Maintains Outperform
Monday, June 10, 2019
Bayer, China’s CStone Pharmaceuticals Team Up on Cancer Program
China-based CStone Pharmaceuticals and Bayer have teamed up to evaluate the safety and efficacy of a checkpoint inhibitor with a multi-kinase inhibitor for the treatment of multiple cancers, including gastric cancer.
The two companies will pair CStone’s CS1001 with Bayer’s regorafenib, an oral multi-kinase inhibitor that targets VEGFR, FGFR, CSF1R and other receptors. This is the first global proof of concept study carried out as a collaboration between the two companies. CStone will be the study sponsor and Bayer will provide regorafenib throughout the clinical trial program. Financial terms of the collaboration were not disclosed.
CStone has been on a collaboration roll over the past several months. Last week, CStone received approval to initiate clinical development in China of CS1001 in combination with Blueprint Medicine’s BLU-554 (CS3008) in patients with locally advanced or metastatic hepatocellular carcinoma. In 2015, there were approximately 326,000 deaths caused by liver cancer in China, making it the second leading cause of cancer death. In May, CStone and Switzerland-based Numab Therapeutics AG announced a licensing agreement for the development and commercialization of ND021, a potential best-in-class monovalent, tri-specific antibody-based molecule targeting PD-L1, 4-1BB, and human serum albumin.
CS1001 is one of CStone’s backbone immuno-oncology pipeline candidates. The drug has demonstrated that it is well-tolerated and has promising anti-tumor activities across a variety of tumor types in clinical studies. CStone is evaluating CS1001 in seven clinical trials. CS1001 completed a Phase I dose-escalation study in China and has demonstrated promising anticancer activity and good tolerance, the company said. CS1001 is currently being evaluated in multiple clinical trials including a bridging Phase I trial in the United States, a multi-arm Phase Ib study, two pivotal Phase II studies and three Phase III studies in China in various cancer types, respectively. It has not yet been approved by any regulatory health authority.
Bayer’s Regorafenib, known as Stivarga in the United States, is approved in more than 90 countries for the treatment of metastatic colorectal cancer and metastatic gastrointestinal stromal tumors. It is also approved in more than 80 countries for the second-line treatment of advanced hepatocellular.
Scott Z. Fields, head of oncology development at Bayer’s Pharmaceutical Division noted that there is a rising trend in cancer therapy of combining checkpoint inhibitors with multi-kinase inhibitors. Fields said the goal is to find new solutions for the many treatment gaps that remain for cancer patients. Fields said Bayer looks forward to the collaboration with CStone and exploring the potential of its multi-kinase inhibitor, regorafenib.
Gastric cancer was chosen as one of the targets for this collaboration due to the lack of safe and effective therapies. Lin Shen, vice president at the Peking University Cancer Hospital, said a combination of PD-1/PD-L1 antibodies with multi-kinase inhibitors that target VEGFR can induce significant synergistic anti-tumor effects. Shen said the hope is that a combination of CS1001 and Regorafenib will provide a new treatment option for gastric cancer patients.
Frank Jiang, CStone’s chief executive officer and chairman of the board, said they are pleased that Bayer agreed to partner with the company as the decision is a recognition of the potential of CS1001.
“We hope, by complementing our two companies’ pipelines via this combination therapy, that we can develop better cancer treatments for patients. In addition, this collaboration will be a big step forward for CStone’s global strategy when we generate positive data,” Jiang said in a statement.
Dr. Reddy’s Lab reports positive mid-stage data in plaque psoriasis study
Dr. Reddy’s Laboratories (NYSE:RDY) has announced positive topline results from its Phase 2b study of PPC-06 (formerly referred to as XP23829) in patients with moderate to severe plaque psoriasis.
In the study, PPC-06 met both co-primary endpoints i.e. PASI-75 and IGA scores of 0 or 1 with at least a 2-point reduction from baseline, after 24 weeks of oral treatment.
PPC-06 is an extended release formulation of a fumaric acid ester, in-licensed from Xenoport, for further development to treat moderate to severe plaque psoriasis.
Sesen Bio up premarket on advancement of Vicinium
Sesen Bio (NASDAQ:SESN) has completed a Type B Pre-BLA meeting regarding the approval path for Vicinium for the treatment of patients with Bacillus Calmette-Guérin (BCG) unresponsive, non-muscle invasive bladder cancer (NMIBC).
The FDA has recommended an Accelerated Approval Pathway along with Rolling Review, and the Company expects to initiate BLA submission in Q4.
The FDA also indicated that no additional clinical trials are necessary for a BLA submission.
Sesen Bio plans to schedule two additional meetings with the FDA in H2 2019, a Type C meeting to discuss the details of a post-marketing confirmatory trial, and a Type B CMC meeting to discuss the submission strategy of the CMC module.
Akero Therapeutics files for $75M IPO
Akero Therapeutics (AKRO) has filed a preliminary prospectus for an IPO of 5M common shares at $14 – 16, valuing the offering at $75M from the midpoint.
The South San Francisco-based biotech has its sights set on therapies to treat nonalcoholic steatohepatitis (NASH). Lead candidate is AKR-001, an analog of a naturally expressed hormone called fibroblast growth factor 21 (FGF21) that regulates the metabolism of lipids, carbs and proteins. In previous studies in type 2 diabetics, AKR-001 was associated with substantial improvements in lipid metabolism and insulin sensitivity. A Phase 2a clinical trial launched a few weeks ago. The estimated primary completion date is March 2020.
2019 Financials (Q1): Operating Expenses: $5.5M (+999%); Net Loss: ($5.4M) (-999%); Cash Burn: ($5.4M) (-999%).
Most new Medicare beneficiaries opt for fee-for-service over Medicare Advantage
Though increasing numbers of baby boomers are aging into Medicare, relatively few are choosing Medicare Advantage (MA) plans as their entry point to the program, a new study shows.
New data from the Kaiser Family Foundation shows that 29% of new Medicare enrollees chose an MA plan in 2016, a rate that’s slightly below the overall penetration rate for MA (31%).
That figure has remained relatively flat over the past several years, the study shows. In 2011, 23% of newly eligible Medicare beneficiaries chose an MA plan.
“One line of thinking has been that the Baby Boomer Generation will enroll in Medicare Advantage plans over traditional Medicare at much higher rates than previous generations because they have had more experience with managed care in their working years,” the researchers wrote.
MA enrollment has been expected to shoot up as the Medicare population grows significantly. The findings suggest the hype might have been a bit overstated, the researchers said.
Interest in MA plans varied notably by geographic region, according to the study. For example, in Oregon, Minnesota and Puerto Rico, 40% of new beneficiaries selected MA over traditional Medicare in their first year.
However, in Delaware, Maryland, Nebraska, Vermont, New Hampshire and the District of Columbia, fewer than 11% of new beneficiaries picked an MA plan in their first year.
The divides were similar at the county level, the study found. In counties that house Atlantic City, New Jersey, and Baltimore, enrollment was below 11%, while the counties housing Pittsburgh and Miami saw more than half of new beneficiaries choose MA.
The study also found that people living in areas with greater numbers of Medicare beneficiaries overall are more likely to enroll in an MA plan. In urban counties where there were 100,000 or more Medicare beneficiaries, 35% of new enrollees chose MA over traditional Medicare.
That number dropped to 23% in counties with just 5,000 to 10,000 overall Medicare beneficiaries.
Though MA enrollment is projected to continue to grow at a steady rate—the Congressional Budget Office estimates that 47% of Medicare beneficiaries will be in an MA plan by 2029—the findings mean that it’s crucial to continue innovating traditional Medicare as well, the researchers said.
“While Medicare Advantage enrollment among new beneficiaries is rising, these findings suggest that ongoing attention to traditional Medicare is needed to meet the needs of the lion’s share of the Medicare population,” the researchers wrote.
Roche’s Spark buy hits another hurdle as U.S., U.K. antitrust regulators pile on
Roche’s hope of closing its $4.3 billion acquisition of Spark Therapeutics this quarter looks far-fetched now, as the deal has drawn closer scrutiny from antitrust watchdogs in the U.S. and U.K.
Roche and Spark both received a “second request” for additional information and documents from the U.S. Federal Trade Commission (FTC), the two companies said Monday. At the same time, the U.K. Competition and Markets Authority (CMA) has opened its own investigation.
Because of the FTC delay, Roche extended its tender offer deadline from June 14 to July 31, though all deal terms remain unchanged, the Swiss drugmaker said.
The delay marks the fourth setback for the star-crossed merger. On May 23, Roche confirmed to FiercePharma that it had refiled its premerger forms with the FTC, as planned when it unveiled the third postponement. That FTC submission came with a waiting period that ended last Friday before the two parties could close their transaction.
But according to the FTC’s own explanation, “if the initial review has raised competition issues,” it may ask for what’s known as a “second request.” And that’s exactly what the agency did. Once the two companies have complied with the request, the FTC has 10 days to complete its review.
The repeated delays have puzzled some industry watchers, because there are no obvious anti-competitive concerns. Roche is making a bid for Spark to establish a foothold in the hot and new gene therapy arena and to beef up its hemophilia franchise.
“[W]e think the hemophilia gene therapy market is probably the most competitive and ‘crowded’ field in gene therapy and don’t see how this could be a concern,” Jefferies analyst Michael Yee argued in a Monday memo to investors, drawing comparisons to the hepatitis C market where several players and drug updates have pushed down prices significantly over time.
And among the gene therapy players in hemophilia, Spark isn’t even in the lead. BioMarin is ahead with valoctocogene roxaparvovec in phase 3 hemophilia A development. And Spark’s SPK-8011 “is still quite risky as the new phase 2 data hasn’t even been reported or finished, and it’s on a small number of patients,” Yee said.
Besides, the mechanism of action of gene therapy differs from Roche’s existing antibody drug Hemlibra.
Some investors have pointed to potential competitive concerns about treatments for hemophilia A patients with factor VIII inhibitors, Yee said. According to Roche management on the company’s first-quarter earnings call, Hemlibra had already “highly penetrated” the inhibitor population by the end of last year’s third quarter.
Spark has an early-stage program for inhibitor patients, and perhaps the FTC sees this field as a unique population, competitively speaking, Yee said. But again, BioMarin also boasts a similar pipeline, and neither Spark nor BioMarin have even treated patients yet, Yee noted.
Despite the previous three delays, Roche has repeatedly said it expected to wrap up the deal in the second quarter. But with the new FTC demand, “it is unlikely that the transaction will close during the first half of 2019,” a Roche spokesman said in a statement to FiercePharma on Monday, adding that the company’s now expecting the deal to close within the year. “The delay has no impact on our financial outlook for the year 2019,” he said.
According to Roche, the previous delays were all meant to allow U.S. regulators more time for their review, but there’s one more wrinkle this time around.
U.K. regulators opened a separate probe to determine whether the CMA has jurisdiction over the acquisition. If so, the agency may open another review to evaluate whether the merger would hurt competition in the U.K.
“Pending the outcome of its investigation, the CMA has issued an Interim Enforcement Order that would become effective upon closing of the transaction and would require Roche to hold separate the Spark business,” Roche said.
If so, Roche wouldn’t be able to integrate the gene therapy specialist—and that’s not much of a problem, because the companies said at the outset that Spark would continue operating in Philadelphia as “an independent company” within Roche.
Even though both companies’ boards unanimously backed the deal, Spark’s investors don’t seem so excited. As of last Friday, only 21.1% of Spark’s outstanding shares had been tendered, only slightly higher than the 21% reported about a month ago.
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