring, and to facilitate study procedures.”

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Covid-19 roundup: Bris­tol My­ers sus­pends clin­i­cal tri­als, grounds field team; Vir ush­ers an­ti­body can­di­dates to hu­man test­ing

The global nature of the Covid-19 pandemic is manifesting more profoundly every day. With Spain’s death toll now surpassing China’s and India on full lockdown, the number of confirmed cases around the world has exceeded 436,000 while recoveries edged close to 112,000.

While the outbreak derails R&D at another pharma giant, several drugmakers have some encouraging updates on both experimental and repurposed molecules. Philanthropic campaigns in anticipation of the economic fallout continue. An Australian biotech is taking extreme measures to hunker down. There’s also an alternative epidemiology model emerging out of the UK, stirring up more discussion regarding the true extent of the infections in the country.

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As share buy­backs come un­der scruti­ny, what's in store for the bio­phar­ma in­dus­try?

Stock buybacks are not to be permitted for companies that will be bailed out in the coronavirus stimulus package, Congressional leaders have signaled. To what degree the biopharma industry has relied on buybacks for earnings growth in recent years, and if the trend continues, are the big questions as scrutiny into the practice heightens and balance sheets weaken with the coronavirus pandemic wreaking havoc on global economies.

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