With immunotherapies all the rage at Asco in June, Transgene should be in the sweet spot of investor interest. Its therapeutic cancer vaccine TG4010 and oncolytic virus Pexa-Vec are nearing the end of phase II trials, and the French biotech has novel assets that should be turning the heads of investors looking for an M&A target.
With the groundbreaking data some months away from public release, however, the group's chairman and chief executive, Philippe Archinard, is content to talk about his company as a potential partner for big pharma companies interested in acquiring assets in the newly burgeoning field. “If you assume there is generally more of an appetite for immunotherapy in the pharma world today than there was two years ago, we may present an opportunity for some pharma to take a step in this field without adding internally to their resources,” he says. “This may lead to some technology partnership.”
Lead candidate TG4010 is already spoken for, of course, with Novartis having signed an option for the non-small cell lung cancer vaccine in 2010 (Event – Transgene tries again with lung cancer trial, February 8, 2013). Despite the fact that the Swiss group has a claim on it, it will be the largest moment in Transgene’s life so far and should create a huge amount of value for majority shareholder Institut Mérieux and other investors.
Pexa-Vec, under development through a partnership with its originator, private California group Jennerex Biotherapeutics, is more of an open question. Transgene holds European commercial rights, with Jennerex due a share of profits, but it is hard to see the partners taking the product all the way to market.
Pexa-Vec data in colorectal and liver cancer is due later this year. With the most advanced oncolytic virus, Amgen’s T-Vec, having reported positive data in melanoma at Asco, there are signs that the approach of using tumour killing bugs to fight disease might be successful, at least from a clinical perspective (Asco – Despite promise, future of oncolytic viruses remains clouded, June 3, 2013).
“If indeed that goes on to be registered that would help a lot,” Mr Archinard says.
Another oncolytic virus owned by Transgene, was the subject of a deal earlier this month. Basal cell carcinoma treatment TG1042 went to private Australian group Ascend Biopharmaceuticals for undisclosed terms. The product had been in the hands of another Australian immunotherapeutics specialist, Virax, which has gone into administration, so it does not represent a new deal per se, just a shift in partners.
Immunotherapy looks up
The ground in immunotherapy has been paved by Dendreon's Provenge, which has disappointed many because of its limited commercial potential. Its complex manufacturing has been one of the reasons it pulled in just $325m in sales in 2012, quite a drop from its one time near-blockbuster forecasts.
“To some extent it was certainly the most difficult, so it may have raised further doubts,” Mr Archinard acknowledges about the immunotherapy sector. “That’s quite a problem.”
However, the progress of the anti-programmed death-1 (PD-1) candidates like Bristol-Myers Squibb’s nivolumab, Merck & Co’s lambrolizumab and Roche’s RG7466, which take the brakes off the body’s cancer fighting immune mechanisms, may be winning some hearts and minds, making the deal-making ground a little more fertile. Mr Archinard compares it to the state of monoclonal antibodies in the mid-1990s, when the only ones approved were used in transplant rejection and as an adjunct to heart procedures.
“I think it took a while before an opportunity materialised and really became [embraced] by the big pharma world or the general public,” he says of MAbs. “We are not yet there [in immunotherapy] although the field is maturing so really we are more challenged and the only way to deal with this is to get a product registered in this class.”
Life in the clinic
TG-4010 is a therapeutic vaccine using an attenuated poxvirus vector designed to stimulate both innate and adaptive immune response in non-small cell lung cancer. Phase IIb data from the Time trial, aimed at confirming a survival benefit in patients with normal levels of natural killer cells, is expected to be released sometime in the second half. Successful results would then trigger Novartis’ decision on whether to exercise its option on the drug and support phase III trials.
Pexa-Vec is also scheduled to generate data from the Traverse trial in hepatocellular carcinoma later this year, and Strasbourg-based Transgene recently increased its stake in developer Jennerex, taking a $2.5m slice of a $21.6m private placement to existing shareholders of the privately held California firm. Transgene holds rights to the candidate in Europe, the Middle East, Russia and central Asian countries.
Should Pexa-Vec report positive data, Jennerex would seem to be a logical acquisition for Transgene. Jennerex retains US rights and would probably start partnering talks in order to finance a phase III trial – a takeout by Transgene could help the group acquire more value.
However, Mr Archinard says that is not in the plan: “They are close partners. We have many discussions. None of the discussions are on takeover.”
What to do next?
Should both trials come back as successes, Transgene could find itself in the enviable position of having a share of two products in phase III in 2014. As most drug developers will say when posed this question, Mr Archinard calls it a good problem to have.
With its technology, cancer immunotherapy will remain the focus, but cash from partnering income would offer Transgene the flexibility to push its assets into more advanced clinical trials. “Our strategy is to be an integrated biopharma company. We intend to bring our own products to market, not just to systematically license them to big pharma.
“We are not going to go beyond immunotherapy in cancer because this is where we think we can add value,” he adds.
Transgene has two upcoming shots on goal. It could start 2014 a much more valuable company with an array of options, or one that has gone back to the drawing board to make more difficult choices.