With sparse R&D prospects, Incyte bets $900M on MorphoSys' CAR-T rival tafasitamab
Having suffered a string of pipeline setbacks in recent years, Incyte is reinvigorating its R&D prospects with a pact to develop and market MorphoSys’ anti-CD19 antibody tafasitamab, a drug being primed as an alluring alternative to the existing CAR-T therapies Kymriah and Yescarta in patients with a common, treatment-resistant form of non-Hodgkin’s lymphoma.
Under the deal, MorphoSys and Incyte will co-commercialize tafasitamab in the United States, while Incyte has exclusive commercialization rights outside the region. For these rights, Incyte is giving MorphoSys an upfront payment of $750 million as well as making an equity investment worth $150 million in the company. The German drugmaker is also eligible to receive milestone payments of up to $1.1 billion, in addition to royalties.
MorphoSys expects the FDA to make its decision on tafasitamab, or MOR208, for use in patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) by mid-2020.
The application to market the drug was based on data that showed tafasitamab, in combination with lenalidomide, induced median progression-free survival of 12.1 months, with a median duration of response at 21.7 months. The overall response rate among 80 patients was 60%, with a formidable 43% complete response rate.
It will compete with Novartis’ Kymriah — which secured approval for DLBCL in 2018 based on an overall response rate of 50%, and a complete response rate of 32% in 68 evaluable patients — although its adoption has been plagued by manufacturing problems, making way for Gilead’s Yescarta to deeper penetrate the CAR-T market. Tafasitamab — which has been bestowed with the FDA’s breakthrough therapy status — is a garden variety antibody unlike the two CAR-T therapies, which require an elaborate personalized manufacturing process (cells are isolated from the patient, manipulated in the lab by adding chimeric antigen receptors to direct T cells to snuff out cancer cells and then re-infused into the patient).
The two partners are also planning to co-develop tafasitamab in other DLBCL indications, as well as follicular lymphoma (FL), marginal zone lymphoma (MZL) and chronic lymphocytic leukemia (CLL).
In 2019, MorphoSys saw some top management changes and some reorganization as the company prepared for tafasitamab’s looming approval. When the company’s 17-year veteran Markus Enzelberger departed from his post as chief scientific officer, the company’s research arm was merged into the development division under chief Malte Peters. CEO Simon Moroney also unveiled plans he would step aside — he was replaced by Jean-Paul Kress, the former CEO of Boston’s Syntimmune, which was swallowed by Alexion.
The MorphoSys deal is key for Incyte — earlier this month the drugmaker’s experimental itacitinib failed a pivotal study, dubbed GRAVITAS-301, in first-line acute graft vs host disease.
“While itacitinib did not represent a major fundamental driver of value in our model, ~ $5/share, we believe the failure of GRAVITAS-301, which follows three prior high profile pipeline disappointments in four years (Jakafi in solid tumors, epacadostat, and Olumiant), may lead some investors to question the company’s ability to consistently generate value from R&D investment,” SVB Leerink Andrew Berens wrote in a note in early January.
Incyte for years has leaned on its flagship JAK inhibitor Jakafi, which secured about $1.2 billion in sales in the first three quarters of 2019.
“We believe this is a solid deal, as the tafa profile appears to be the best-in-class CD19/CD20 for the treatment of R/R diffuse large B-cell lymphoma (DLBCL), given the totality data of efficacy, safety, and treatment convenience. While the deal could solidify INCY’s pipeline and further diversify revenue, we believe the deal may disappoint some investors who are looking for a transformative deal to strategically extend the Jakafi intellectual property runway beyond 2027,” Berens wrote in a note on Monday.
“Given the SVB Leerink’s estimate of tafasitamab’s worldwide peak sales of ~$1bn, we also think deal might not be sufficient to potentially replace Jakafi revenue for the long term. Also, due to the financial terms, it is unclear to us when the company would be capable of doing a more transformative deal.”
Social image: Incyte, AP Images
