The sector’s most valuable unpartnered assets – up for grabs or on the shelf?

Pharma companies have passed on in-licensing drugs such as Kite Pharma’s CAR-T therapy and Incyte’s IDO inhibitor. Do they know something?

Overlooked potential or left on the shelf? This is the question to ask when perusing the sector’s most valuable unpartnered R&D assets – according to sellside analysts – and the list below seems to contain projects that fit in both categories.

Topping the table are Kite Pharma’s CAR-T therapy and Incyte’s IDO inhibitor, while DBV’s peanut allergy vaccine and Karyopharm’s cancer treatment selinexor also rank in the top 15, according to EvaluatePharma. While it is hard to argue against the potential of these first two cases, opinions elsewhere are likely to be much more divided.

Equity analysts are not typically known for their prudence when valuing the R&D work of small drug developers. Thus the actual figures being pinned to these projects are arguably less important than the fact that they rank among the most highly valued – and presumably among the closely watched – by the sellside.

EvaluatePharma’s NPV is derived from a consensus of sales forecasts. The assets below remain wholly owned in major European and US markets.

On the shelf for a reason? The sellside's most valuable unpartnered R&D assets
Product Company Today's NPV ($bn) NPV as % of mkt cap Drug type/lead indication Status
Axicabtagene ciloleucel Kite Pharma 7.81 111% Anti-CD19 CAR T therapy; NHL Filed
Epacadostat Incyte 5.98 23% IDO 1 inhibitor; melanoma Phase III
AndexXa Portola Pharmaceuticals 2.88 91% Factor Xa inhibitor antidote Filed
Viaskin Peanut DBV Technologies 2.86 152% Peanut allergy vaccine Phase III
Intepirdine Axovant Sciences 2.64 97% 5-HT6 antagonist; Alzheimer's Phase III
AVXS-101 Avexis 2.48 84% SMA gene therapy Phase I
MPC-150-IM Mesoblast 2.44 422% Mesenchymal cell therapy; heart failure Phase III
LentiGlobin Bluebird Bio 2.28 52% Thalassaemia/sickle cell gene therapy Phase III
SAGE-547 Sage Therapeutics 2.08 66% GABA A modulator; depression, epilepsy Phase III
Selinexor Karyopharm Therapeutics 2.07 494% XPO/CRM 1 inhibitor; multiple myeloma, DLBCL Phase III
NEOD001 Prothena 1.98 89% Abeta MAb; amyloidosis Phase III
LN-144 Iovance Biotherapeutics 1.76 557% Tumour infiltrating lymphocyte infusion; melanoma Phase II
AR101 Aimmune Therapeutics 1.73 173% Peanut allergy vaccine Phase III
Tipifarnib Kura Oncology 1.65 937% Farnesyl transferase inhibitor; SCCHN Phase II
Larotrectinib Loxo Oncology 1.61 73% TRK inhibitor; solid tumors with NTRK-fusion proteins Phase II
Source: EvaluatePharma.

Kite and Incyte’s efforts are certainly among the most validated in this analysis. Axicabtagene ciloleucel is likely to receive approval in the coming weeks, while Incyte has extensive research collaborations in place with Merck & Co and Bristol-Myers Squibb over epacadostat.

While both of these assets are technically unpartnered, it seems unlikely that either company is actively seeking such a deal; at the right price, however, others would certainly be tempted by what they are offering. Indeed being in the market for a partner or buyer was not a prerequisite for this analysis, and a number of companies have said that they want to take these projects to market themselves, at least in the US.

However, for those developing assets that will be sold into large or highly competitive markets, a larger pair of hands is surely crucial if they are to succeed commercially. Examples include Axovant’s Alzheimer’s project intepirdine, Karyopharm’s selinexor, which is being tested in multiple myeloma and various lymphomas, or Iovance’s melanoma project LN-144. Notably, the NPVs of the last two assets are way higher than the market caps of their respective owners, suggesting that investors do not share the sellside’s optimism.

This disparity is also particularly evident with the US oncology group Kura and Australian biotech Mesoblast. Both have struggled to generate convincing clinical evidence for their lead candidates: the FDA refused to approve tipifarnib back in 2005 when it was owned by J&J, while Mesoblast has a failed partnership under its belt for its cell therapy (The Mesoblast dream is over, 14 June 2016).

Elsewhere, Avexis stands out, considering that its gene therapy asset has not yet progressed beyond phase I – encouraging early data notwithstanding (Biogen’s Spinraza dazzles but rivals rally, 26 April 2017).

Proof of concept

For many of these assets, potential partners would want to see much more convincing data, and possibly proof of regulatory or commercial potential, before considering taking them on.

Gene therapies are one example, as are neurology candidates like Sage’s SAGE-547, which sits in a field very prone to late-stage failure. It is also hard to predict great things for those that have appeared in previous years’ rankings – EP Vantage conducts this analysis every 12 months or so. Prothena’s amyloidosis project has ranked since 2014, for example, big pharma presumably overlooking its billion-dollar value for several years now.

This is not to say that this will not live up to hopes. Puma’s Nerlynx featured in this article for many years, as did Acadia’s Nuplazid, and these products have both reached the market and are forecast to generate strong sales. And, in 2011, an antiviral that went on to become Sovaldi, being developed by a small US biotech called Pharmasset, was identified as one to watch.

But previous years have also seen flops like Afrezza, Newlink Genetics’ cancer vaccine algenpantucel-L and Biosante’s Libigel. While the absence of a big partner is not necessarily a damning indictment, it would be wise to ask serious questions about these assets’ clinical and commercial promise. 

To contact the writer of this story email Amy Brown in London at [email protected] or follow @ByAmyBrown on Twitter

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