12:00 AM
Mar 09, 2015
 |  BioCentury  |  Strategy

Persevering with ProstVac

Why Bristol-Myers optioned Bavarian Nordic's ProstVac cancer vaccine

After more than 20 years in clinical development, including over six years in the hands of Bavarian Nordic A/S, ProstVac rilimogene galvacirepvec found a potential commercial partner in Bristol-Myers Squibb Co.

Whether BMS exercises its option, and how much of the potential $975 million in deal value Bavarian Nordic gets, depends on how much of a survival benefit the prostate cancer vaccine can show in Phase III testing. But the real upside could lie in combining ProstVac with the pharma's pipeline of checkpoint inhibitors.

Last week, Bavarian Nordic granted BMS an exclusive option to ProstVac for $60 million up front, with the biotech eligible for an $80 million option exercise fee, clinical milestones starting at $50 million and ranging to over $230 million, $110 million in regulatory milestones and $495 million in sales milestones, plus tiered double-digit royalties.

Including all the milestones, the deal would be the largest reported option agreement for a Phase III compound.

BMS can exercise its option following review of data from the Phase III PROSPECT trial of ProstVac with or without GM-CSF vs. placebo in 1,298 patients with asymptomatic or minimally symptomatic chemotherapy-naïve metastatic castration-resistant prostate cancer (CRPC).

The clinical milestones are triggered if the median OS benefit in PROSPECT exceeds the 8.5-month OS benefit seen in Phase II. Robert Ang, SVP of business development at Bavarian Nordic, said the milestones are not capped. In other words, the larger the median OS benefit compared with the Phase II result, the larger the payment.

The structure of the deal allows BMS to hedge against the all-too-common scenario that Phase III results are not as good as Phase II, while also allowing Bavarian Nordic to participate in the upside if the results are even better.

"We both recognized that the value for ProstVac increases based on the magnitude of efficacy seen in the Phase III trial," said Ang.

The stakes are perhaps higher in this case than in many, because ProstVac has not yet been tested against standard of care. At least seven new drugs have been approved to treat CRPC while ProstVac was in the clinic, including two approved in...

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