Puma prompts disappointment with European Nerlynx deal

Any lingering possibility of a Puma takeout is now even more remote, given news of a European licensing deal for Nerlynx with Pierre Fabre. With only Japan and the US remaining in Puma’s hands, and a low to mid-teens royalty ebbing away to Pfizer, the economic argument for taking over the company looks weak, even before considering that the breast cancer drug has disappointed commercially. Analysts at SVB Leerink described the terms of the deal as “reasonable” – comprising $60m up front, $345m in milestones and “significant” double-digit royalties – though that conclusion presumably depends on where you stand on Nerlynx’s prospects in Europe. EvaluatePharma’s consensus shows sales of $222m by 2024 in the continent, a number that looks ambitious considering that the drug has yet to be launched there. Few deals are struck over approved cancer drugs – promising projects tend to get snapped up earlier – so similar transactions are hard to find. Regionally analogous deals include Incyte with Iclusig, and Ipsen with Cometriq, and the terms that Ariad and Exelixis managed to extract look considerably more favourable than Puma achieved. All things considered, perhaps Puma got away lightly with a drop of just 10% in its shares today.

Regional deals struck over marketed cancer drugs
Product Company Partner Total deal value ($m) Up front ($m) Royalties Region
Nerlynx  Pierre Fabre Puma  405 60 Double digit Europe, part of Africa
Cometriq Ipsen Exelixis 855 200 Tiered up to 26% ex-US, Canada, Japan
Iclusig Incyte Ariad  275 140 Tiered 32-50%  Europe, 22 other countries*
*Up-front portion involved purchase of Ariad's European operations. Source: EvaluatePharma.

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