Remember momelotinib? Gilead unloads shelved JAK inhibitor for token $3M payment from its former developers
About 6 years ago, Gilead $GILD paid $510 million in cash to bag YM BioSciences and its only drug — a once-promising JAK inhibitor later named momelotinib for myelofibrosis. The drug, however, turned out to be an embarrassing dud in the clinic, and now the big biotech is sweeping it out in a low-dollar deal with Sierra Oncology — which is run by the people who may know this drug best.
Sierra has agreed to pay Gilead only $3 million in cash for the asset, and they plan to push it into a new late-stage study to get the data they need. That will come on top of two disappointing pivotal trials at Gilead that read out in late 2016.
It didn’t look pretty, which is why Gilead was willing to hand it off for a token upfront payment. The rest of the $192 million in biobucks included in the Sierra deal will be paid out on the uncertain prospects of a clinical turnaround.
What’s the problem? Momelotinib proved statistically non-inferior to the rival Jakafi on a key measure of efficacy, but didn’t look any better and didn’t hit its mark on a key secondary for the total symptom score — withering its commercial prospects. In addition, the studies were hit with a high washout rate for patients due to side effects. That in turn added to pressure on the company to do a serious M&A deal, which eventually led to its acquisition of Kite.
Little Sierra believes it can still distinguish itself for the disease and the market. And shares of the biotech, which have been on a roller coaster ride for the past year, were up about 6% in pre-market trading.
They are not new to this drug. CEO Nick Glover used to run YM ahead of the Gilead buyout. And they’re going back in with their expert insights intact. And they gained an endorsement from an expert in the field.
“The Phase III clinical data for momelotinib demonstrate clinical benefits in all of these categories and I believe the drug candidate warrants further development,” notes MD Anderson’s Srdan Verstovsek. “Given its anemia benefit, momelotinib could potentially become an important option for the treatment of myelofibrosis.”
Silicon Valley Bank came up with a $15 million debt facility to provide added financing as they start that journey. Another $25 million could also be put up in the pact, provided SVB signs off.