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2015 Annual Report: Top 100 Biotechnology Companies – The Acquisition Game

Written by: | andrew.humphreys@medadnews.com | Dated: Thursday, June 4th, 2015

 

M&A activity throughout the industry is helping the biotechnology world soar to new heights.

 

 

The U.S. biotechnology arena is undergoing a record-breaking M&A cycle for the industry. After generating M&A activity valued at $235 billion during 2014, the U.S. biotech sector produced more than $100 billion in deals during first-quarter 2015. Industry analysts note that most M&A cycles last between three to five years. With 2014 being the first year in the newest cycle, the biotech industry is anticipated to continue wheeling and dealing at record levels, with some analysts firms projecting a growth rate of about 20 percent for the next two years.

Since the last time this annual report was published by Med Ad News two years ago, 14 of the top 100 revenue-generating biotech entities from that listing have been acquired, including former top 20 members Elan Corp. (purchased by Perrigo Co.) and Cubist Pharmaceuticals Inc. (bought by Merck & Co.)

Another former top 100 company acquired since 2013 was InterMune Inc. by the world’s largest biotechnology company, Roche. The Swiss pharma giant spent about $8.3 billion on the August 2014 acquisition despite the California biotech firm’s leading drug prospect having not yet produced any revenue at that point in time. But three months later, InterMune’s Esbriet (pirfenidone) was FDA-approved for treating idiopathic pulmonary fibrosis. Patients with IPF gradually lose the ability to breath as fibers fill up their lungs.

Another biotech acquisition by Roche during the past year was that of Trophos in January 2015 for up to EUR 470 million. A privately held biotech company based in Marseille, France, Trophos’ proprietary screening platform generated olesoxime (product code TRO19622), which is being developed for spinal muscular atrophy. SMA is a rare and debilitating genetic neuromuscular disease most commonly diagnosed in children. Pivotal Phase II results with olesoxime in SMA demonstrated a beneficial effect on the maintenance of neuromuscular function in individuals with Type II and non-ambulatory Type III SMA, as well as a reduction in medical complications associated with the disease.

The investigational medicine olesoxime is designed to protect the health of motor nerve cells. Olesoxime has been granted Orphan Medicinal Product designation for treating SMA by the European Medicines Agency and Orphan Drug Designation by FDA.

Roche announced in December 2014 a deal to acquire Dutalys GmbH, a privately held biotech company with headquarters in Vienna, Austria. Dutalys is dedicated to the discovery and development of fully human, bi-specific antibodies based on their proprietary DutaMab technology. The bi-specific antibodies developed with this platform are designed to provide novel, best-in-class molecules for several therapeutic fields. This transaction further highlights Roche’s leadership in developing therapeutic antibodies.

A conventional bi-specific monoclonal antibody is a biotechnologically engineered artificial protein consisting of fragments of two different monoclonal antibodies and consequently can bind to two different antigens. The DutaMab technology platform varies by allowing for the development of fully human bi-specific antibodies where each arm of the antibody demonstrates high affinity and simultaneous binding against both targets, excellent stability, and good manufacturing properties. This process enables the treatment of disease mechanisms that could not be addressed with conventional bi-specific antibodies.

Another private company acquisition by Roche during 2014 was that of Santaris Pharma in August. The Copenhagen, Denmark-based biopharmaceutical company pioneered its proprietary Locked Nucleic Acid (LNA) platform that has contributed to an emerging era of RNA-targeting therapeutics. This new class of medicines has the potential to address hard-to-treat diseases in various therapeutic fields.

Santaris’ LNA platform and drug discovery engine unites the company’s proprietary LNA chemistry with its highly specialized and targeted drug discovery capabilities to rapidly deliver drug candidates against mRNA and microRNA. As a result, scientists are able to develop drug candidates for diseases that are difficult, or impossible, to target with contemporary drug platforms including antibodies and small molecules. The LNA platform is designed to overcome the limitations of earlier antisense and siRNA technologies, in particular via a unique combination of small size, high binding affinity and metabolic stability that enables this new class of drug candidates to potently and specifically influence RNA targets in many different tissues without the necessity for complex delivery vehicles. LNA is additionally referred to as BNA (bicyclic or bridged nucleic acid).

Roche Group member Genentech Inc. during July 2014 entered into a definitive pact to acquire Seragon Pharmaceuticals Inc. Through the acquisition of the privately held San Diego-based biotech company, Genentech obtained rights to Seragon’s entire portfolio of investigational next-generation oral selective estrogen receptor degraders (SERDs), for the potential treatment of hormone receptor-positive breast cancer.

Seragon scientists developed next-generation SERDs that are designed to block estradiol action at the estrogen receptor and eliminate the estrogen receptor from the cell altogether. SERDs are believed to alter the shape of the estrogen receptor in a manner that targets it for elimination by the cell. These next-generation dual-acting SERDs potentially offer an improved approach to treating hormone receptor-positive breast cancer, and possibly other cancers driven by the estrogen receptor.

Another biotech leader, Gilead Sciences Inc., has been an active M&A player in 2015. In May, Gilead inked a deal to acquire EpiTherapeutics ApS. The privately held Danish company was purchased for $65 million, subject to certain purchase price adjustments, to be financed through available cash on hand.

EpiTherapeutics has produced a library of first-in-class, selective small molecule inhibitors of epigenetic regulation of gene transcription, in particular histone demethylases. The company’s lead pre-clinical compounds are being evaluated for treating certain cancers.

Gilead reached a deal with privately held biotechnology company Phenex Pharmaceuticals AG of Germany in January 2015. Gilead acquired Phenex’s Farnesoid X Receptor program consisting of small molecule FXR agonists for treating liver diseases such as nonalcoholic steatohepatitis (NASH). The deal is potentially valued up to $470 million.

NASH is a common, serious chronic liver disease characterized by inflammation and excessive fat accumulation in the liver that may result in progressive fibrosis, cirrhosis, and liver failure. NASH is estimated to affect up to 20 percent of people in the developed world. There are no approved therapies for treating treat NASH. FXR is a nuclear hormone receptor that regulates bile acid, lipid and glucose homeostasis, which can aid in the reduction of liver steatosis and inflammation, and may assist in preventing liver fibrosis.

Longtime biotech leader Amgen Inc. has been more quiet on the company acquisition front during the past two years, but its last one was a big deal. In August 2013, Amgen shelled out about $10.4 billion to land Onyx Pharmaceuticals Inc. The worldwide biopharma company Onyx based out of South San Francisco has been engaged in the development and commercialization of innovative therapies for improving the lives of cancer patients. With Onyx came the multiple myeloma franchise drug Kyprolis (carfilzomib), along with various oncology compounds undergoing clinical development. Onyx also had three partnered oncology assets: Nexavar (sorafenib) tablets with Bayer HealthCare Pharmaceuticals Inc., Stivarga (regorafenib) tablet with Bayer, and palbociclib with Pfizer Inc.

The No. 4 biotech revenue generator of 2014, Biogen Inc., during January 2015 agreed to acquire U.K.-based Convergence Pharmaceuticals. A clinical-stage biopharmaceutical company, Convergence possesses an innovative portfolio of ion channel-modulating product candidates for neuropathic pain. The lead drug candidate is CNV1014802, which is being developed in Phase II studies for trigeminal neuralgia (TGN).

CNV1014802 has shown clinical activity in proof of concept studies for TGN, a chronic orphan disease consisting of debilitating, episodic facial pain. The novel small molecule state-dependent sodium channel blocker preferentially inhibits Nav 1.7 ion channels. The Nav 1.7 ion channel is a genetically validated target for human pain. The drug compound has also demonstrated proof of concept for treating pain associated with lumbosacral radiculopathy, more commonly known as sciatica, and has possible applicability in several other neuropathic pain states.

Ranking fifth in 2014 biotech revenue, Celgene Corp. reach a deal in April 2015 to acquire Quanticel Pharmaceuticals Inc. Quanticel is a privately held biotech company concentrated on cancer drug discovery. Celgene gains full access to Quanticel’s proprietary platform for the single-cell genomic analysis of human cancer, as well as its lead programs that target specific epigenetic modifiers to advance Celgene’s pipeline of innovative cancer therapies.

The acquisition culminates a 2011 strategic alliance between the two companies. During the three-and-a-half year alliance, Quanticel industrialized its single-cell platform for analysis of tumor cellular content and applied it to novel target discovery and the generation of high-quality drug candidates. Multiple drug candidates from Quanticel are anticipated to reach the clinic during early 2016.

Celgene acquired a late-stage product from Nogra Pharma Ltd. of Dublin, Ireland, for Crohn’s disease and other gastrointestinal disorders during April 2014. Celgene inked a deal to develop and commercialize GED-0301, an oral antisense DNA oligonucleotide targeting Smad7 mRNA for treating moderate-to-severe Crohn’s disease and other indications. The first-in-class new drug candidate was on track to enter Phase III development for Crohn’s disease.

No. 6-ranked Shire plc acquired privately held Meritage Pharma Inc. during February 2015 for an up-front fee of $70 million and additional contingent payments based on the achievement of development and regulatory milestones. Shire acquired the worldwide rights to – and has undertaken the continued development of – Meritage’s Phase III-ready compound, Oral Budesonide Suspension, for treating adolescents and adults with eosinophilic esophagitis. EoE is a rare, chronic inflammatory gastrointestinal disease. The transaction further enhances Shire’s late-stage pipeline and builds upon its rare disease and GI commercial infrastructure and expertise.

OBS is a proprietary viscous oral form of budesonide designed to coat the esophagus where the drug can act locally. Budesonide is the active pharmaceutical ingredient in several FDA-approved products for treating asthma, allergic rhinitis, ulcerative colitis and Crohn’s disease. The corticosteroid budesonide has an established safety profile in those diseases. FDA granted orphan drug status designation to OBS for treating patients with EoE.

Shire gained the rights to acquire Meritage in connection with its completed acquisition of ViroPharma Inc. during 2014 for about $4.2 billion. Through the deal, Shire gained treatments for rare diseases, including Cinryze for the inflammatory condition hereditary angioedema.

Shire completed the acquisition of the rare disease-focused biopharma company NPS Pharmaceuticals Inc. during February 2015 for a total value of $5.2 billion. With this purchase, Shire is accelerating the growth of NPS Pharma’s innovative portfolio through its market expertise in GI disorders, core capabilities in rare disease patient management, and global footprint.

NPS’ first product, Gattex/Revestive (teduglutide [rDNA origin]) for injection, is approved in the United States and Europe for treating adults with short bowel syndrome who are dependent on parenteral support. NPS also brought with it Natpara/Natpar (rhPTH -83), for treating hypoparathyroidism. Natpara was FDA-approved during January 2015 an adjunct to calcium and vitamin D to control hypocalcemia in patients with hypoparathyroidism. Additionally, NPS was conducting a Phase IIa trial evaluating its lead pipeline candidate NPSP795 for treating adults with autosomal dominant hypocalcemia.

Despite all of the M&A activity, many leading biotech companies continue to rely on partnerships and collaborations to improve their long-term business prospects. In early June 2015, two of the top biotech forces announced terms of a collaboration. Amgen and Roche are conducting a Phase Ib study to evaluate the safety and efficacy of a combination drug for combating cancer. The combination – consisting of Amgen’s talimogene laherparepvec and Roche’s atezolizumab (also known as MPDL3280A) – is being studied in patients with triple-negative breast cancer and colorectal cancer with liver metastases.

The oncolytic immunotherapy talimogene laherparepvec is designed to selectively replicate in tumors (but not normal tissue) and to initiate an immune response to target cancer cells. The investigational monoclonal antibody atezolizumab is designed to interfere with the programmed death receptor (PD-L1) protein.

According to the two companies, the rationale for combining these two investigational agents is to activate an anti-tumor immune response with talimogene laherparepvec and to block inhibitory T cell checkpoints with atezolizumab, to potentially increase the anti-tumor activity relative to each agent alone.

Immunotherapy development heating up

Along with M&A, immunotherapy is as hot a topic as there is in the biotech world these days. Many of the top biotechnology companies are investigating new drug candidates in this area.

Derived from HSV-1, talimogene laherparepvec is being investigated as a cancer treatment. Amgen is conducting a comprehensive clinical development program for talimogene laherparepvec in metastatic melanoma, which includes combination studies with checkpoint inhibitors in patients with late-stage disease and monotherapy before surgery (neoadjuvant) in patients with resectable disease. Also, based on its clinical profile, the drug has the potential to be studied in various solid tumor types.

A biologics license application has been accepted for review by FDA as has a marketing authorization application in the European Union for talimogene laherparepvec for treating patients with regionally or distantly metastatic melanoma. FDA has set a review goal date under the Prescription Drug User Fee Act (PDUFA) of July 28, 2015. The regulatory submissions included data from more than 400 patients. The new drug filings are based on a worldwide, randomized, open-label Phase III study evaluating the safety and efficacy of intralesional talimogene laherparepvec in patients with stage IIIB, IIIC, or IV melanoma that are not surgically resectable compared to granulocyte-macrophage colony-stimulating factor (GM-CSF).

In December 2014, Amgen announced the start of a clinical trial of talimogene laherparepvec in combination with an investigational use of Merck’s FDA-approved, anti-PD-1 therapy Keytruda (pembrolizumab) in patients with regionally or distantly metastatic melanoma. The study is evaluating the combination of these two therapies in 110 patients across 35 clinical trial sites in the United States, Australia and Europe. This is the first study to evaluate an investigational combination of an oncolytic immunotherapy and an anti-PD-1 therapy.

Keytruda is indicated in the United States as an intravenous infusion for treating patients with unresectable or metastatic melanoma and disease progression following ipilimumab and, if BRAF V600 mutation positive, a BRAF inhibitor. The humanized monoclonal antibody blocks the interaction between PD-1 and the protein’s ligands, PD-L1 and PD-L2. By binding to the PD-1 receptor and blocking the interaction with the receptor ligands, the drug releases the PD-1 pathway-mediated inhibition of the immune response, including the anti-tumor immune response.

During May 2015, Roche revealed that a midstage trial of atezolizumab demonstrated that the experimental immunotherapy doubled the likelihood of survival for lung cancer patients with the highest levels of a specific biomarker. Unlike some of its rivals, Roche is using its own assay to measure patient levels of PD-L1 to identify people most likely to benefit from the treatment. Initial study results of 287 patients with previously treated non-small cell lung cancer demonstrated that atezolizumab reduced the risk of death by 53 percent in those with the highest levels of the biomarker, versus those treated with chemotherapy.

Atezolizumab is part of a new class designed to help the body’s immune system fend off cancer by blocking the PD-1 protein, or a related target known as PD-L1, used by tumors to evade the body’s defense system. The drug is projected to become a blockbuster brand down the road. Atezolizumab is already undergoing a reported 10 Phase III studies and 36 clinical trials overall.

At the 2015 American Society of Clinical Oncology (ASCO), Celldex Therapeutics Inc. revealed positive results from the company’s randomized, double-blind Phase II trial of Rintega (rindopepimut) in patients with EGFRvIII-positive, recurrent glioblastoma. The primary endpoint of the clinical trial, progression-free survival at six months (PFS6) was met. A clear advantage was shown across multiple, clinically important endpoints including overall survival, long-term progression-free survival, objective response rate and need for steroids.

As an investigational therapeutic vaccine, Rintega targets the tumor specific oncogene EGFRvIII, a functional and permanently activated variant of the epidermal growth factor receptor. EGFR is a protein that has been well validated as a target for cancer therapy. Expression of EGFRvIII correlates with increased tumorigenicity in mouse models and poor long-term survival in clinical trials of patients with glioblastoma (GBM). Also, EGFRvIII-positive cells are thought to stimulate proliferation of non-EGFRvIII cells via IL-6 cell-to-cell signaling and to release microvesicles containing EGFRvIII, which can merge with neighboring cells, transferring tumor-promoting activity. EGFRvIII expression may additionally be associated with tumor stem cells that have been identified in GBM. These stem cells aid in the resistance of cytotoxic therapy and tumor recurrence. EGFRvIII is expressed in tumors in roughly 30 percent of patients with glioblastoma. It has not been detected at a significant level in normal tissues; therefore, targeting of this tumor-specific molecule is not believed to impact healthy tissues.

Three Phase II studies of Rintega – ACTIVATE, ACT II, and ACT III – have been performed in newly diagnosed EGFRvIII-positive GBM and have demonstrated consistent improvements in overall survival and progression-free survival versus matched historical controls. The vaccine is being evaluated in two studies in EGFRvIII-positive GBM – an international Phase III trial called ACT IV in newly diagnosed GBM and a Phase II trial called ReACT in recurrent GBM. During February 2015, the U.S. regulatory agency granted Rintega Breakthrough Therapy Designation for treating adult patients with EGFRvIII-positive GBM.

According to reports from ASCO, in a Phase II study combining Rintega with Roche/Genentech’s blockbuster cancer drug Avastin, 45 percent of patients were alive after 12 months of treatment versus 31 percent in the Avastin-only arm. The Rintega group registered a median overall survival rate of 11.6 months versus 9.3 months in the control setting.

“This is the first data we know of that showed a statistically significant benefit in the survival setting,” according to Celldex CEO Anthony Marucci, an accomplishment that Avastin was unable to produce. Additionally, 17 percent of patients were able to remain off of steroids for more than one year, underlining another notable potential benefit for patients as well as for Celldex. With these positive results, analysts’ projected potential annual peak sales of more than $1 billion for Rintega remain a solid possibility.

Other ASCO 2015 Highlights

Top 100 company CTI BioPharma Corp. (ranked No. 59 in this special report based on 2014 revenue) and partner Baxter International Inc.’s Bioscience business showcased positive Phase III data for their myelofibrosis drug pacritinib as ASCO 2015 in Chicago. The clinical trial showed improvement in key disease measurements and disease-related symptoms with pacritinib treatment versus best-available therapy, regardless of platelet levels at the time of enrollment. Data presented at ASCO (Abstract #LBA7006) demonstrate that compared to best-available therapy (exclusive of a JAK inhibitor), pacritinib therapy lead to a significantly higher proportion of patients with spleen volume reduction and control of disease-related symptoms. Additionally, treatment resulted in improvements in severe thrombocytopenia and severe anemia, eliminating the necessity for blood transfusions in one-fourth of patients who were transfusion dependent upon enrollment.

The investigational oral multikinase inhibitor pacritinib has specificity for JAK2 and FLT3. The JAK family of enzymes is a central component in signal transduction pathways, which are crucial to normal blood cell growth and development, as well as inflammatory cytokine expression and immune responses. Mutations in these kinases have been demonstrated to be directly related to the development of various blood-related cancers, including myeloproliferative neoplasms, leukemia and lymphoma. The kinase profile of pacritinib suggests the drug’s potential therapeutic use in conditions including acute myeloid leukemia, myelodysplastic syndrome, chronic myelomonocytic leukemia, and chronic lymphocytic leukemia due to its potent inhibition of c-fms, IRAK1, JAK2, and FLT3.1

The positive developments of pacritinib may help the drug reach the marketplace in 2016 and compete against Jakafi (ruxolitinib). Incyte Corp.’s Jakafi was the first FDA-approved treatment for patients with intermediate or high-risk myelofibrosis. Incyte ranks No. 23 on Med Ad News’ Top 100 biotech company list in this special report. Ruxolitinib is marketed by Novartis as Jakavi outside the United States.

Clovis Oncology Inc., coming in at No. 98 on Med Ad News’ Top 100 biotech entity listing, has a couple of cancer drugs performing well in clinical trials as showcased at ASCO in late May. Clovis’ investigational oral, potent, small molecule inhibitor of PARP1 and PARP2 rucaparib is being developed for treating advanced ovarian cancer, specifically in patients with BRCA mutations and other DNA repair deficiencies beyond BRCA, commonly referred to as “BRCA-like.” Data from ARIEL2 in platinum-sensitive BRCA-mutant patients showed an overall response rate of 82 percent, a disease control rate of 94 percent and a median progression-free survival of 9.4 months. Rucaparib is the only PARP inhibitor to be granted Breakthrough Therapy designation by U.S. regulators.

“With these data presented at ASCO, we believe rucaparib has clearly emerged as a unique and best-in-class PARP inhibitor,” remarked Patrick J. Mahaffy, president and CEO of Clovis. “In addition, with our now clinically proven BRCA-like clinical assay, we have validated our commitment to develop rucaparib not only for the 25 percent of women with germline and somatic BRCA mutations, but for the additional approximately 35 percent of women with the prospectively identified BRCA-like signature. With the ARIEL2 extension enrolling rapidly, we look forward to submitting our NDA for rucaparib for the treatment of advanced ovarian cancer next year.”

Clovis’ other shining star at ASCO 2015 was rociletinib (product code CO-1686). The novel, oral, targeted covalent (irreversible) mutant-selective inhibitor of EGFR is intended for treating non-small cell lung cancer in patients with initial activating EGFR mutations, as well as the dominant resistance mutation T790M. The drug prospect demonstrated a sixty percent overall response rate and 90 percent disease control rate in heavily pretreated centrally confirmed tissue T790M-positive patients. A median progression free survival of 10.3 months was observed in patients without a history of CNS metastases; a median PFS of 8 months was observed in the overall population of 270 heavily pretreated centrally confirmed tissue T790M-positive patients, including 40 percent of patients with a history of CNS metastases. Breakthrough Therapy designation has been granted by FDA; U.S. and E.U. regulatory submissions are anticipated to be completed during July 2015.

“To show responses and durability of this magnitude in a very advanced U.S. patient population, of whom nearly half have a history of CNS metastases, is extremely encouraging,” Mr. Mahaffy stated. “These maturing data confirm rociletinib’s compelling activity in patients with the most advanced stage of mutant EGFR NSCLC and form the basis, along with additional data from TIGER-2, of our U.S. and E.U. regulatory filings beginning next month.”

No. 60-ranked ImmunoGen Inc. of Waltham, Mass., is developing an innovative new drug compound, a folate-receptor alpha (FRalpha)-targeting antibody-drug conjugate (ADC). Mirvetuximab soravtansine is the first ADC to this target to reach clinical testing. The drug consists of an FRalpha-binding antibody conjugated to DM4, which is a potent cancer-cell killing agent developed by ImmunoGen specifically for use in ADCs. The antibody serves to target the DM4 specifically to FRalpha-positive cancer cells, which the DM4 can then destroy.

FRalpha is highly expressed on many cases of epithelial ovarian cancer, and on other forms of solid tumors such as endometrial cancer and some non-small cell lung cancers. Mirvetuximab soravtansine is being evaluated for treating FRalpha-positive, platinum-resistant ovarian cancer and for FRalpha-positive relapsed/refractory endometrial cancer, with additional assessments anticipated.

At ASCO 2015, ImmunoGen revealed an objective response rate of 53 percent – as a single agent – in patients with folate-receptor alpha-positive platinum-resistant ovarian cancer. The reported results are from a continuing Phase I study. Once the recommended Phase II dose (RP2D) of mirvetuximab soravtansine was established during dose finding (abstract #5558), an expansion cohort was opened to assess the safety and activity of this ADC particularly in treating patients with FRalpha-positive platinum-resistant ovarian cancer. Eighty percent of screened patients have met the criteria for having FRalpha-positive disease.

“Based on these findings, we are implementing a development plan designed to advance mirvetuximab soravtansine as quickly as possible while also recognizing the potential to benefit the greatest number of patients,” noted Dr. Charles Morris, executive VP and chief development officer of ImmunoGen. “We’re preparing to initiate a Phase II trial in late 2015 that will assess this ADC as a single-agent treatment for patients with FRalpha-positive platinum-resistant ovarian cancer. It is possible that this trial could be used for registration in this patient population.” medadnews

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