As Bernstein analysts put it, Rybelsus getting a cardiovascular risk-reduction claim on its label so soon was always a long shot. The FDA yesterday confirmed that it wanted results from Novo Nordisk’s long-term outcome study, Soul, before this accolade can be bestowed on the oral GLP-1 agonist. The agency did, however, allow data from Pioneer 6 on Rybelsus’s label; this shorter trial only showed non-inferiority to placebo, with a 21% reduction in Mace failing to hit statistical significance for superiority. Still, the new data should give Rybelsus a boost in the meantime – 21% is impressive compared with other outcome studies in this field. Meanwhile, once-weekly Ozempic – both agents contain the same active ingredient – got its risk-reduction claim thanks to the Sustain 6 result. Trulicity is up next, and Lilly could win an important differentiation if the FDA allows a risk-reduction claim in all type 2 diabetes patients, regardless of prior cardiovascular disease. Rewind was unique in that it recruited subjects without existing heart problems, though the results were far from clear-cut. If the decision goes Lilly’s way the company would be handed an advantage when it comes to payer negotiations, a crucial factor in this highly competitive space.

2019 was widely considered a strong year for biopharma deal making, and a previous Vantage analysis of EvaluatePharma data found a preponderance of takeouts in the “sweet spot” and a big jump in premiums. Cutting the numbers another way tells a different story: buyouts of private companies have fallen over the past five years, both in absolute terms and as a proportion of all deals. There are probably several explanations here. Testing valuations in many therapy areas could be one reason, although this is increasingly being managed by venture firms with the use of tranched takeout terms. The second chart below shows a big rebound last year in the proportion of private deals that involved a contingent value, dependent on future successes. Other points to remember: the IPO window has been open for a few years now, allowing venture-backed start-ups to float more quickly. Perhaps most importantly, the deep pools of venture capital available has meant that many young drug developers simply do not need to seek a buyer. The last two factors are far from constants, however, so this is a trend to keep an eye on. 

Biontech’s purchase of Neon Therapeutics today sees the German jack of all trades putting its stock to use to strengthen its presence in cell therapy. More importantly, at a time when some are worried that acquisition targets are overpriced, it shows that once prices fall far enough deals will get done. And Neon has fallen. Its investors get a 77% premium to yesterday’s close, but the reality is much harsher: Neon had floated in June 2018 at $16, and the Biontech buyout represents a whopping 86% discount to that IPO price. As reality checks go this is quite extreme, and means that Neon is effectively being sold as a distressed asset; its owners are not even getting cash – the $67m buyout is entirely in shares of Biontech, which is sitting on a 130% gain to its own IPO last October. Neon’s neoantigen cancer vaccine NEO-PV-01 had shown early signs of promise last year, but the group swiftly scrapped it in favour of neoantigen-based adoptive T-cell therapies. As Neon failed to attract additional funding its stock drifted. Its pipeline will now sit alongside Biontech’s anti-claudin-6 Car BNT211, which after a lengthy delay has yet to enter the clinic.

RTI Surgical’s move to sell its original equipment manufacturing business to Montagu Private Equity for $490m has delighted its long-suffering shareholders. The deal is huge for the orthopaedics company, which had a market cap of only $203m before the deal was announced. RTI’s stock closed up 63% yesterday after it said it would rid itself of the unit, which the sellside sees as the slowest-growing out to 2024, according to EvaluateMedTech’s consensus forecasts. RTI plans to remake itself as a pure-play spine business; its spinal therapies unit includes the products it obtained from the acquisitions of Zyga Technology two years ago and Paradigm Spine last March, and is forecast to grow much more rapidly than the manufacturing business. As well as investing in its spine offering, the company intends to become debt-free – it had $51.6m total liabilities at the end of October. $480m of Montagu’s payment comes as cash; the other $10m is unspecified.

Yesterday saw substantial share price gains for Adaptimmune and Nantkwest on the back of very early results; the latter’s 99% jump is even more remarkable considering that it was triggered by comments made by the chief executive in an interview. Over-the-top reactions to small datasets seem to be relatively frequent at the moment, a phenomenon that can perhaps partly be explained by the advancement of gene therapies, which can generate excitement with responses in only a handful of patients. But some investors have been voicing concerns about a “frothy” or irrational market for some weeks now. Here, Vantage looks at the biggest out-of-the-park share price reactions since the beginning of 2016 that have been attributed to early clinical results. The findings seem to confirm the fears: five of the 10 biggest phase I data-prompted valuation hikes have happened since October. It is surely no coincidence that this is when the latest biotech rally commenced on the Nasdaq biotechnology index. This is far from a rigorous test of market conditions, of course, but it seems that biopharma remains primed to provide investors with a wild ride. The fact that several of these advances proved misplaced should also be noted. 

The struggling UK cell therapy company Adaptimmune has spent recent years with little meaningful news flow, and its stock drifted accordingly. With cash levels nearly down to zero, therefore, it was fortuitous that yesterday’s announcement of four partial remissions coincided with the first day of the JP Morgan healthcare conference, and sent the group’s shares up 200%. That amounted to an additional $70m of market cap for each response; as an overheated market reaction this is not a record, but it is remarkable nevertheless, especially as two of the responses are still unconfirmed and nothing has been said about response duration. And this is not the first time Adaptimmune has reported partial remissions, though the latest ones do suggest activity beyond its usual sphere of synovial sarcoma. Perhaps one hope is that this is a sign that the company’s new-generation T-cell receptor approach can avoid the sorts of patient deaths seen previously. Last September Adaptimmune had only $39m in the bank; this morning it struck a target discovery alliance with Astellas worth $50m up front, but the big cash injection it needs will come from a secondary equity offering that is surely imminent.

Applied Genetic Technologies’ shares more than doubled yesterday on encouraging data from its retinitis pigmentosa gene therapy. But the jump left AGT capitalised at a mere $169m, a relatively tiny sum for a company that is working with a technology generating much investor excitement – and interest from buyers. Biogen, which now owns AGT’s direct rival Nightstarx, walked away from a deal with AGT that included this project in late 2018, helping to explain the low valuation. The data released yesterday were largely a confirmation of earlier findings, but in a few more patients, with some tracked a little longer. 25 subjects with X-linked retinitis pigmentosa caused by mutations in RPGR have been treated with the XLRP project so far; AGT said yesterday that, of the eight patients that have been followed for six months so far, half showed a sustained increase in visual sensitivity. The crucial question now is why some patients are not responding, and on that there is no answer yet. A pivotal trial is to start by the end of the year, but the company needs to figure out how to identify these non-responders before real progress can be made.

As an also-ran in the immune checkpoint race Pfizer/Merck KGaA’s Bavencio rarely gets much attention, but yesterday it surprised: its success in the phase III Javelin Bladder 100 trial made it the first ever anti-PD-(L)1 MAb to prolong overall survival in first-line urothelial bladder cancer. This is quite a coup, notwithstanding the availability of numerous checkpoint blockers in this tumour type. Quick approvals of five such drugs second line were backed by some questionable data, and Roche’s Tecentriq failed a confirmatory second-line study, Imvigor-211. Meanwhile, Imvigor-130 has not comprehensively backed Tecentriq in the first-line setting, where the Roche drug is also approved (Esmo 2019 – PD-L1 status moves centre stage in bladder cancer, September 30, 2019). Still, the comparison against Bavencio is not direct, as Javelin Bladder 100 was a maintenance trial, rather than a pure treatment study like Imvigor-130. Nevertheless, Bavencio’s success – in all-comer and PD-L1-high populations alike – should soon see the drug add this setting to its US label.

A flurry of pre-Christmas immunotherapy approvals by Japan’s Pharmaceuticals and Medical Devices Agency revealed a disparity in regulatory views of Keytruda’s Keynote-048 study in first-line head and neck cancer. The trial has been used to back the Merck & Co drug’s approval as a monotherapy and as part of a platinum/5-FU chemo combination, but different regulators have applied different restrictions. Japan looks to have backed the broadest label, effectively approving Keytruda in all-comers in both settings, while the US FDA, which had given its green light last June, states that to qualify for monotherapy patients have to be ≥1% PD-L1 expressers. The EU authority is strictest, demanding PD-L1 positivity in monotherapy and chemo combo settings alike. The situation is a result of Keynote-048's highly equivocal result, showing an overall survival benefit for the monotherapy over chemo alone in patients expressing PD-L1 at above 20% and 1%, but not in all-comers; the chemo combo, meanwhile, worked in all-comers, but paradoxically showed no benefit in PD-L1 expressers, and there was no PFS benefit in any group (Esmo 2018 – Merck & Co’s head (and neck) scratcher, October 22, 2018).

The $4.7bn merger between the orthopaedics groups Stryker and Wright Medical has attracted the attention of the US Federal Trade Commission – and with the antitrust authority having shown its teeth recently over the $1.2bn Illumina-PacBio deal this might be more than a mere formality. On December 31 the FTC sent a second request to Stryker and Wright, and the two groups must now submit reams of documentation and their management teams must attend hearings. The upshot might not be as drastic as that of the Illumina-PacBio investigation – that deal was formally terminated yesterday – but the probability is that divestments will be necessary to get the deal done. One of the overlaps between Stryker and Wright is lower extremity joint implants, with Wright having a 70% share of the total ankle replacement market, for example. The companies will have to work fast to hit the initial close date of the second half of 2020. If the FTC does scupper the deal it could open the way for Smith & Nephew to step in as a buyer. Smith & Nephew is rumoured to have made a counterbid for Wright, and probably poses less of an anticompetitive risk.