Those who worried that Lilly’s 2008 purchase of ImClone Systems for $6.5bn was overpriced can breathe a little more easily now that necitumumab has followed ramucirumab with an unexpected phase III success. Both oncology antibodies were originated by ImClone.
The biotech firm had been acquired for Erbitux rather than its R&D, yet its pipeline has helped turn Lilly from a business struggling to overcome a huge patent cliff to one that could have a bright future. Still, too much remains unknown about neci’s safety and efficacy to judge whether yesterday’s $1bn jump in Lilly's market cap was justified.
But until yesterday few Lilly analysts had even included neci in their forecasts. The molecule’s success has come from the phase III Squire study of first-line squamous non-small cell lung cancer, in which neci met the primary endpoint of increasing median overall survival.
Son of Erbitux
Neci is a humanised version of Erbitux, a murine MAb, and, barring a small payaway to Dyax, Lilly owns it outright. Erbitux, meanwhile, is subject to complex deals with Bristol-Myers Squibb and Merck KGaA, and since it loses patent protection in 2018 some analysts have quickly moved to highlight neci as a follow-on.
Lilly has not revealed the extent of the OS benefit in Squire, nor anything about secondary endpoints like progression-free survival. But because squamous NSCLC is a major unmet need, analysts at both ISI Group and Bernstein agree that any survival benefit will make it approvable.
However, things are not quite so simple, and two black marks stand out: neci’s other phase III study, in non-squamous NSCLC, was halted in 2011 owing to blood clotting problems, and five months ago Bristol-Myers Squibb, which had held North America and Japan commercialisation rights, scrapped a deal to free itself of responsibility for sharing development costs with Lilly.
One interpretation of Bristol’s move – which probably led analysts to ignore neci in their models – was that it spelled a vote of no confidence after the Inspire trial failure. However, the group could simply have been shifting focus to its anti-PD-1 MAb nivolumab, which has since gained a high profile for its potential in melanoma as well as NSCLC.
Meanwhile, clotting is cited as a serious but less frequent adverse event in Squire. A safety signal could tip the risk/benefit balance in favour of neci’s non-approval.
What to watch
Presentation of the full Squire data next year, likely at Asco, thus becomes a key event for Lilly, and the blood clotting signal will be closely watched, as will the extent of the OS benefit and trends in secondary endpoints.
Earlier studies of the gemcitabine plus cisplatin doublet chemotherapy, on top of which neci was added in Squire, suggest a baseline median OS of 9.4 months and PFS of 4.3 months in the first-line squamous setting, so anything lower could also call the result into question.
Interestingly, Erbitux itself was never approved in NSCLC; two large studies gave inconsistent results, and EU and US filings were turned down. Consensus data compiled by EvaluatePharma list 2018 neci sales of $118m, translating into a risk-adjusted NPV to Lilly of just $241m – numbers that will clearly rise after the Squire readout.
ISI’s Mark Schoenebaum says peak sales for neci could almost reach $1bn if it is priced in line with Avastin and captures 35% of the first-line squamous NSCLC market. Although positive Squire data alone might suffice for approval neci will not be submitted until late next year, however.
The next important data point for Lilly is the imminent readout of the pivotal breast cancer study of ramucirumab, which like neci did not feature in sellside models until its phase III hit in gastric cancer last year (Lilly’s ramucirumab comes off the bench with a clutch single, October 16, 2012).
While much remains to be proved, Bristol’s neci deal termination could turn out to have been the New York group’s second missed opportunity after it lost out to Lilly in the bidding for ImClone.
Judging by the Lilly share price reaction yesterday, the market certainly thinks so.
|Phase III trials of necitumumab|
|Inspire||634 non-squamous pts, plus pemetrexed and cisplatin, open label||NCT00982111||Stopped Feb 2011|
|Squire||1,097 squamous pts, plus gemcitabine and cisplatin, open label||NCT00981058||Topline data Aug 2013|