Snippet roundup: smart dealmaking by Sanofi – Valeant, not so much

Welcome to your weekly roundup of EP Vantage’s snippets – short takes on smaller news items.

This week, November 6 to 10, 2017, we had thoughts on the following: Sanofi does the maths on Principia; Xalkori’s most important challenger arrives; Valeant draws a $1bn veil over its Sprout transaction.        

These snippets were previously published daily via twitter.

Sanofi does the maths on Principia

November 9, 2017

Sanofi has placed another bet on B-cell involvement in multiple sclerosis, buying rights to Principia Biopharma’s BTK inhibitor PRN2246 for $40m up front. The French company will develop the asset, currently in phase I trials in healthy volunteers, for multiple sclerosis and potentially other CNS conditions. Principia has several BTKs in development, but ’2246 is the only one that crosses the blood-brain barrier, meaning that it could affect immune cell and brain cell signalling. The molecule binds covalently to the enzyme, something Prinicipia says ought to allow for a longer-lasting therapeutic effect than that offered by other BTKs. If the bet is a winner Principia has the option to co-fund phase III trials in exchange for either increased royalties on worldwide sales or a profit-sharing arrangement in the US; milestone payments could reach $765m. There are just two other BTKs in development for CNS disorders, all in MS, with Merck KGaA’s evobrutinib being the frontrunner. Last month evobrutinib started phase IIb trials in MS, arthritis and lupus.

Xalkori’s most important challenger arrives

November 7, 2017

Alk-positive lung cancer has seen the entry of several challengers since Pfizer’s Xalkori effectively created this niche, but none had been as hotly awaited as Roche’s Alecensa. And now that Alecensa has secured its first-line label – US approval was announced this morning – the battle is on for real. The sellside forecasts, as compiled by EvaluatePharma, speak for themselves, and show the Roche drug quickly overtaking Xalkori, as well as Novartis’s Zykadia, a drug whose own label was recently upgraded to include first-line use. Alecensa’s expected dominance is largely due to its ability to cross the blood-brain barrier and thus treat brain metastases, an important problem in Alk-mutated NSCLC. Until recently follow-on Alk inhibitors had been available only for patients failing on Xalkori. Moreover, first-line trials had tested newcomers head to head against the Pfizer drug – something that, if Alecensa does become the first-line Alk inhibitor of choice, will soon become an irrelevant comparison.

Valeant draws a $1bn veil over its Sprout transaction

November 6, 2017

The ongoing joke, when Valeant bought Sprout Pharmaceuticals for $1bn for its female libido drug Addyi, was that Sprout's chief executive, Cindy Whitehead, was probably one of the few women who would actually benefit from the product. Today it looked as if Ms Whitehead could get even more pleasure from the transaction after Valeant said it would be "selling" the company back to former shareholders of Sprout. With no up-front fee to be paid by Sprout and Valeant providing a $25m loan to fund operating expenses it looks like the crippled generics maker is desperately trying to rid itself of a product for which it vastly overpaid, and to end the legal action brought by former Sprout shareholders suing over Valeant’s marketing of the drug. At the height of the Addyi folly analysts had forecast sales of $1bn a year for a drug that only guaranteed women 0.7 extra satisfying sexual experiences per month – with the proviso that even that had to be enjoyed sans alcohol to avoid the low blood pressure the pill can cause. Unsurprisingly – unless you are a sellside analyst, it seems – Addyi sales have disappointed and are thought to have totalled less than $10m last year. Valeant’s acquisition of Sprout should be marked as the pinnacle of the group’s acquisition madness before it was rocked by accounting scandals. The 6% of future sales it will now receive for Addyi should serve as a reminder of its hubris… a very small reminder.

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