Vantage Snippets are short summaries of breaking news stories.

Oncology flirtation exposes Dynavax’s poor capital structure

Long-term investors in Dynavax Technologies must be rolling their eyes. Two years after de-emphasising the hepatitis B vaccine Heplisav-B to focus on oncology the company is de-emphasising oncology to focus on Heplisav-B. Embarrassing though this U-turn undoubtedly is, it is nothing compared with the circumstances that led to it: a year ago Dynavax took out a $175m loan, and there is today a real risk that it might breach its covenants. At the first quarter the group had gross cash of $183m, but spent $18.3m to sell just $5.6m of Heplisav-B. The loan’s covenants will be breached if Heplisav-B sells less than $30m for the whole year, and if this happens Dynavax will have to repay it in full. Yesterday’s plan to seek buyers for oncology assets like the TLR9 agonist SD-101, and defenestrate Dynavax’s chief executive, could give the group a shot at focusing everything on achieving the sales target. SD-101 yielded promising data in combination with Keytruda at last year’s Esmo meeting, and last month was said to hold promise combined with 4SC’s HDAC inhibitor domatinostat in mouse studies. Over to 4SC.

Dynavax's first-quarter highlights
Heplisav-B sales $5.6m
Operating net cash outflow ($39.9m)
Balance sheet
Gross cash $183.2m
Gross debt ($175.7m)
Summary of term loan
Maturity date 31 Dec 2023
Principal amount ($177.3m)
Effective interest rate 10.2%
Key covenants Minimum $15m daily cash & investment balance
Minimum $30m of 2019 Heplisav-B sales

Medtronic outlines a glorious future

Medtronic’s year-end call was a masterclass in accentuating the positive. The positive data on the group's transcatheter aortic valve CoreValve in low-risk patients has not resulted in a meaningful sales bump, but management pointed out that there had been no low-risk approvals yet, and there is no reimbursement for products that are unapproved. A “marked increase” might follow if the FDA expands CoreValve’s label to include low-risk patients, the group said. Medtronic also made much of its pipeline, with one possible advance being the expected launch of its next-generation artificial pancreas, the MiniMed 780G, by the end of fiscal 2020, around a year from now. Various work in spinal cord and deep brain stimulation, as well as radiofrequency ablation and renal denervation, was also bandied about. And the company is determined to accelerate its pursuit of M&A, with its chief executive, Omar Ishrak, saying the group had “tremendous firepower”. This will doubtless be welcomed by investors, since the company has not done an acquisition of any great size since its purchase of Heartware nearly three years ago.

Medtronic's last 10 acquisitions
Date Target Value ($m) Focus
May 2019 Titan Spine Undisclosed Orthopaedics
Jan 2019 Epix Therapeutics Undisclosed Cardiology
Sep 2018 Mazor Robotics Undisclosed Diagnostic imaging; general & plastic surgery; neurology; orthopaedics
Apr 2018 Visionsense 75 Ear, nose & throat; endoscopy; ophthalmics
Dec 2017 Crospon Undisclosed Diagnostic Imaging; endoscopy; gastroenterology; patient monitoring
Aug 2016 Intact Medical Undisclosed General & plastic surgery
Jun 2016 Heartware 1,017 Cardiology
May 2016 Responsive Orthopedics Undisclosed Orthopaedics
May 2016 Gynaecology business of Smith & Nephew 350 Endoscopy; obstetrics & gynaecology; orthopaedics; wound management
May 2016 Mazor Robotics (minority stake) 52 Diagnostic imaging; general & plastic surgery; neurology; orthopaedics
Source: EvaluateMedTech.

Nektar hopes to attract fresh valuation

In 2013 Theravance split itself into Theravance Biopharma and what was to become Innoviva in what looked like an attempt to flush out an acquirer for one of these divisions. A similar logic might lie behind today’s decision to spin out Nektar Therapeutics’ painkiller NKTR-181 into a separate legal entity, Inheris Biopharma. On the other hand, while the Theravance cleavage gave rise to a new listed business that immediately attracted an independent valuation, Inheris will – at least initially – be a wholly owned Nektar subsidiary. Nektar had enjoyed a healthy climb a couple of years ago as NKTR-181 showed the potential to become an abuse-proof painkiller, but subsequently the group’s valuation – and collapse from the highs of mid-2018 – has had more to do with its oncology business. The Inheris spin-out might enable Nektar to be seen largely as a cancer company, and could help distance the group from association with the US opioid crisis; NKTR-181 faces a US PDUFA date in August. On the other hand, if a drastic solution is sought the group might bear in mind that, six years on, neither Theravance Biopharma nor Innoviva has been acquired.

After the split: Nektar's remaining pipeline
Project Mechanism Indication
Phase III
Bempegaldesleukin (NKTR-214)* CD122-biased agonist Various incl melanoma and RCC
Onzeald (etirinotecan pegol) Topoisomerase I inhibitor Brain metastases in breast cancer
PEGPH20 Pegylated hyaluronidase  Pancreatic cancer
Phase II 
Dapirolizumab pegol** Anti-CD40L antibody Lupus
NKTR-262 Toll-like receptor agonist Solid tumours
Phase I
NKTR-358*** IL-2 conjugate Treg stimulator Autoimmune diseases
NKTR-255 IL-15 receptor agonist Cancer and virology
*Partnered with Bristol-Myers Squibb; **partnered with Biogen; ***partnered with Lilly; partnered with Gilead in virology. Source: EvaluatePharma, company website.

Medtronic keeps renal denervation data coming

As cardiologists wait for the pivotal US trial of Medtronic’s Symplicity Spyral to report next year, data from two smaller studies hint at the renal denervation device’s potential as a therapy for hypertension. Results from an investigator-sponsored, Medtronic-funded trial, presented today at the EuroPCR meeting in Paris, found that 19% of patients treated with denervation developed subclinical atrial fibrillation, compared with 47% of those who received a sham procedure. The trial, in 80 high-risk patients with hypertensive heart disease who were at risk of atrial fibrillation and cardiovascular death, might be a very early step towards expanding the Symplicity Spyral’s addressable population. To this end Medtronic is conducting the 70-patient Symplicity AF study of the device in patients with paroxysmal and persistent atrial fibrillation; results are expected this summer. And data from the Global Symplicity Registry, tracking patients treated with the device since its approval in Europe in 2013, led to reductions in office and 24-hour ambulatory blood pressure of 16.5mmHg and 8.9mmHg respectively at three years post-treatment. Medtronic describes these data, which come from 2,300 patients, as “significant and clinically meaningful”.

Medtronic's US renal denervation trials
Device Study Enrolment Primary efficacy endpoint Status Trial ID
Symplicity Symplicity-HTN3 535 Change in office systolic BP at 6mth First US pivotal trial; failed Jan 2014 NCT01418261
Symplicity Spyral Spyral HTN-Off Med 170 Change in systolic 24hr BP at 3 yr 3mth interim data reported Aug 2017; full data end 2018 NCT02439749
Symplicity Spyral Spyral HTN-On Med 106 Change in systolic 24hr BP at 3 yr 3mth interim data expected May 2018; full data 2021 NCT02439775
Symplicity Spyral Spyral HTN Pivotal Trial 433 Change in 24hr BP at 3mth Full data expected 2020 NCT02439749
Symplicity Spyral Symplicity-AF 245 Freedom from either AF lasting 30 sec or more, or intervention for AF Full data expected Jul 2019 NCT02064764
BP=blood pressure. AF=atrial fibrillation. Source: EvaluateMedTech and

Amgen goes for Nuevolution, not revolution

Amgen must have seen something it liked at its preclinical-stage partner Nuevolution; the big biotech today opted to buy the group in full. The $167m price looks like an affordable bet on Nuevolution’s DNA-encoded drug discovery platform Chemetics, which is designed to find small molecules against hard-to-hit targets. Today’s acquisition could also save Amgen money in the long run, assuming that Nuevolution’s approach is all it is cracked up to be: the bigger group had been on the hook for milestones of up to $410m per target under the companies’ 2016 research collaboration in oncology and neuroscience. Amgen opted in to two unnamed cancer programmes last year, but Nuevolution’s lead project, a RORγt inhibitor approaching the clinic for psoriasis, is partnered with Almirall. The next most advanced candidate is a BET-BD1 inhibitor, NUE20798. Nuevolution also has a partnership with Johnson & Johnson dating back to 2015 and covering oncology, inflammation and anti-infectives. Perhaps the presence of other interested parties spurred Amgen to make its move now, although if this was the case Nuevolution might have sold itself short. Still, the Danish group’s venture backers, who had put in just $33m since it was founded in 2001, have got their exit at last.

Nuevolution's preclinical pipeline
Project Indication(s)
RORγt inhibitor* Psoriasis, psoriatic arthritis, ankylosing spondylitis, inflammatory bowel disease
BET-BD1 inhibitor (NUE20798) Atopic dermatitis, psoriasis, fibrosis, lupus
IL-17A inhibitor Inflammatory diseases
RORγt agonist Immuno-oncology
GRP78 inhibitor** Oncology
TYK2 inhibitor Inflammatory diseases
RIPK1 inhibitor Inflammatory diseases, Alzheimer's
*Partnered with Almirall for psoriasis/psoriatic arthritis; **partnered with Cancer Research Technology & Institute of Cancer Research. Source: company website, Edison note Mar 19, 2019.


Payback time for Nuevolution's venture backers
Date Round Amount ($m) Investors
Dec 2001 Series A 4.5 Nordic Biotech, Novo, Vækstfonden
Oct 2003 Series B 15 Nordic Biotech, Novo, Vækstfonden, Scandinavian Life Science Venture, SEB Foretagsinvest
Jun 2012 Series C 13.9 SEB Utvecklingsstiftelse, SEB Venture Capital, Sunstone Capital, Industrifonden
  Total 33.4  
Source: EvaluatePharma.

Early lung cancer data back J&J’s Monarch

Interim data from the first human trial of the Monarch platform developed by Johnson & Johnson’s subsidiary Auris Health suggest that the robotic endoscopy system could be used to locate and biopsy suspected lung cancer. In the first 24 patients in the Benefit study the primary effectiveness endpoint, successful navigation to targeted peripheral pulmonary lesions, was reported in 92% of cases, with no significant adverse events. The trial will go on to enrol a further 30 subjects. Monarch uses a combination of direct visualisation, navigational guidance and radial endobronchial ultrasound; it was cleared by the FDA last year for diagnostic and therapeutic bronchoscopic procedures, despite having at that time only been used in cadaveric tissue. The intention is that lung nodules could be diagnosed with greater precision and more quickly than by traditional biopsy, saving healthcare systems cash, and it seems possible that the Benefit data will boost sales of the device. Whether it will provide enough of a sales bump to justify the $3.4bn J&J paid to acquire Auris in February is a different question.

Auris Health's Monarch platform

Biocryst loses on trial “win”

Biocryst has bagged a win with its latest oral hereditary angioedema candidate, BCX7353 – kind of. The Apex-2 trial, testing the project as a preventative therapy, met its primary endpoint. But a 44% reduction in HAE attacks with the higher 150mg dose of BCX7353, although statistically significant, fell well short of the 87% reduction seen with the market leader, Takeda’s Takhzyro, in its phase III study. This raises the question of whether any patient would want to take a chance on Biocryst’s once-daily pill, despite its convenience advantage over subcutaneous Takhzyro, particularly since HAE attacks can be fatal. And, with BCX7353 linked with diarrhoea and liver toxicity, it is not without risks either. Biocryst investors did not see any reason for optimism, sending the group’s stock down 51% this morning. EvaluatePharma sellside consensus forecasts BCX7353 sales of $287m in 2024, and according to the EvaluatePharma Vision module Biocryst has ploughed $235m into its clinical development. The company is also evaluating BCX7353 as an acute HAE therapy, with the pivotal Zenith-2 trial set to begin this summer, but after today's setback hopes here cannot be high.

The hereditary angioedema landscape
Product Company Description Setting Status 2024e sales ($m)
Takhzyro Takeda SC kallikrein antibody Prophylaxis Marketed 1,764
Ruconest Pharming IV complement factor C1 convertase inhibitor Acute Marketed 509
KVD900 Kalvista Oral plasma kallikrein inhibitor Acute Phase II 411
Haegarda CSL SC complement factor C1 convertase inhibitor Prophylaxis Marketed 362
BCX7353 Biocryst Oral kallikrein 1 inhibitor Prophylaxis/acute Phase III 287
Source: EvaluatePharma.

Ocular Therapeutix still has an eye on approval despite trial failure

Ocular Therapeutix gave itself a low bar to clear in the latest phase III study of OTX-TP, pitting the glaucoma project against placebo rather than an active comparator – but even that was not low enough. The trial failed to show a decrease in intraocular pressure with OTX-TP, an eye insert that delivers travoprost, versus placebo, across the 12-week study. Despite the failure, Ocular still hopes the project has a future, highlighting an analysis of intraocular pressure at individual timepoints that it said showed a significant benefit with OTX-TP on eight of nine occasions. Still, as the primary endpoint was not hit, these findings can only be considered exploratory. And OTX-TP’s effect appeared to wane over time, raising questions about the company’s sustained delivery approach. Ocular will take the latest data to the FDA but even if the agency decides to be lenient, OTX-TP will struggle to find a place in the market – the project previously failed to beat an active comparator, generic timolol. Investors, who had hoped OTX-TP would fare better against placebo, sent Ocular’s stock down 17% in premarket trading today. Today’s failure might also bode ill for Ocular’s next project, OTX-TIC, a bioresorbable travoprost implant that is in phase I.

Ocular Therapeutix's clinical-stage pipeline
Project Description Indication Status
OTX-TP Travoprost insert Glaucoma and ocular hypertension Failed phase III
OTX-TIC Travoprost implant Glaucoma and ocular hypertension Phase I
OTX-TKI Tyrosine kinase inhibitor implant Wet AMD, DME, RVO Phase I
AMD: Age-related macular degeneration, DME: Diabetic macular edema, RVO: Retinal vein occlusion. Source: EvaluatePharma, company website.

Iovance enjoys a pre-Asco bounce

Iovance Biotherapeutics has emerged as an early Asco winner after abstracts confirmed impressive efficacy for two of company’s projects. The news added 30% to Iovance's market value, taking it to $1.8bn; the immuno-oncology player is developing autologous therapies derived from tumour infiltrating lymphocytes. LN-145 generated an ORR of 44% in 27 pre-treated, recurrent cervical cancer patients; in similar subjects, Keytruda produced an ORR of 14%. Iovance is hoping to win FDA approval for single arm pivotal study in this setting, and these results are seen as improving the chances of this. Meanwhile an update on a potentially pivotal trial of the company’s lead asset, lifileuce, or LN-144, in heavily pre-treated metastatic melanoma patients described a second complete response. The first was revealed at SITC last year, when the company reported an ORR of 38% from 47 patients, with four subjects having progressed. These figures remain the same in the Asco abstract, but now in 55 patients with a longer duration of treatment. This is all very encouraging but the extra $500m in market value gained today means that the pressure is on for Iovance to keep delivering good news. Later cuts of these data, expected at the conference, will be closely scrutinised. 

Iovance share price

Bavencio in renal cancer – too little, too late?

Despite Bavencio winning US approval in combination with Inlyta in first-line renal cell cancer today – a month earlier than expected – Pfizer and Merck KGaA’s anti-PD-L1 antibody appears to be more of an also-ran. Both Bristol-Myers Squibb’s Opdivo (in combination with Yervoy) and Merck & Co’s Keytruda (in combination with Inlyta) are already approved in this setting and each can claim to have an edge over Bavencio. Opdivo’s advantage is being first to market, having been approved in April 2018; Keytruda’s is trial data that appear to be superior – Bavencio looks worse on all of the key outcomes detailed below, and the disparity in the hazard ratios is particularly damning (Asco-GU 2019 – Checkpoint blockers might not be created equal after all, February 20, 2019). Bavencio did demonstrate superiority over Sutent, still the standard of care for now at least, boosting median PFS by more than five months over the older drug. Analysts from Bernstein state that renal cancer will be Bavencio’s main revenue driver, but that they expect Keytruda/Opdivo to “win” overall. They see peak Bavencio sales of $600m, $280m of which will go to Merck KGaA under a profit-share agreement. 

Cross-trial comparison in first-line renal cancer
Drug Study ORR CR PFS HR for OS
Bavencio + Inlyta Javelin Renal 101 52% 3% 13.8mth 0.78*
Keytruda + Inlyta Keynote-426 59% 6% 15.1mth 0.53
Opdivo + Yervoy (int/poor) Checkmate-214 42% 11% 11.6mth 0.66
Source: Asco-GU, Dr Lori Wood. Note: *data premature.
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