Disappointing Nerlynx sales shows Pierre Fabre timing is everything

Caveat emptor. Executives at French group Pierre Fabre might be wishing they had brushed up on their Latin before shelling out $60m up front for European and African rights to Puma Biotechnology’s breast cancer drug Nerlynx. Fabre’s decision to buy in came less than six weeks before Puma reported disastrous first-quarter results, showing that Nerlynx had significantly missed expectations. First-quarter sales of $45.6m came up considerably short of the $67m the market had been expecting, prompting a slew of analyst downgrades and a 20% drop in Puma shares. The miss was largely down to patient discontinuations due to severe diarrhoea, a side-effect of Nerlynx that requires anti-diarrhoeal medication to be indicated as part of treatment. It seems that even these measures cannot persuade already sick patients to remain on the therapy – nor, more importantly, to lure new patients in to replace those who have made it through the 12-month treatment window. Alongside the $60m Pierre Fabre has already paid, the group is also on the hook for $345m in regulatory and commercial milestones. Given the worsening outlook for Nerlynx, Pierre Fabre might be grateful that it chose such a back-end heavy deal.

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