New company Puma roars with Pfizer licensing deal
Alan Auerbach continues his big cat obsession. Two years after selling Cougar Biotechnology to Johnson & Johnson for nearly $1bn, primarily for prostate cancer drug Zytiga, Mr Auerbach’s new company Puma Biotechnology has licensed from Pfizer the rights to breast cancer treatment neratinib.
In so doing, the California group has also sold a $55m stake to institutional investors to fund development of the oral compound, now in the midst of a huge five-year phase III trial in HER2-positive breast cancer. The financial backers who have bankrolled the company will be hoping that Mr Auerbach has bagged another trophy.
Rationalising a pipeline
Neratinib came into the Pfizer portfolio with its 2009 acquisition of Wyeth. It blocks three kinases that kick HER2 activity into malignant overdrive – EGFR, HER2 and HER4 – and thus is described as a pan-HER inhibitor.
Whilst neratinib has returned positive data – in 2009 the New York company reported that in combination with paclitaxel it achieved median progression free survival of 52.1 weeks in a phase I/II trial of HER2-positive patients – it seldom features in company press releases, earning just a brief mention in a Pfizer preview of the recent European Cancer Organisation conference.
Given that Pfizer is in a seemingly continuous process of rationalising its pipeline, it is not too surprising that it is selling assets that it considers non-core, (Pfizer pulls back on radical transformation, July 8, 2011). EvaluatePharma’s consensus forecast puts 2016 sales for neratinib at $164m, although some individual equity analysts have estimated that it could match that figure as early as 2014.
Just a start
Enter Puma and Mr Auerbach. His previous company in-licensed Zytiga from BTG in 2004 as phase I trials were reporting and developed it through to near the end of phase III trials when J&J purchased it for $970m (J&J goes hunting and bags a Cougar, May 22, 2009). Puma’s backers are hoping that the same proficiency will be shown with neratinib.
Puma will now be solely responsible for the development and commercialisation of neratinib, and will pay milestones and royalties to Pfizer. Financial terms were not disclosed; indeed, few details are available about Mr Auerbach’s new company.
Whilst $55m may be a good start, Puma will clearly need more money than that raised by the private placement, led by the hedge fund Adage Capital Partners. The phase III Extenet trial Pfizer initiated in 2009 and expects to end in 2016 has a target enrolment of 3,850 patients, a total that could push costs near $200m - the estimated cost for a study of this size.
The Extenet trial is testing whether disease free survival can be extended by the use of neratinib following adjuvant treatment with Herceptin. Another large trial, a phase II in combination with paclitaxel against Herceptin and paclitaxel, is underway; it is targeting 480 enrolees and will also not come cheap.
Thus it is clear that Puma will need more than just the skills of Mr Auerbach in bringing a clinically validated product to market, or at least to the point where big pharma wants to buy a one-molecule company. It will need money in the form of additional funding rounds, an initial public offering, or further partnership transactions. Look for this Puma to leave more tracks.