Welcome to your weekly roundup of EP Vantage’s snippets – short takes on smaller news items.
This week, March 13 to March 17, 2017, we had thoughts on the following: Medica investors see value in remote radiology; it pays off for Cell Medica to put the CAR-T before the money; Opana panel reverses risk-benefit verdict; Keytruda’s colorectal cancer delay spurs new PD-1 race; Ackman throws in a very expensive towel; Roche cancels patent dance on Herceptin biosimilar.
These snippets were previously published daily via twitter.
Medica investors see value in remote radiology
March 17, 2017
Medica’s £121m ($150m) initial public offering is the fourth in less than a year on the London stock exchange – and also illustrates a growing appetite in the medtech world for telemedicine. Hastings-based Medica specialises in teleradiology, the electronic transmission of patient images from one location to another for diagnosis. The group, via its network of consultants, provides interpretation and reporting services to UK hospitals for imaging modalities including MRI, CT and X-ray, remotely linking hospitals with experts in other parts of the country and potentially speeding up diagnosis. Demand is obviously growing: Medica’s sales increased at a compounded rate of 27% between 2013 and 2015. That a little-known UK company has managed to raise so much is impressive – it is the only medtech IPO so far this year, and would have been the largest by 2016’s standards had it not been for an outlier, Convatec’s huge $1.9bn float. Medica’s offering is also far larger than all of the other listings on the London exchanges in the past few years, once Convatec’s is excluded.
It pays off for Cell Medica to put the CAR-T before the money
March 16, 2017
It might have come a little later than promised, but the £60m ($74m) series C raised by Cell Medica is one of the biggest by a UK company, and easily eclipses the biggest UK round so far this year, the $28.7m raised by Nerre Therapeutics in February. Many previous investors doubled down on their initial bets, with the likes of Touchstone Innovations and venture funds managed by the serial investor Neil Woodford again putting money into the London-based company. Cell Medica’s recent decision to focus its portfolio on the CAR-T space, using autologous natural killer T cells, is bound to have helped in persuading these investors to top up their original investments. Last year the UK group Autolus raised £40m solely on the strength of a preclinical CAR-T pipeline, showing the continuing appetite for immuno-oncology. Cell Medica is expected to use the money to advance key projects into phase II trials as well as complete a phase II trial for its lead asset, baltaleucel-T. In February the FDA granted baltaleucel-T fast-track designation in relapsed or refractory lymphoma.
Opana panel reverses risk-benefit verdict
March 15, 2017
The panel verdict is in, but the question of whether Endo International’s Opana ER will be pulled from market is still open. An adcom yesterday voted 18 to eight, with one abstention, that the extended-release oxymorphone’s benefits no longer outweigh its risks, but no vote on its removal from sale was proposed or taken. Even so, some committee members did suggest that this might be a sensible move on the FDA’s part, citing Opana ER’s potential for intravenous abuse, which has led to addicts contracting serious blood disorders including HIV. The FDA is not obliged to accept the panel’s determination on the risk/benefit ratio, let alone take comments about market withdrawal made in the course of the discussion as instructions. But it could do this, or – perhaps more likely – make the drug’s label more restrictive. Endo’s shares sank late yesterday and closed off 4%, so some people are taking at least some loss of sales as a realistic possibility.
Keytruda’s colorectal cancer delay spurs new PD-1 race
March 15, 2017
Merck & Co’s Keytruda has won FDA approval in another new indication, Hodgkin lymphoma, but will have to wait a while longer for the go-ahead in solid tumours with a microsatellite instability-high phenotype, including colorectal cancer. A decision in the latter indication had been due this month, but has now been pushed back to June 9 after Merck submitted additional data and analyses to the FDA. Patients with high microsatellite instability (MSI) account for around 15% of early-stage metastatic colorectal cancer, and specialists had expected Keytruda to become the new standard in this subgroup. However, as ever in the PD-1/PD-L1 space, competition is fierce, with both Bristol-Myers Squibb and Roche already studying their products in broader colorectal cancer populations. The former is testing Opdivo, either alone or in various combinations depending on MSI status, in the Checkmate-142 trial. And Roche is evaluating a combination of Tecentriq and Cotellic in MSI-stable patients in the Cotezo study. Merck had hoped that its headstart would allow it to carve out a niche in colorectal cancer, but the latest delay could give momentum back to its rivals.
Ackman throws in a very expensive towel
March 14, 2017
The jig is up. After hanging on to its stake in Valeant for more than two years, Bill Ackman’s hedge fund Pershing Square has finally sold up, in the process making a loss measured in the billions. Pershing initially bought into Valeant in February 2015 when the stock was trading at $160, and the bet looked good for a while, with shares up to nearly $260 in late July. Then, when the slide began thanks to Valeant’s price hikes and other controversial business practices Pershing doubled down, buying even more shares that October at $108 apiece. This started to look like good money after bad almost immediately, but Mr Ackman held on like grim death, certain that a turnaround was coming. No such luck: yesterday Pershing said it had sold its entire stake, 27 million shares and options, for just $306m. At its peak, Pershing’s stake was worth around $4bn; Mr Ackman has paid for his stubbornness. Many of Valeant’s other shareholders have taken the hint, pushing its shares down 11% in early trading.
Roche cancels patent dance on Herceptin biosimilar
March 13, 2017
Roche has decided that the decision on when a Herceptin biosimilar will be launched will not be left to the courts and regulators. The Swiss group and its rival Mylan announced a global agreement under which Roche will license out the right to market trastuzumab in all markets except for Japan, Brazil and Mexico. The launch dates of the Mylan biosimilar, called Canmab or Hertraz in the markets where it is already marketed, are confidential under the agreement – the US FDA has set a September 3 deadline for regulatory approval. Mylan says it expects to be the first company to launch a US Herceptin biosimilar. In return for the licence, Mylan has dropped inter partes review challenges against two Herceptin patents. The agreement averts further litigation costs, including those over the exchange of intellectual property following approval known as the “patent dance”. Sales of Herceptin peaked at $6.9bn in 2016, and are expected to shrink to $3.5bn in 2022.