Bayer’s big ideas for star Loxo assets

Another impressive data presentation from Loxo Oncology helps explain why Bayer was prepared to pay so handsomely to get its hands on the US biotech’s TRK inhibition assets.

At a paediatric cancer conference this week Loxo confirmed a 93% overall response rate in 17 patients treated with larotrectinib, its lead project, and at a press conference last week Bayer executives described this activity as unprecedented in solid tumours. They also revealed that the Loxo deal had taken only a few months to execute – data presented at Asco in June were the trigger for talks to begin.

Given that payments from Bayer to Loxo are expected to total a huge $975m by the end of 2018 – assuming all goes well – the terms were surely hammered out in a very competitive process.

Robert LaCaze, head of Bayer’s oncology strategy business unit, told EP Vantage that he did not know whether this was the case, and declined to talk about peak sales potential. However, it is clear that the German conglomerate, which is under pressure to prove that its can compete on the global stage with more focused multinational drug makers, expects great things.

“When we talk about trying to turn cancer into a chronic disease or into an area where we have curative intent, this is one of those compounds that might fulfil that promise,” Mr LaCaze told journalists last week, at Bayer’s annual pharmaceuticals media day in Berlin. 

Driving cancer

Mr LaCaze was handed the reins of Bayer’s so-called oncology SBU at the end of last year; the unit is a carveout from the company’s pharma division, tasked with driving the clinical development of its cancer portfolio.

Nexavar is this unit’s best-selling product, although looming patent expiry means that this liver cancer drug has almost stopped growing. The radiopharmaceutical Xofigo is seen as its biggest hope near term, though this could change if a safety signal that emerged last week develops into something more serious (Bayer’s pharma day turns into a pharma nightmare, December 1, 2017).

Last week Mr LaCaze also highlighted Aliqopa, a PI3K inhibitor that Bayer believes is differentiated from similarly acting molecules like Gilead’s Zydelig by its ability to block both alpha and delta signalling pathways, and darolutamide, which is in phase III for prostate cancer. The molecule is structurally very different from Astellas’s Xtandi (enzalutamide), Mr LaCaze maintains, so is less likely to cross the blood brain barrier but still has very high binding affinity.

However, Bayer’s cancer pipeline took a hit earlier this year with the failure of the antibody-drug conjugate anetumab ravtansine in mesothelioma. And while the company maintains that the project could still have utility if responders can be identified, sellside analysts have substantially lowered expectations.

Bayer's cancer portfolio
Global sales ($m)
Project Pharma class 2017e 2019e 2021e 2022e
Marketed
Xofigo Radio-pharmaceutical 471 664 810 888
Stivarga Multi-TKI 338 448 522 537
Aliqopa PI3K inhibitor 4 125 301 408
Nexavar Multi-TKI 984 1,022 531 287
Phase III
Darolutamide Androgen receptor antagonist - 53 317 465
Phase II/I
Larotrectinib TRK inhibitor - 116 375 497*
Anetumab   Ravtansine Anti-mesothelin MAb-DM4   maytansinoid conjugate - 7 26 38
LOXO-195 TRK inhibitor - - 16 24*
*Consensus from analysts covering Loxo. Source: EvaluatePharma.

With larotrectinib, and the follow-on molecule LOXO-195, Bayer has certainly given itself something much more novel to talk about. Larotrectinib is one of the leading assets in development to target a specific tumour mutation rather than a particular cancer type, and the TRK inhibitor has consistently generated encouraging data, albeit in small studies.

Results from the phase I Scout trial presented this week at a paediatric AACR satellite conference were no exception. The new data comprise an additional three months' follow-up in 17 patients that importantly have now been centrally assessed, with no deterioration in quality. Complete and partial responses were 13% and 80% respectively, and no patients experienced disease progression.

A consensus from Bayer analysts for larotrectinib and LOXO-195 is not yet available, although peak sales of around $850m have been mooted, for each project. Bayer and Loxo have a co-promote in the US and share costs and profits 50/50, but even with these terms it is clear that these assets could well become the stars of Bayer’s cancer pipeline.

Mr LaCaze added that Bayer will shortly unveil two novel immuno-oncology projects which will go into the clinic next year.

But the failure of anetumab ravtansine, which only a few months ago was being described as a major future sales growth driver, serves to highlight how Bayer needs these bright spots (Bayer looks beyond Xarelto and Eylea, February 22, 2017).

Burnt fingers?

Of course regulatory approvals must first be won for larotrectinib – filings are expected imminently in the US and next year in Europe. And Mr LaCaze admits that finding patients will be a big challenge; while it is becoming increasingly common to screen for tumour mutations, tests specifically to identify TRK mutations must be rolled out.

Loxo clearly saw the benefit of having a large partner like Bayer help build this new market. And although some investors were disappointed that the deal was not a full-blown takeover, Bayer’s form in this regard should be remembered.

Back in 2009, the original deal over Xofigo with a small Norwegian biotech called Algeta was structured with a 50% co-promote and profit share in the US. In 2013, Bayer finally pulled the trigger on a $2.4bn buyout.

Loxo shareholders still hoping for the ultimate payout will have to hope that the Xofigo news does not go on to burn Bayer’s fingers.

To contact the writer of this story email Amy Brown in London at AmyB@epvantage.com or follow @ByAmyBrown on Twitter

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