The wild card: Just how much is Medi­va­tion’s ta­la­zoparib worth?


Now that Sanofi has backed off its saber rat­tling and won a seat at the bar­gain­ing ta­ble with a sweet­ened of­fer for Medi­va­tion, much of the fo­cus will turn to the ex­per­i­men­tal PARP in­hibitor ta­la­zoparib. Medi­va­tion bought the drug last year from Bio­Marin for $410 mil­lion cash, adding $160 mil­lion on the back end of the deal. And it’s proven to be the wild card in this high-stakes game of biotech M&A.

Medi­va­tion made a rep­u­ta­tion for it­self de­vel­op­ing Xtan­di, the block­buster prostate can­cer drug. It’s build­ing its rep­u­ta­tion around grow­ing sales. And any­one who comes in with a win­ning bid — whether that’s Sanofi or Pfiz­er or Cel­gene or any oth­er com­pa­ny — is go­ing to have to pay a pre­mi­um for that.

Ta­la­zoparib, though, is the one thing in Medi­va­tion’s pipeline that can add a thick ex­tra lay­er of cash to any win­ning bid, and its ex­ecs have been mak­ing the case that this is a new block­buster in the mak­ing with multi­bil­lion-dol­lar sales po­ten­tial.

Jen­nifer Jar­rett, CFO of Medi­va­tion

“Ta­la­zoparib can be an even big­ger prod­uct” than Xtan­di, Medi­va­tion CFO Jen­nifer Jar­rett tells me. Jar­rett’s brand new to the com­pa­ny, but she’s now part of the front­line crew at Medi­va­tion that is look­ing to go far past Sanofi’s lat­est bid of $58 a share plus a $3 CVR for ta­la­zoparib sales be­fore it ac­cepts an of­fer.

Val­u­a­tions on these prod­ucts are all over the map. Gold­man once fore­cast peak sales of ta­la­zoparib at a mod­est $325 mil­lion. When As­traZeneca was fight­ing off Pfiz­er, it bold­ly put a $2 bil­lion peak sales fig­ure on Lyn­parza (ola­parib). And now a chas­tened Clo­vis is pur­su­ing a rolling sub­mis­sion for its PARP in­hibitor ru­ca­parib, hop­ing it can save the com­pa­ny af­ter a midair ex­plo­sion for rocile­tinib.  Ab­b­Vie is al­so in this race.

The leader is Tesaro, which just un­veiled promis­ing da­ta for ni­ra­parib and is now on its way to the FDA with an ap­pli­ca­tion for ovar­i­an can­cer. Their da­ta high­light a clear im­pact for the tar­get­ed drug in a pop­u­la­tion of germline BR­CA mu­ta­tion car­ri­ers, with a me­di­an PFS of 21 months in the drug group com­pared to 5.5 months in the con­trol arm — a 15.5-month ad­van­tage.

I talked to Jar­rett ahead of the lat­est de­vel­op­ments with Sanofi and Tesaro, but Medi­va­tion was prepped for pos­i­tive da­ta on the ri­val drug. Tesaro’s suc­cess, she says, would help de­risk the whole field.

“It’s pos­i­tive for the class,” she says, and there’s a case that can be made that “we think ours is more po­tent.”

In a se­ries of slides, Jar­rett — who de­clined to pro­vide a peak sales es­ti­mate for ta­la­zoparib — went on to com­pare some of the safe­ty and ef­fi­ca­cy da­ta that’s avail­able for the four con­tenders in this mar­ket.

Medi­va­tion doesn’t have a lot of da­ta to go by. But in a small Phase I study in­ves­ti­ga­tors tracked a 57% over­all re­sponse rate for BR­CA-mu­tat­ed ovar­i­an can­cer. There were al­so sev­er­al re­spons­es in non-BR­CA mu­tat­ed cas­es, in­di­cat­ing a po­ten­tial­ly broad­er use for this drug.

 


Ola­parib, which is al­so in line for a bad­ly need­ed Phase III up­date soon, was ap­proved by the FDA with a 34% ORR, says Medi­va­tion.

Medi­va­tion al­so tai­lored some safe­ty da­ta to look at ad­verse events among more than 10% of the pa­tients stud­ied. Not sur­pris­ing­ly, it looked pret­ty good for ta­la­zoparib.

Any fi­nal an­swers on the val­u­a­tion ques­tions will have to wait on late-stage da­ta. There’s the Phase III Em­bra­ca tri­al for BR­CA-mu­tat­ed breast can­cer which reads out in the first half of 2017. There’s a reg­is­tra­tion study be­ing prepped with the FDA on prostate can­cer — which would put it in com­pe­ti­tion with J&J, which re­cent­ly land­ed the prostate can­cer rights to ni­ra­parib. There’s al­so a Phase III for small cell lung can­cer — where they’ve tracked sin­gle-agent ac­tiv­i­ty — that could get go­ing lat­er this year. And Medi­va­tion is def­i­nite­ly in­clud­ing the chance for an ac­cel­er­at­ed ap­proval.

Who­ev­er wins the auc­tion for Medi­va­tion will like­ly wind up in a head-to-head bat­tle with As­traZeneca, still work­ing with a weak case that couldn’t win over the FDA’s out­side ex­perts, as well as an up-and-com­ing Tesaro, part­nered with J&J. Clo­vis can’t af­ford yet an­oth­er de­ba­cle, and will be play­ing for its life. And Ab­b­Vie will be wait­ing in the wings with a less­er known drug of its own.

That won’t make it easy for the sales team to de­liv­er on Medi­va­tion’s best case sce­nario. So don’t be sur­prised if Medi­va­tion tries hard to fight off the CVR, look­ing for an up­front pay­ment on its block­buster case for ta­la­zoparib.

In biotech, it’s of­ten eas­i­er to make a case for an ex­per­i­men­tal drug than it is to de­liv­er on one. But this game is get­ting clos­er to a wrap. And the com­pa­ny plans to fol­low up with a spe­cial pre­sen­ta­tion on this top­ic lat­er to­day as it con­tin­ues to press its ar­gu­ment.

A New Fron­tier: The In­ner Ear

What happens when a successful biotech venture capitalist is unexpectedly diagnosed with a chronic, life-disrupting vertigo disorder? Innovation in neurotology.

That venture capitalist was Jay Lichter, Ph.D., and after learning there was no FDA-approved drug treatment for his condition, Ménière’s disease, he decided to create a company to bring drug development to neurotology. Otonomy was founded in 2008 and is dedicated to finding new drug treatments for the hugely underserved community living with balance and hearing disorders. Helping patients like Jay has been the driving force behind Otonomy, a company heading into a transformative 2020 with three clinical trial readouts: Phase 3 in Ménière’s disease, Phase 2 in tinnitus, and Phase 1/2 in hearing loss. These catalysts, together with others in the field, highlight the emerging opportunity in neurotology.
Otonomy is leading the way in neurotology
Neurotology, or the treatment of inner ear neurological disorders, is a large and untapped market for drug developers: one in eight individuals in the U.S. have moderate-to-severe hearing loss, tinnitus or vertigo disorders such as Ménière’s disease.1 With no FDA-approved drug treatments available for these conditions, the burden on patients—including social anxiety, lower quality of life, reduced work productivity, and higher rates of depression—can be significant.2, 3, 4

Af­ter 4 years of furor, the FTC and New York state ac­cuse Mar­tin Shkre­li of run­ning a drug mo­nop­oly. And this time they plan to squash it

Pharma bro Martin Shkreli was jailed, publicly pilloried and forced to confront some lawmakers in Washington riled by his move to take an old generic and move the price from $17.50 per pill to $750. But through 4 years of controversy and public revulsion, his company never backed away from the price — left uncontrolled by a laissez faire federal policy on a drug’s cost.

Now the FTC and the state of New York plan to pry his fingers off the drug once and for all and open it up to some cheap competition.

Patrik Jonsson, the president of Lilly Bio-Medicines

Who knew? Der­mi­ra’s board kept watch as its stock price tracked Eli Lil­ly’s se­cret bid­ding on a $1.1B buy­out

In just 8 days, from December 6 to December 14, the stock jumped from $7.88 to $12.70 — just under the initial $13 bid. There was no hard news about the company that would explain a rise like that tracking closely to the bid offer, raising the obvious question of whether insider info has leaked out to traders.

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Short at­tack­er Sahm Ad­ran­gi draws crosshairs over a fa­vorite of Sanofi’s new CEO — with PhII da­ta loom­ing

Sahm Adrang Kerrisdale

Kerrisdale chief Sahm Adrangi took a lengthy break from his series of biotech short attacks after his chief analyst in the field pulled up stakes and went solo. But he’s making a return to drug development this morning, drawing crosshairs over a company that’s one of new Sanofi CEO Paul Hudson’s favorite collaborators.

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UP­DAT­ED: Ac­celeron of­fers thumbs up on a PhII suc­cess for would-be block­buster drug — and shares rock­et up

There’s no public data yet, but Acceleron $XLRN says that its first major trial readout of 2020 is a success.

In a Phase II study of 106 patients with pulmonary arterial hypertension (PAH), Acceleron’s experimental drug sotatercept hit its primary endpoint: a significant reduction in pulmonary vascular resistance. The drug also met three different secondary endpoints, including the 6-minute walking test.

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Civi­ca and Blue Cross Blue Shield launch new ven­ture to low­er gener­ic prices

Five years after Martin Shkreli put a smug face to the volatile prices companies can charge even for generic drugs, payers and governments are coming up with outside-the-box solutions.

The latest fix is a new venture from the Blue Cross Blue Shield Association, 18 of its members and Civica, the generics company founded in 2018 by hospitals fed up with high prices for drugs that had long-since lost patent protection. While Civica focused on drugs that hospitals purchased, the new company will aim to lower prices on drugs that, like Shkreli’s Daraprim, are purchased by individuals.

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Merck Invests in State-Of-The-Art Biotech Development Facility in Switzerland

Mer­ck KGaA match­es lofty R&D goals with €250M in­vest­ment in­to a new clin­i­cal man­u­fac­tur­ing site in Switzer­land

As Merck KGaA strives to prove itself as a capable biopharma R&D player, it has begun construction on a €250 million facility dedicated to developing and manufacturing drugs for use in clinical trials.

The German drugmaker chose a location at Corsier-sur-Vevey, Switzerland, where it already has a commercial manufacturing site, in order to “bridge together research and manufacturing.”

“This investment in the Merck Biotech Development Center reflects our commitment to speed up the availability of new medicines for patients in need, and confirms the importance of Switzerland as our prime hub for the manufacturing of biotech medicines,” CEO Stefan Oschmann said at the groundbreaking ceremony, according to a statement.

Breast can­cer ap­proval in tow, As­traZeneca, Dai­ichi armed an­ti­body scores in key gas­tric can­cer study

AstraZeneca kicked off Monday with a flurry of good news. Apart from unveiling positive results on its stroke trial testing its clot-fighter Brilinta, and welcoming its experimental IL-23 inhibitor brazikumab back from Allergan — the British drugmaker also disclosed some upbeat gastric cancer data on its HER2-positive oncology therapy it is collaborating on with Daiichi Sankyo.

Buoyed by the performance of its oncology drugs, last March AstraZeneca chief Pascal Soriot bet big to partner with Daiichi on the cancer drug, with $1.35 billion upfront in a deal worth up to roughly $7 billion. Roughly 8 months later, as 2019 drew to a close, the FDA swiftly approved the drug — trastuzumab deruxtecan — for use in breast cancer, months ahead of the expected decision date.

Sor­ren­to shrugs off an anony­mous pri­vate eq­ui­ty group’s $1B of­fer to buy the com­pa­ny

San Diego-based Sorrento Therapeutics isn’t going the M&A route — at least not today.

The biotech caused quite a stir when it put out word a few weeks ago that an unidentified private equity group was bidding a billion dollars-plus for the company. The news drove a quick spike in the company’s share price as investors hooked up for the ride — that didn’t happen.

The update sparked a 5% drop in the share price $SRNE ahead of the bell. It’s now trading just above $4, without any evidence that the $7 price looked like it was firm.