Unpartnered assets face waiting game

Analysis

The value of the top unpartnered assets has increased over the past year or so, but their developers might still be waiting some time before the bigger players show an interest. Both Intercept Pharmaceuticals' obeticholic acid and Puma Biotechnology's neratinib, which are top of the rankings, face questions about their safety (see table below). It will take new data results to allay these concerns, and these are some way away.

The NPVs of both drugs have jumped since EP Vantage last performed this analysis, in spite of a decline in the companies’ market caps – indicating that sellside enthusiasm for the products is perhaps overdone.

While Intercept and Puma are kicking their heels, there was good news for the creator of another previous entrant on this list, multiple sclerosis pill ozanimod: Celgene recently agreed to buy Receptos for $7.2bn (Celgene strikes again with Receptos acquisition, July 15, 2015).

Most valuable unpartnered assets by consensus NPV
Project Company Status NPV ($bn) Market cap ($bn)
Obeticholic acid Intercept Pharmaceuticals Filed 9.80 5.18
Neratinib Puma Biotechnology Phase III 6.87 2.88
Fovista Ophthotech Phase III 3.40 1.77
Nuplazid Acadia Pharmaceuticals Phase III 2.80 3.83
Ganetespib Synta Pharmaceuticals Phase III 2.53 0.29
KTE-C19 Kite Pharma Phase II 2.13 2.63
Patisiran Alnylam Pharmaceuticals Phase III 1.98 8.89
Rociletinib Clovis Oncology Phase III 1.96 2.95
Ad-RTS-hIL-12 Ziopharm Oncology Phase II 1.96 1.34
Algenpantucel-L NewLink Genetics Phase III 1.89 1.36

Intercept looks to 2018

Intercept recently filed obeticholic acid (OCA) in the US and EU for primary biliary cirrhosis, but it is non-alcoholic steatohepatitis (NASH) where the bigger opportunity lies. The company’s stock rocketed in January 2014 on impressive interim results from the phase II Flint study, but had a reality check later that year when the full data failed to clear up a link with increased LDL cholesterol (Full Flint data make Intercept look normal, November 10, 2014).

In spite of this, there is still interest in the space, particularly as obesity rates rise. Early this year Gilead Sciences signed up Phenex Pharmaceuticals’ rival farnesoid X receptor agent Px-104 (Gilead puts small deposit down to snare NASH properties, January 07, 2015).

For now, OCA’s valuation looks a little rich, even for Gilead. This could change with the readout from its 2,500-patient pivotal NASH study, Regenerate – but this is not expected until late 2018.

Puma’s bad run

Puma’s breast cancer candidate neratinib, meanwhile, has been on a downward spiral since Asco when the phase III ExteNET trial came in well below expectations. Particularly worrying was the high rate of grade 3 diarrhoea (Asco – Puma might have to rely on extended follow-up, June 02, 2015).

These concerns helped wipe $5.4bn off Puma’s market cap since the last analysis – but neratinib’s NPV has risen by $2.1bn. Analysts remain bullish about the drug’s prospects, with some saying that upcoming results from subsequent studies, which allowed the use of anti-diarrhoeal medication, should address the issue.

The good news for Puma is that these data should be available in Q3, with longer-term follow-up from ExteNET expected at the San Antonio Breast Cancer Symposium in December. The company is slated to file for approval of neratinib in early 2016.

Kite dips on death

Kite Pharma had a recent blip after a patient death in a phase I/II study of its CAR-T candidate KTE-C19 sent its share price down on Friday.

The company said that the death was unrelated to KTE-C19, adding that the study, in refractory aggressive non-Hodgkin’s lymphoma, was never placed on clinical hold and has continued to enrol and treat patients. Kite's stock rebounded and closed up 4% on Monday. But the development shows how a safety scare could scupper an unproven asset, even in the hot immuno-oncology space.

Among the remaining unpartnered assets, there are a few that have featured for some time: Synta’s cancer contender ganetespib, Acadia’s Parkinson’s disease psychosis candidate Nuplazid and NewLink Genetics’ cancer vaccine algenpantucel-L all made it into the previous analysis (Still unpartnered, but now worth a lot more, September 22, 2014).

These drugs are either risky or have been delayed, which helps explain why they are still on the shelf.

Menawhile, Alnylam’s lead project patisiran is already licensed to Sanofi outside the US and Western Europe, but its rare disease status means that Alnylam could go it alone in the bigger markets. However, it might not need to: positive phase III results with the RNAi therapeutic in transthyretin-mediated amyloidosis, due in early 2017, could spur further partnering interest.

Leerink analysts rate patisiran’s probability of success at 85% and peg its NPV at $2.6bn, higher than the EvaluatePharma consensus. Not bad for a drug class that was written off not so long ago.

But while the potential rewards are high, the problem for potential partners remains deciding when to invest. Talk of a biotech bubble means that these assets might be overvalued, but unless it bursts anytime soon, prices for the more promising candidates could rise even further.

To contact the writers of this story email Madeleine Armstrong or Edwin Elmhirst in London at news@epvantage.com or follow  @medtech_ma or@EPVantageon Twitter

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