Why dealmakers should look to Servier

Analysis

As a longstanding private business Servier keeps its cards close to its chest, but biotechs and investment bankers alike will take heart in its pursuit of an aggressive licensing strategy, of which today’s tie-up with Otsuka is just the latest example.

True, since the group has no access to capital via the public markets its war chest for deals is limited, and it probably cannot compete with the industry’s big hitters. But getting in early and carving out European rights has allowed Servier to snare a couple of the sector’s hottest assets (see table below).

These are the allogeneic CAR-T projects in development by Cellectis – one of the most interesting players in the red-hot T-cell therapy field – and more recently ex-US rights to Intarcia’s exenatide-secreting implant ITCA 650.

The expectations behind the Intarcia project are illustrated by the huge amount of cash the private company has attracted (Intarcia, the $5.5bn private company with a $15bn drug, April 29, 2015). Cellectis, meanwhile, completed a secondary float on Nasdaq this year, and under a separate alliance its CAR-T assets have the endorsement of none other than Pfizer.

Low key

Today’s tie-up with Otsuka is a bit more low key, concerning European rights to TAS-102, a colorectal cancer drug that was launched in Japan as Lonsurf a year ago; EvaluatePharma calculates sellside consensus forecasts of $434m in 2020 sales.

The deal is basically a bet on European approval; an EU regulatory filing has been made, and a decision is expected in early 2016. In the US, where Otsuka’s Taiho Pharmaceutical subsidiary retains rights, an FDA approval decision is due by December.

Given that Lonsurf is basically a middling cancer drug the deal terms seem relatively impressive. They include a $130m “up-front payment and for [EU regulatory] approval”, Servier said, though it would not split out how much of this was actually being paid out on signing and how much depended on a positive regulatory verdict.

In 2014 alone Servier struck five separate alliances to license in novel projects. Disclosed terms of these deals valued them at a combined $1.9bn in biodollars, including a $236m up-front outlay for the French group. The previous year Servier bought Hungary’s Egis for $483m.

Seriver's recent licensing deals
Deal Date Project Partner Indication summary Up-front ($m)* Deal value ($m)*
15 Jun 2015 TAS-102 (Lonsurf) Taiho (Otsuka) Colorectal cancer (filed) 130** 130
2 Dec 2014 GNbAC1 GeNeuro Multiple sclerosis (phase II) 47 455
11 Nov 2014 ITCA 650 Intarcia Therapeutics Diabetes, type 2 (phase III) 171 1,452
17 Sep 2014 Pixuvri CTI BioPharma Non-Hodgkin lymphoma (conditional approval) 18 134
24 Feb 2014 SERCA2b Small Molecule Program Celladon Diabetes, type 2 (preclinical)
17 Feb 2014 UCART19 Cellectis CLL, ALL (preclinical) 840
Source: EvaluatePharma; *where disclosed; **includes undisclosed amount contingent on EU approval.

If anything the recent tie-ups show Servier’s divergence away from its cardiovascular sweet spot and towards oncology – something also supported by the Otsuka deal.

TAS-102 is a combination of the antineoplastic nucleoside analogue trifluridine and tipiracil hydrochloride. Trifluridine interferes with DNA function, and its blood concentration is maintained thanks to tipiracil, an inhibitor of the trifluridine-degrading enzyme thymidine phosphorylase.

While in Japan it got the regulatory green light for treating unresectable advanced or recurrent colorectal cancer refractory to standard therapies on the basis of a phase II study, Western filings have a higher bar: the 800-patient, phase III Recourse trial.

Recourse met its primary endpoint, a statistically significant increase in median overall survival versus placebo, and at Asco a regional breakdown was presented showing that this was driven by US and European patients, who had 44% and 38% respective reductions in risk of death (p=0.0004 and <0.0001).

TAS-102 might not be about to become a blockbuster, but it seems destined for approval outside Japan, and if this is the case then smart dealmaking will have got Servier another niche asset. Deal bankers should rest assured that there will be more to come.

To contact the writer of this story email Jacob Plieth in London at jacobp@epvantage.com or follow @JacobPlieth on Twitter

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