AbbVie Inc. (NYSE:ABBV) will acquire Stemcentrx Inc. (South San Francisco, Calif.) for about $5.8 billion in upfront cash and stock. The deal gives AbbVie Rova-T rovalpituzumab tesirine, which is in the registrational Phase II TRINITY trial as a third-line therapy for small cell lung cancer (SCLC). AbbVie expects enrollment in the study to be complete by YE16, and hopes Rova-T can reach the market by 2018.
Stemcentrx shareholders are eligible for an additional $4 billion in milestones. AbbVie said the company was valued at $5 billion at the time of its last private round.
Data presented last September showed the antibody-drug conjugate (ADC) targeting delta-like protein 3 (DLL3) led to an overall response rate of 44% among 16 SCLC patients expressing a DLL3 biomarker in a Phase I/II trial in relapsed SCLC (see BioCentury Extra, Sept. 9, 2015).
Overall survival (OS) data from the study are to be presented in June at the American Society of Clinical Oncology (ASCO) meeting. According to AbbVie, the DLL3 biomarker is expressed in more than 80% of SCLC tumors and is not present in healthy tissue.
AbbVie expects to start a registrational study in 1H17 of Rova-T as a first-line therapy for SCLC. It said an eight-arm Phase I/II trial of the compound as a monotherapy for several cancers is to begin this quarter.
AbbVie believes Rova-T could deliver $5 billion in peak-year revenues. Its oncology pipeline also includes veliparib (ABT-888), a poly(ADP-ribose) polymerase (PARP) inhibitor in Phase III testing for breast and ovarian cancer. AbbVie shares rights to three marketed blood cancer drugs: Imbruvica ibrutinib with Johnson & Johnson (NYSE:JNJ), Empliciti elotuzumab with Bristol-Myers Squibb Co. (NYSE:BMS) and Venclexta venetoclax with Roche (SIX:ROG; OTCQX:RHHBY).
Stemcentrx has four other clinical-stage compounds with undisclosed targets, all in Phase I to treat solid tumors, and a technology platform that AbbVie said uses stem cell biology to identify and screen targets against live tumor tissue.
Both companies' boards have approved the deal, which is expected to close this quarter. AbbVie said it expects the deal to be about $0.20 dilutive to EPS in 2016, and to become accretive in 2020.
AbbVie added $0.50 to $61.20 on Thursday. The company also reported 1Q16 earnings that were roughly in line with consensus estimates. Revenues were $5.96 billion, compared to the $5.97 billion Street estimate. Adjusted diluted EPS were $1.15, two pennies above the $1.13 Street estimate.
The acquisition of Stemcentrx boosted the value of fellow cancer stem cell company OncoMed Pharmaceuticals Inc. (NASDAQ:OMED), which gained $1.83 (16%) to $13.57 on Thursday.
Sanofi (Euronext:SAN; NYSE:SNY) said it made a non-binding offer to acquire Medivation Inc. (NASDAQ:MDVN) for $52.50 per share in cash, or about $9.3 billion. The price is a 40% premium to Medivation's close of $37.39 on March 30, before rumors surfaced that it had hired JPMorgan to fend off unsolicited takeover offers.
In a letter to Medivation President and CEO David Hung released Thursday by Sanofi, CEO Olivier Brandicourt said Sanofi made the formal offer in an April 15 letter, but Medivation has not responded except to acknowledge its receipt.
The offer is shy of Medivation's March 2015 all-time intraday high of $70.79, adjusted for splits. The company's shares have slid in recent months as part of a larger biotech sell-off and concerns about drug pricing.
Medivation and Astellas Pharma Inc. (Tokyo:4503) share rights to prostate cancer drug Xtandi enzalutamide, which had worldwide net 2015 sales of $1.9 billion. Last month, a group of legislators asked NIH to hold a public meeting to discuss whether it should exercise march-in rights for Xtandi after patient groups said its price was a barrier to use (see BioCentury Extra, March 28).
Xtandi would complement Sanofi's marketed prostate cancer drugs, which include taxane derivative Jevtana cabazitaxel and Eligard leuprolide, a luteinizing hormone-releasing hormone (LHRH) receptor agonist.
Behind Xtandi, Medivation's next most advanced compound is talazoparib (MDV3800), a poly(ADP-ribose) polymerase (PARP) inhibitor in Phase III for breast cancer.
In Thursday's letter, Brandicourt said Sanofi first approached Medivation about a deal more than a month ago, but Medivation and its board had no interest in discussing a deal. Sanofi then outlined its terms in the April 15 letter.
"We do not understand the delay in responding to our letter," wrote Brandicourt. "The price we put forth represents a very substantial premium, and it would be all cash without any financing condition. In these circumstances we believe it is appropriate to make this letter public."
Sanofi said the deal would be accretive to its earnings immediately.
Medivation said its board expects to complete a review of Sanofi's offer at a scheduled meeting on Thursday and "will provide an update promptly thereafter." The company's financial advisors are Evercore and JPMorgan.
Medivation rose $4.12 to $56.17 on Thursday.
In a blog post, Express Scripts Holding Co. (NASDAQ:ESRX) CMO Steven Miller outlined three new efforts to help control drug costs, including treatments for diabetes and inflammatory/autoimmune diseases. The PBM is discussing the programs with clients this week at its annual Outcomes Symposium.
Under its Diabetes Care Value program, Miller said Express Scripts would partner with "preferred" retail pharmacies "that are committed to delivering high levels of care to patients with diabetes and have demonstrated a history of achieving specific quality metrics, such as improved adherence rates and A1C levels."
The program also will use Wi-Fi-enabled glucose meters and remote monitoring to help physicians and patients track and improve outcomes. Express Scripts has a similar care value program for hypercholesterolemia through its Accredo specialty pharmacy.
Spokesperson David Whitrap said the program is intended to drive down pricing of insulin products and will include a cap on future diabetes medication costs for participating plans.
Express Scripts will expand its indication-based pricing model to inflammatory diseases from cancer. Express Scripts will divide diseases into four separate indications, allowing products approved for only one or two indications to be on a "more equal playing field with products that are indicated across all various inflammatory diseases" and will allow the PBM to achieve "more head-to-head price competition among clinically equivalent medications," Miller wrote. He did not name the indications.
Last month, Express Scripts launched an indication-based pricing model for select cancer drugs. Although the company has not publicly disclosed the drugs in the program, Whitrap said clients and patients are aware of them. The program has enrolled 15 million lives.
Finally, to control drug price increases, Express Scripts announced its Market Events program. The PBM will use its MediCube data analysis tool to identify new price increases quickly and "expedite the process it takes to identify, issue and recommend an alternative solution to our clients."
In March, Express Scripts told BioCentury that it either negotiates inflation caps as part of its contract for branded drugs, or guarantees a rate to plan sponsors based on a prediction using internal data for a given drug or drug class. It relies on prior authorization, step therapy and tiering to control its costs for the latter group of drugs (see BioCentury, March 28).
Whitrap told BioCentury that the new Market Events program would focus on older drugs that "should be inexpensive but, overnight, experience skyrocketing prices."
On Thursday, Amgen Inc. (NASDAQ:AMGN) reported 1Q16 financial results that beat estimates and raised its 2016 EPS and revenue guidances yet again. Revenues in the quarter were $5.5 billion, up from $5 billion in 1Q15 and beating the $5.3 billion analysts were expecting. Adjusted diluted EPS were $2.90, up from $2.48 in 1Q15 and topping the Street's $2.60 estimate.
Worldwide sales of PCSK9 inhibitor Repatha evolocumab were $16 million in 1Q16, with $14 million coming from the U.S. Amgen has not previously broken out its sales of the drug, which it launched in early September in the U.S. and Europe.
Amgen reported $27 million in worldwide sales of leukemia drug Blincyto blinatumomab, up from $15 million in 1Q15. The bispecific T cell engager (BiTE) that binds to CD19 expressed on B cells and CD3 expressed on T cells has accelerated approval from FDA and conditional approval from the European Commission. In February, an interim analysis showed Blincyto met the primary overall survival (OS) endpoint in a Phase III trial (see BioCentury Extra, Feb. 5).
Amgen said it now expects adjusted diluted EPS of $10.85-$11.20 on revenues of $22.2-$22.6 billion in FY16. In January, it raised its guidance to EPS of $10.60-$11 on $22-$22.5 billion in revenues. It attributed the January change to revised timing of biosimilar competition and the inclusion of the R&D tax credit (see BioCentury Extra, Jan. 28).
Amgen was off $0.44 to $160.56 on Thursday. The company released its financial results after market close, and gained $0.44 to $161 in early after-hours trading.
United Therapeutics Corp. (NASDAQ:UTHR) lost $12.84 (11%) to $104.84 on Thursday after reporting 1Q16 earnings that missed consensus estimates and announcing the departure of two of its top executives.
The company reported non-GAAP EPS of $3.02 on revenues of $369 million in 1Q16. The figures were up from EPS of $2.55 on $327.5 million in 1Q15 revenues, but short of analysts' consensus estimates of EPS of $3.21 on revenues of $397.4 million.
Also, United Therapeutics said co-CEO Roger Jeffs and EVP and COO David Zaccardelli will step down, effective June 26. Jeffs, a board member, will not seek re-election.
Chairman and Co-CEO Martine Rothblatt will become the company's sole CEO. United Therapeutics also promoted EVP of Organizational Development Michael Benkowitz to president and COO.
Celgene Corp. (NASDAQ:CELG) reported 1Q16 financial results on Thursday and, as expected, lowered its 2017 financial guidance due to changing foreign exchange rates. The company had signaled in January that it planned to adjust the guidance (see BioCentury Extra, Jan. 28).
Celgene said it now expects 2017 net product sales of $12.7-$13 billion and adjusted diluted EPS of $6.75-$7. The company had previously guided to net product sales of $13-$14 billion and EPS of $7.25.
In 1Q16, Celgene's revenues were $2.51 billion, up 21% from $2.08 billion in 1Q15 but slightly below the $2.58 billion consensus estimate. Adjusted diluted EPS in the quarter were $1.32, up from $1.07 in 1Q15 and beating the Street's expectation of $1.28.
Celgene raised the lower end of its 2016 guidance for net product sales and adjusted diluted EPS. It now expects adjusted diluted EPS of $5.60-$5.70 on net product sales of $10.75-$11 billion. In January, Celgene guided to an EPS of $5.50-$5.70 on sales of $10.5-$11 billion.
The company reiterated long-term guidance of 2020 EPS of more than $13 on sales exceeding $21 billion.
Celgene picked up $1.88 to $108.03 on Thursday.
Novo Nordisk A/S (CSE:NVO; NYSE:NVO) said subcutaneous semaglutide (NN9535) significantly reduced cardiovascular risk vs. placebo in the Phase IIIa SUSTAIN 6 trial to treat Type II diabetes. It also met the study's primary endpoint of non-inferiority to placebo at reducing risk of major adverse cardiovascular events. Novo expects to submit regulatory applications for the candidate in the U.S. and EU in 4Q16.
The 3,300-patient, 104-week trial studied once weekly 0.5 mg or 1 mg semaglutide or placebo in addition to standard of care. The study's composite primary endpoint included first occurrence of cardiovascular death, non-fatal myocardial infarction or non-fatal stroke.
Novo said semaglutide's safety profile was consistent with previous studies.
SUSTAIN 6 is the last study of the Phase III SUSTAIN program. The long-acting glucagon-like peptide (GLP-1) analog has met the primary endpoint in all six trials (see BioCentury Extra, Feb. 23).
Novo gained DKK8.10 to DKK371 in Copenhagen and rose $0.81 to $56.04 in New York.
Contract manufacturer Samsung BioLogics (Seoul, South Korea) is planning to list shares in South Korea this year. The company plans to select lead managers next month before deciding on the number of shares and timing.
Samsung BioLogics is a JV formed in 2011 by Samsung Group (Seoul, South Korea) and CRO Quintiles Transnational Holdings Inc. (NYSE:Q) to give Samsung access to manufacturing capabilities.
In 4Q18, Samsung BioLogics expects to begin operating its third manufacturing facility, which has 180,000 liters of capacity. The company said it would then be the world's largest contract manufacturer for biologics, as measured by production capacity.
Gilead Sciences Inc. (NASDAQ:GILD) slipped $5.35 to $91.65 in early after-hours trading Thursday after it reported 1Q16 earnings that missed analysts' estimates, in part due to lower than expected revenue from HCV drug Harvoni ledipasvir/sofosbuvir as payer discounts have begun to blunt the drug's sales.
U.S. Harvoni sales sank 53% to $1.4 billion from $3 billion in 1Q15 and missed a consensus estimate of $1.9 billion. Global sales of the drug slipped 19% to $3 billion from $3.6 billion in 1Q15, and were short of the $3.3 billion consensus. The decline was partially offset by stronger sales of HCV drug Sovaldi sofosbuvir, whose global sales rose 31% to $1.3 billion but missed a $1.4 billion consensus estimate.
Japanese 1Q16 sales of Harvoni and Sovaldi were $887 million and $202 million, respectively. Gilead launched both drugs last year. Price cuts for the treatments went into effect April 1 (see BioCentury Extra, March 9).
On a conference call Thursday, EVP of Commercial Operations Paul Carter attributed the decline in HCV revenue to factors including higher discounts and shorter treatment durations. Carter said several payers began providing the drugs to HCV patients regardless of fibrosis score, triggering previously negotiated discounts.
Overall, Gilead reported non-GAAP diluted EPS of $3.03 in 1Q16, up from $2.94 in 1Q15 but short of the $3.15 consensus. Revenues were $7.8 billion, up 3% from $7.6 billion in 1Q15 but missing a consensus estimate of $8.1 billion. The company reiterated existing 2016 guidance of non-GAAP diluted EPS of $1.10-$1.16 on $30-$31 billion in net product sales. It had $21.3 billion in cash at March 31.
Gilead shed $3.72 to $97.00 on Thursday. It released its earnings after market close.
Republicans and Democrats on the U.S. Senate Finance Committee sent acting CMS Administrator Andy Slavitt separate letters Thursday expressing concerns about the agency's planned overhaul of reimbursement for drugs administered under Medicare Part B. The letters, which reflect the views of oncologists and drug companies, are a strong rebuke for Slavitt and the proposed reimbursement policies.
As BioCentury reported Wednesday, the Republican letter calls for the withdrawal of CMS's proposed Part B reimbursement model. The letter is signed by committee Chairman Orrin Hatch (R-Utah) and all of the committee's Republicans (see BioCentury Extra, April 27).
The Democratic letter expresses the same concerns, but rather than demand withdrawal, it asks Slavitt to resolve the concerns prior to implementing the proposed rule. The letter was signed by Ron Wyden (D-Ore.), the Finance Committee's ranking member, and all of the committee's Democrats.