The I/O 2.0-com­bo tech race is on: Mer­ck bags on­colyt­ics play­er Vi­r­a­lyt­ics in $394M buy­out

Last spring the small Aus­tralian biotech Vi­r­a­lyt­ics made a big splash at the an­nu­al AACR meet­ing, turn­ing up in the show­case spot with an in­trigu­ing snap­shot of the pos­i­tive da­ta their on­colyt­ics ther­a­py Ca­vatak was reg­is­ter­ing in the clin­ic.

This morn­ing Mer­ck $MRK — al­ready loose­ly al­lied in a sup­ply deal with Vi­r­a­lyt­ics for their PD-1 star Keytru­da — fol­lowed up by gob­bling the whole com­pa­ny, bag­ging the biotech in a $394 mil­lion buy­out as the lead­ers in the check­point race branch out with new deals for com­bi­na­tion ap­proach­es.

Roy Baynes

Mer­ck is pay­ing a big pre­mi­um — 160% — for Vi­r­a­lyt­ics (ASX: VLA, OTC: VRA­CY), but their AUD 1.75 cash price per share rep­re­sents a mod­est cost in a block­buster busi­ness like the PD-1/L1 field which Mer­ck and Bris­tol-My­ers Squibb dom­i­nate.

It’s al­so no co­in­ci­dence that Mer­ck’s deal is com­ing just days af­ter Bris­tol-My­ers Squibb $BMY bought in­to Nek­tar’s on­col­o­gy pro­gram with a record up­front. With 5 PD-1/L1 drugs pro­lif­er­at­ing around the world, and more on the way, the fo­cus is on new com­bi­na­tions that work to­geth­er to de­feat can­cer bet­ter than the monother­a­pies. And the lead­ers clear­ly want a stake — or full own­er­ship — in the next big thing in the clin­ic.

Ever­core ISI an­a­lyst Umer Raf­fat was one of the first an­a­lysts out with a note Wednes­day, call­ing the deal a nice “tuck-in” and call­ing out one as­pect of the tech that like­ly helped trig­ger the deal:

Out­side of ear­ly ORR be­ing seen in this tri­al of  lung and blad­der can­cer pts, the most in­trigu­ing sig­nal pre­vi­ous­ly emerg­ing out of this tri­al was the up­reg­u­la­tion of PDL1 ex­pres­sion seen with­in a cou­ple of wks among pts with low PDL1 ex­pres­sion at base­line:

Roger Perl­mut­ter

Like the fast-grow­ing PD-1/L1 field, new re­search in­di­cates that a large ros­ter of on­colyt­ic com­pa­nies have been mul­ti­ply­ing, fol­low­ing new ap­proach­es that promise to sur­pass the pi­o­neer in the field: Am­gen’s T-Vec, which Mer­ck R&D chief Roger Perl­mut­ter bought back in 2011 in a deal that to­taled about a bil­lion dol­lars, when he was run­ning R&D at Am­gen.

The ba­sic ap­proach is the same. These on­colyt­ic virus­es are de­signed to in­fect can­cer cells and ex­plode them, cre­at­ing a tar­get rich en­vi­ron­ment for the im­mune sys­tem’s sen­tinel T cells. But new ap­proach­es promise to amp up the im­pact over Am­gen’s pi­o­neer. And there’s gen­er­al con­sen­sus that it’s a good match for a check­point like Keytru­da.

In Vi­r­a­lyt­ics’ case, re­searchers are work­ing with a for­mu­la­tion of the com­mon cold Cox­sack­ievirus Type A21.

Here’s what we found at the show­case round at AACR last April:

In­ject­ed di­rect­ly in­to le­sions, re­searchers tracked an over­all re­sponse rate of 50%, with 4 pa­tients reg­is­ter­ing a com­plete re­sponse and 7 pa­tients ex­pe­ri­enc­ing a par­tial re­sponse. The me­di­an du­ra­tion of re­sponse was not yet reached, “with a num­ber of re­spons­es greater than six months and sev­er­al still on­go­ing” — a sig­nal of po­ten­tial dura­bil­i­ty.

Among 11 pa­tients who had dis­ease pro­gres­sion fol­low­ing ear­li­er treat­ment with an im­mune check­point in­hibitor, 4 had a re­sponse. The oth­er 7 re­spon­ders had not been treat­ed ear­li­er with a check­point.

“The pre­lim­i­nary over­all re­sponse rate of 50% is very pos­i­tive be­cause pre­vi­ous re­ports in­di­cate an 11% over­all re­sponse rate for ip­il­i­mum­ab (Bris­tol-My­ers’ Yer­voy) alone and an ap­prox­i­mate­ly 28% over­all re­sponse rate for CVA21 alone,” not­ed pri­ma­ry in­ves­ti­ga­tor Bren­dan Cur­tis at the time.

The rel­a­tive­ly low cost for Vi­r­a­lyt­ics may un­der­score the sheer vol­ume of on­colyt­ic virus­es now in de­vel­op­ment. A re­cent study from the Can­cer Re­search In­sti­tute found 69 in clin­i­cal de­vel­op­ment and an­oth­er 95 in a pre­clin­i­cal pro­gram. The Aus­tralian biotech is now in Phase I and II stud­ies, but the field ap­pears poised to ex­plode with piv­otal da­ta in the com­ing year or two.

“Vi­r­a­lyt­ics’s ap­proach of en­gag­ing the in­nate im­mune sys­tem to tar­get and kill can­cer cells com­ple­ments our im­muno-on­col­o­gy strat­e­gy, which is fo­cused on the rapid ad­vance­ment of in­no­v­a­tive monother­a­py ap­proach­es and syn­er­gis­tic com­bi­na­tions to help the broad­est range of can­cer pa­tients,” said Roy Baynes, se­nior vice pres­i­dent and head of glob­al clin­i­cal de­vel­op­ment, chief med­ical of­fi­cer, Mer­ck Re­search Lab­o­ra­to­ries. “We are ea­ger to fur­ther build on Vi­r­a­lyt­ics’s sci­ence as we con­tin­ue our ef­forts to har­ness the im­mune sys­tem to im­prove long-term dis­ease con­trol and sur­vival out­comes for peo­ple with can­cer.”


Im­age: Mer­ck build­ing in Branch­burg, NJ. Shut­ter­stock

Brian Kaspar. AveXis via Twitter

AveX­is sci­en­tif­ic founder fires back at No­var­tis CEO Vas Narasimhan, 'cat­e­gor­i­cal­ly de­nies any wrong­do­ing'

Brian Kaspar’s head was among the first to roll at Novartis after company execs became aware of the fact that manipulated data had been included in its application for Zolgensma, now the world’s most expensive therapy.

But in his first public response, the scientific founder at AveXis — acquired by Novartis for $8.7 billion — is firing back. And he says that not only was he not involved in any wrongdoing, he’s ready to defend his name as needed.

I reached out to Brian Kaspar after Novartis put out word that he and his brother Allen had been axed in mid-May, two months after the company became aware of the allegations related to manipulated data. His response came back through his attorneys.

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UP­DAT­ED: An em­bold­ened As­traZeneca splurges $95M on a pri­or­i­ty re­view vouch­er. Where do they need the FDA to hus­tle up?

AstraZeneca is in a hurry.

We learned this morning that the pharma giant — not known as a big spender, until recently — forked over $95 million to get its hands on a priority review voucher from Sobi, otherwise known as Swedish Orphan Biovitrum.

That marks another step down on price for a PRV, which allows the holder to slash 4 months off of any FDA review time.

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Martin Shkreli [via Getty]

Pris­on­er #87850-053 does not get to add drug de­vel­op­er to his list of cred­its

Just days after Retrophin shed its last ties to founder Martin Shkreli, the biotech is reporting that the lead drug he co-invented flopped in a pivotal trial. Fosmetpantotenate flunked both the primary and key secondary endpoints in a placebo-controlled trial for a rare disease called pantothenate kinase-associated neurodegeneration, or PKAN.

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We­bi­nar: Re­al World End­points — the brave new world com­ing in build­ing fran­chise ther­a­pies

Several biopharma companies have been working on expanding drug labels through the use of real world endpoints, combing through the data to find evidence of a drug’s efficacy for particular indications. But we’ve just begun. Real World Evidence is becoming an important part of every clinical development plan, in the soup-through-nuts approach used in building franchises.

I’ve recruited a panel of 3 top experts in the field — the first in a series of premium webinars — to look at the practical realities governing what can be done today, and where this is headed over the next few years, at the prodding of the FDA.

ZHEN SU — Merck Serono’s Senior Vice President and Global Head of Oncology
ELLIOTT LEVY — Amgen’s Senior Vice President of Global Development
CHRIS BOSHOFF — Pfizer Oncology’s Chief Development Officer

A premium subscription to Endpoints News is required to attend this webinar. Please upgrade to either an Insider or Enterprise plan for access. Already have Endpoints Premium? Please sign-in below. You can contact our Subscriptions team at help@endpointsnews.com with any issues.

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Am­gen, Al­ler­gan biosim­i­lar of Roche's block­buster Rit­ux­an clears an­oth­er US piv­otal study 

Novartis $NVS may have given up, but Amgen $AMGN and Allergan $AGN are plowing ahead with their knockoff of Roche’s blockbuster biologic Rituxan in the United States.

Their copycat, ABP 798, was found to have a clinically equivalent impact as Rituxan — meeting the main goal of the study involving CD20-positive B-cell non-Hodgkin’s lymphoma patients. This is the second trial supporting the profile of the biosimilar. In January, it came through with positive PK results in patients with rheumatoid arthritis.

BeiGene and Mus­tang nail down spe­cial FDA sta­tus for top drugs; Roche bags added cov­er­age for Hem­li­bra

→ BeiGene $BGNE is getting a boost in its drive to field a rival to Imbruvica. The FDA has offered an accelerated review to zanubrutinib, a BTK inhibitor that has posted positive results for mantle cell lymphoma. The PDUFA date lands on February 27, 2020. The drug scored breakthrough status at the beginning of the year.

→ BeiGene isn’t the only biopharma company to gain special regulatory status today. Mustang Bio $MBIO and St. Jude Children’s Research Hospital announced that MB-107, a lentiviral gene therapy for the treatment of X-linked severe combined immunodeficiency, also known as bubble boy disease, has been granted Regenerative Medicine Advanced Therapy status.

Trump ad­min­is­tra­tion re­vives bid to get drug list prices on TV ads

The Trump administration is not giving up just yet. On Wednesday, the HHS filed an appeal against a judge’s decision in July to overturn a ruling obligating drug manufacturers to disclose the list price of their therapies in television adverts — hours before it was stipulated to go into effect.

In May, the HHS published a final ruling requiring drugmakers to divulge the wholesale acquisition cost— of a 30-day supply of the drug — in tv ads in a bid to enhance price transparency in the United States. The pharmaceutical industry has vehemently opposed the rule, asserting that list prices are not what a typical patient in the United States pays for treatment — that number is typically determined by the type of (or lack thereof) insurance coverage, deductibles and out-of-pocket costs. Although there is truth to that claim, the move was considered symbolic in the Trump administration’s healthcare agenda to hold drugmakers accountable in a climate where skyrocketing drug prices have incensed Americans on both sides of the aisle.

Ver­sant-backed Chi­nook gets a $65M launch round for its dis­cov­ery quest in a resur­gent kid­ney field

Versant is once again stepping off the beaten track in biotech to see if they can blaze a trail of their own in a field that has looked too thorny to many investors for years.

The venture group and their partners at Apple Tree are bringing their latest creation out of stealth mode today. Born in Versant’s Inception Sciences’ Chinook Therapeutics is betting that its preclinical take on kidney disease can get an early lead among the companies starting up in the field.

Sir An­drew Dil­lon, NICE's first — and on­ly — chief ex­ec­u­tive to step down next year

Using a laptop borrowed from his former employer, South London’s St George’s Hospital, Sir Andrew Dillon set about establishing NICE — launched by the then health secretary Frank Dobson — in 1999.  On Thursday, the UK cost-effectiveness watchdog said its first and only chief executive — Dillon — is stepping down in March 2020.

Back in the day, decisions about which drugs and interventions were funded by the National Health Service (NHS) were made at the local level, but this ‘postcode prescribing’ system was fraught with skewed healthcare deployment making the structure unsustainable. A national system was deemed necessary — and NICE was formed to bridge that gap.