After watching its late-stage asthma program for its IL-13 drug lebrikizumab flounder with mixed and markedly unimpressive results, Roche is outlicensing the bulk of the development rights to Dermira $DERM in a $1.4 billion deal — which starts off with $135 million in near-term cash.
Dermira is planning to hustle its new drug directly into a Phase IIb study for atopic dermatitis so it can line up a dose as quickly as possible that researchers can take into Phase III.
The pharma giant, which once counted lebrikizumab as one of its top late-stage efforts, is settling for $80 million upfront, $55 million next year, $40 million on the Phase III launch and another $1.24 billion in milestones. It’s also keeping development rights to interstitial lung diseases, such as idiopathic pulmonary fibrosis.
The bloom came off the rose on lebrikizumab in early 2016, when it scored one win and one loss in identical Phase III studies for asthma. The setback came as Regeneron/Sanofi were racking up stellar data from a slate of trials for Dupixent — approved for atopic dermatitis in late March — as rivals from AstraZeneca, Teva and GSK were either entering the market or in late-stage development.
The results were published in The Lancet Respiratory Medicine, which also concluded that Roche’s two Phase III studies for lebrikizumab fell far short of the bar on efficacy. A summary condemns the drug with slight criticism:
The findings suggest that the drug, which blocks IL-13, may not be sufficient to provide clinically meaningful improvements in reducing asthma exacerbations.
Evercore ISI’s Umer Raffat says he was intrigued by the Phase II atopic dermatitis data on this drug, which looks comparable to Dupixent but may not stand up for the land haul.
He adds that “this could be a potential $1B+ opportunity (amidst a potential ~$5B atopic dermatitis class for biologics as per consensus),” but if so, why would Roche sell off rights to a blockbuster?
That question seemed to weigh on investors today, as Dermira’s shares gradually buckled, dropping 15% by late afternoon.
Finding out what this drug can do in atopic dermatitis won’t come cheap. After you add in the early payments to Roche, Dermira says it will spend about $200 million on landing the Phase IIb data. At that point, it will have a much better idea of where it stands.
“Lebrikizumab is a potent and specific inhibitor of IL-13 with a differentiated mechanism of action and attractive pharmacokinetic properties,” said Eugene Bauer, chief medical officer of Dermira. “Data from preclinical and clinical studies, including pharmacokinetic and pharmacodynamic results from early clinical experience in atopic dermatitis, are encouraging and suggest higher doses of lebrikizumab could lead to greater efficacy in atopic dermatitis, while potentially offering a less frequent and therefore more convenient dosing regimen relative to existing therapies. If successfully developed, we believe that lebrikizumab could be a best-in-class IL-13 inhibitor and could have a best-in-disease profile.”
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