Friday, February 07, 2014

Can Novel-Novel Combinations Work? Deals Of The Week Watches Merck Test The Waters

Merck & Co. Inc.’s Feb. 5 announcement that it is collaborating with three companies to test various combinations of its investigational oncology compound MK-3475 with their drugs highlights the extent to which the big pharma is committed to building a major presence in onco-immunotherapy. The company appears prepared to take aggressive steps to achieve its aims, even as it cuts back in other parts of its business.

The announcement also signals just how important combination drug trials are becoming to certain areas of cancer therapy development, and in particular the importance of “novel-novel” combination trials. Until recently, the industry rarely, if ever, undertook trials in which two investigational-stage drugs are put through clinical development together in the hopes that results will be stronger than either would have garnered alone. With the exception of some government sponsored projects, even combining two novel drugs made by the same company has been rare. Lack of scientific drivers and operational and legal hurdles have kept potential partners at bay.

Certainly science is shifting, and many oncology researchers believe early-stage collaborations are inevitable, given the direction of scientific innovation and the costly and time-consuming nature of clinical trials. Furthermore, FDA has shown greater willingness to consider novel-novel combinations in recent years, issuing a first draft guidance in December 2010, and, in June 2013, a final guidance, which clarifies its thinking on the potential regulatory path for approving two new drugs as a combination regimen.

RocheCyclacel Pharmaceuticals Inc., and just maybe one or two others, are currently testing combinations of their own investigational drugs--developments are followed diligently by "The Pink Sheet"'s Shirley Haley and others on the team. But those initiatives pale in terms of scope with Merck’s willingness to work with Pfizer Inc., Incyte Corp., and Amgen Inc.   The drug involved is a high-profile litmus test for Merck: MK-3475, a PD-1-specific antibody, is currently in Phase III as a monotherapy for melanoma and is being studied in a total of 13 clinical trials involving more than 4,000 patients suffering from a variety of cancers.  The company announced in January that it is starting a rolling NDA for the drug, which it expects to complete in mid-2014.

Investigators will evaluate MK-3475's safety and efficacy when combined with Pfizer’s small molecule kinase inhibitor Inlyta (axitinib) in patients with renal cell carcinoma, and also with the investigational immuno-oncology drug PF-05082566 in multiple cancers. Inlyta already is on the market as a monotherapy for RCC, and ‘2566, which targets the human 4-1BB receptor, is in Phase I, according to Pfizer’s website.

In the second agreement, Merck will cooperate with Incyte on a randomized, double-blinded Phase I/II study of MK-3475 and Incyte’s investigational drug INCB24360, an immunotherapy that inhibits indoleamine 2, 3-dioxygenase (IDO) in patients with previously treated metastatic and recurrent non-small cell lung cancer. Finally, MK-3475 and Amgen’s investigational immunotherapy talimogene laherparepvec will be put to the test in a Phase Ib/II study in patients with previously untreated mid- to late-stage melanoma.

Merck already has signed a similar deal with GlaxoSmithKline PLC around combining MK-3475 with GSK’s Votrient (pazopanib) in advanced RCC, and it seems ready for more. “You can expect to see more of thse deals, both in terms of monotherapy and in combinations,” said Merck's VP, Clinical Oncology Research Eric Rubin on the day the company announced its triple play. As for the particular compounds chosen, he noted, these were areas of particular interest based on “our understanding of drug mechanisms and the potential of combination effects that will be synergistic in their efficacy.”

He would not discuss details of the data Merck looked at to select its partners, but said each case had “a strong rationale.” A  fair amount of literature has been published on IDO as a target and its involvement in immune regulation and in particular with melanoma, for example, he said. Nor would he discuss timing of read outs from any trials, all of which are expected to begin later this year.  The Incyte compound is currently in Phase II as a monotherapy for ovarian cancer and as a combination therapy with Bristol-Myers’ Squibb’s Yervoy (ipilimumab) for advanced melanoma.

Merck’s previous experience with a novel-novel combination trial involving its AKT (part of the phosphaltidylinositol-3 kinase pathway) inhibitor and AstraZeneca PLC’s MEK (mitogen-activated protein kinase) inhibitor also likely paved the way. That effort began in 2009 and was among the first, if not the first, examples of two big companies collaborating in such close fashion on such early-stage compounds.  The Merck drug was in Phase I trials at the time the deal was signed, while the AZ drug was in Phase II but had not yet reached proof of concept.  The timing inevitably led to concerns about sharing of proprietary data and intellectual property, as well as scientific uncertainties and questions about potential regulatory uncertainties down the road.

Merck isn’t saying much about how the new deals are managing the operations or funding of the trials, but Rubin noted that the earlier relationship with AZ has been positive and “a good way to learn how to do this.” Some of the learnings resulted in other trials, he said, including as one of four arms of the BATTLE-2 trial, which investigators will discuss at the American Association of Cancer Research meeting in April. That trial, now recruiting 450 patients with advanced non-small-cell-lung cancer, is expected to complete in 2017, according to

The structure of the 2009 deal was fairly simple, with Merck sponsoring the Phase I study and both companies splitting the costs.  A joint governance committee with shared decision making rights oversaw the program. IP arising from the collaboration is to be shared by the inventors, and most importantly, each company was to have freedom to study its compound alone or with other drugs as well.

Merck’s been active on other fronts in the deal space, and recently revamped its R&D unit's business development group, bringing in a new leader, Iain Dukes from Amgen. Other companies are also doing their share of wheeling and dealing, as is seen in the latest round of ...--Wendy Diller

Merck/ Ablynx: Merck  has turned again to Ablynx’s Nanobody technology platform to identify new product candidates, this time compounds directed at immune checkpoint modulators, currently a hot area of research following the success of  Yervoy.

Building on their initial research partnership started in October 2012 in neuroscience, Merck and Ablynx have now agreed a research collaboration and licensing agreement that will discover and develop several predefined Nanobodies that could become cancer immunotherapies. Nanobodies are based on single-domain antibody fragments, and have several beneficial features compared with conventional small-molecule or antibody-based therapies, including the possibility of being linked together in bi-specific or tri-specific constructs. Researchers believe combinations of immune checkpoint inhibitors could be important in the treatment of certain cancers.

Ablynx will receive an upfront of €20 million ($27 million) and up to €10.7 million in research funding during the three years of research covered by the new collaboration signed Feb. 3. The Ghent, Belgium-based biotech could also receive development, regulatory and commercial milestones on achieved sales thresholds for a number of products that could amount to a chunky €1.7 billion, plus tiered royalties. Merck will develop, manufacture and commercialize any products resulting from the collaboration. 

Ablynx has been active over the past six months in signing up Big Pharma companies for research collaborations and partnerships. In September 2013 it strengthened an existing collaboration with Merck Serono by setting up a dedicated discovery team for the German Big Pharma at Ablynx. In the same month, U.S company AbbVie licensed the anti-interleukin-6 Nanobody, ALX-0061, for global development.-- John Davis

Accelerating Medicines Partnership:  NIH Director Francis Collins outlined a broad public/private partnership Feb. 4 to speed up and increase the success rate of research into finding new biological pathways for therapeutic intervention. Called the Accelerating Medicines Partnership (AMP), the alliance will combine the efforts of NIH, FDA, 10 biopharma companies, and the non-profit community to transform the current discovery model for new drugs and diagnostics.
The five-year effort is funded with $230 million provided in approximately a 50/50 split between NIH and the pharmaceutical industry. It will focus first on characterizing effective biomarkers and distinguishing biological targets most likely to respond to new therapies in three areas: Alzheimer’s disease, type 2 diabetes and a pair of autoimmune disorders, rheumatoid arthritis and systemic lupus erythematosus.

AMP’s work will be considered “pre-competitive” – all parties have agreed to forego seeking any intellectual property rights on the group’s work, which will be disseminated for free usage by any and all medical researchers, public or private, affiliated or independent. “Competition will come later after the initial discovery phase where we, the AMP, collectively identify the most compelling targets and then the full competitive power of the pharmaceutical industry will kick in to develop the actual therapeutic molecules,” Collins said.

The companies participating in AMP are AbbVie, Biogen Idec, Bristol-Myers Squibb, GlaxoSmithKline, Johnson & Johnson, Eli Lilly, Merck, Pfizer., Sanofi and Takeda. Also taking part are PhRMA, the Foundation for the NIH and a set of disease advocacy groups focused on the four diseases chosen for initial focus. --Joseph Haas

Myriad/ Crescendo: Having watched Crescendo Bioscience gain a foothold in the market for inflammatory and autoimmune diagnostics market, Myriad Genetics is now moving to acquire the company – a right it obtained via a novel strategic investment agreement in 2011. That agreement included a $25 million loan – nondilutive financing that was to be repaid in years 4-6 – and a three-year option to acquire Crescendo at a multiple of revenues once those revenues hit an initial threshold and according to a formula gauging their rate of growth after that.

In November 2013, Myriad said Crescendo had met the terms for exercising the option. The purchase price – $270 million cash, less $25 million payback on the loan – was calibrated according to the pre-established revenue target. The press release announcing the acquisition noted that Crescendo’s sales for the most recent quarter were $10 million. Sales of Crescendo’s inaugural product, the Vectra DA protein-based diagnostic for measuring disease activity in RA patients, surged in 2013 owing to a confluence of factors: In May, Crescendo obtained CMS coverage, representing close to 40% of the RA population. It simultaneously expanded the Vectra sales force from 20 to 33.

Then in June, the company presented ten posters at the EULAR Annual Meeting, which further drove interest in ordering the test. The deal is in keeping with Myriad’s goal of diversification in therapy area (beyond oncology) and technology (protein versus DNA/RNA tests). (A more detailed analysis will be out shortly in Informa's monthly strategy publication, IN VIVO.) The announcement did little to deflect analyst concerns over Myriad’s immediate prospects, however. CMS recently reduced payments for its BRACAnalysis tests by almost half, and the company is facing new competition in BRCA testing following the US Supreme Court decision last June invalidating BRCA gene patents.  As Michael Yee of RBC Capital Markets said in a note following Myriad's February 4 earnings call, during which the Crescendo acquisition was discussed, “we think the stock remains a battle of Bulls/Bears this year until more visibility occurs.”--Mark Ratner

Valeant/ PreCision: When it comes to acquisitions, Valeant Pharmaceuticals investors have high expectations now that CEO J. Michael Pearson have vowed the company will become a top-five pharma by 2016 with business development the key avenue to meeting that goal. Valeant announced its first acquisition of the year Feb. 3, buying PreCision Dermatology Inc., a prescription and cosmetic dermatology firm. Valeant agreed to buy the privately-held dermatology company for $475 million in cash plus $25 million in milestones.

Relative to some of Valeant’s recent acquisitions like Medicis Pharmaceutical Corp. for $2.6 billion in 2012 and Bausch &  Lomb Inc. for $8.7 billion in 2013, the PreCision buyout is smaller and should be one that an experienced buyer like Valeant can quickly integrate into its operations. PreCision’s sales are expected to be approximately $130 million in 2014, according to Valeant. The company, based in Cumberland, R.I., employs about 175 people. It was established in December 2010 from a spinout of Onset Therapeutics, a subsidiary owned by Collegium Pharmaceutical Inc. PreCision’s initial investors were Essex Woodlands, Boston Milennia Partners, Frazier Healthcare and Westfield Capital Management.

The acquisition of Medicis catapulted Valeant into a leader position in dermatology, where it ranks second behind Galderma SA. The company added more dermatology businesses in 2013, including Obagi Medical Products Inc., the maker of aesthetic and prescription skin-care lines, which it bought for $418.4 million. In December, Valeant said it would buy Solta Medical Inc. for $237 million for its aesthetic devices, which are sold to dermatologists.--Jessica Merrill

Novo Nordisk/ Zosano: In the crowded market for diabetes drugs, methods of administration and delivery systems can be important differentiation factors. Novo Nordisk added a new delivery system to its experimental drug pipeline on Feb. 5, when it partnered with Fremont, Calif.-based Zosano Pharma Inc. to gain rights to its microneedle patch system. Novo Nordisk will attempt to create a transdermal delivery system for semaglutide, its Phase III glucagon-like peptide-1 analogue for type 2 diabetes.

Zosano received an up-front payment of undisclosed size to cement the deal. Novo Nordisk agreed to pay development, regulatory and commercial milestones worth up to $60 million for the first product jointly developed under the agreement, as well as royalties. The companies will also investigate other GLP-1 products, each of which could trigger an additional $55 million in milestone payments. The companies will collaborate on development during the preclinical product stage, but Novo Nordisk will cover further development costs and reimburse Zosano for other development and manufacturing costs.

Spun out of Alza Corp. in 2006, Zosano has raised more than $120 million from investors including New Enterprise Associates, ProQuest Investments, and Nomura Phase4 Ventures. It has previously tested its microneedle patches in products based on Eli Lilly’s Forteo (teriparatide) and Amgen’s Epogen (epoetin alfa).--Paul Bonanos

Hat tip to  James Moore, Certified Accountants for image

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