Results from the Phase III INTEREST (IRESSA Non-small-cell lung cancer Trial Evaluating REsponse and Survival against Taxotere) study, published in the 22nd November edition of The Lancet (2008;372:1809-1818), have shown that patients with pretreated advanced non-small cell lung cancer (NSCLC) who received the oral anticancer drug, Iressa (gefitinib), had comparable survival to those treated with intravenous docetaxel. In addition, gefitinib had a more favourable tolerability profile than docetaxel and significantly more gefitinib-treated patients had an improvement in quality of life.
These results follow previous disappointing data for the drug in the ISEL (IRESSA Survival Evaluation in Lung cancer) study, where gefitinib failed to demonstrate a survival advantage versus placebo in NSCLC patients. This led to a severe restriction on the use of the drug in the US and also to AstraZeneca withdrawing its MAA in Europe. As such, gefitinib is not currently licensed in the EU, however on 2nd May, AstraZeneca submitted an MAA to the EMEA seeking approval as a treatment for locally-advanced or metastatic NSCLC patients pretreated with platinum chemotherapy (CT). The application is based on data from the INTEREST study and is the first time a targeted therapy, an EGFr tyrosine kinase inhibitor, has proven non-inferiority for overall survival (OS) relative to CT in patients with pretreated advanced NSCLC.
The INTEREST study was a randomised, open-label, parallel-group trial evaluating survival with gefitinib versus docetaxel in 1,466 patients with locally-advanced or metastatic recurrent NSCLC who had previously received platinum-based CT. Patients were randomly assigned to receive gefitinib (250mg/day; n=733) or docetaxel (75mg/m2; n=733). The primary objective was to compare OS between the groups with co-primary analyses to assess non-inferiority in the overall per-protocol population and superiority in patients with high EGFr-gene-copy number in the intention-to-treat population.
In the study, 1,433 patients were analysed per protocol (723 in the gefitinib group and 710 in the docetaxel group). Non-inferiority of gefitinib compared with docetaxel was confirmed for OS (593 vs 576 events; hazard ratio [HR]=1.02; 96% CI, 0.905 to 1.150, meeting the predefined non-inferiority criterion; median survival 7.6 vs 8.0 months). Superiority of gefitinib in patients with high EGFr-gene-copy number (85 vs 89 patients) was not proven (72 vs 71 events; HR=1.09; 95% CI, 0.78 to 1.51; p=0.62; median survival 8.4 vs 7.5 months).
Will these new data signal a resurrection for the drug? With such mixed results for gefitinib, it is hard to imagine doctors altering their prescribing habits on the basis of the INTEREST data alone, especially when there are many of other options available for treating LC patients. Tarceva (erlotinib), another EGFr inhibitor, is available, as is Avastin (bevacizumab), with more on the horizon, including Erbitux (cetuximab). One thing that could save gefitinb is the use of pharmacogenomics and a test to predict which patients would be suitable for treatment with the drug. However, this is an expensive and time-consuming undertaking, one that AstraZeneca may not see as financially rewarding or competitive as there are already EGFr inhibitors available, such as cetuximab and Vectibix (panitumumab), that are marketed alongside companion diagnostics. As such, INTEREST could be gefitinib’s final chance of success.
Matthew Dennis - Editor, Cancer Drug News
Thursday, November 27, 2008
Thursday, November 20, 2008
Targeted drugs reduce attrition rates
The results of a new study published in the 14th November online edition of Nature Reviews Drug Discovery (10.1038/nrd2758) suggest that advances in drug development have led to an increase in the number of drugs reaching cancer patients. Scientists from Cancer Research Technology (CRT; Cancer Research UK [CRUK]) obtained data on 974 cancer drugs in clinical development, and calculated that there was a probability that 18 per cent of those entering the clinic would make it to market. Previously it was estimated that in some studies only 5 per cent of cancer drugs in the pipeline become standard treatments for the disease.
The data search was limited to agents which entered Phase I trials after January 1995 and before September 2007, of which 137 are the molecularly-targeted drug class, kinase inhibitors. The research showed that kinase inhibitors were almost three-times more likely to reach patients than other types of anticancer drug. The investigators believe that a better understanding of the basic biology of cancer has enabled the development of this type of new drug, which includes Herceptin (trastuzumab) for breast cancer and Glivec/Gleevec (imatinib) for leukaemia.
The study highlights the fact that understanding more about the basic biology of cancer is making a real difference to the success rate of new anticancer drug development. Additionally, improved drug-discovery processes and advances in medicinal chemistry have also contributed to better success rates of drugs in development. Furthermore, better understanding of a patient's genetic make-up and how they will respond to certain drugs has led to improvements in clinical trial design.As drug development continues to advance, minimising the number of drugs which fail to make it to market will remain key as the cost of discovery and development of those drugs which do not reach market is borne by those that do. The true cost of a drug reaching the market has recently been estimated to be US$0.8 billion to US$1.0 billion.
According to one of the study authors, Professor Herbie Newell, Director of Translational Research at CRUK: "We strongly believe that both industry and academia must improve the availability of data related to failed as well as successful drug development programmes. The sharing of such information can only be beneficial for clinical, scientific and commercial reasons, and will help measure our progress as well as pinpoint areas for improvement."
Historically, the oncology pipeline has been largely made up of small-molecule cytotoxic drugs, which have a low therapeutic index and can fail in clinical trials due to toxicity or efficacy reasons. The recent explosion of information coming from work into understanding the molecular basis of cancer has led to an increase of drugs targeting specific pathways, drugs that are specifically designed to treat cancer, rather than randomly killing proliferating cells. As more information becomes available and newer drugs that are better targeted move into the pipeline, the attrition rate for cancer drugs may reach levels seen with other therapy areas, such as cardiovascular disease where 20 per cent of agents in development reach the market.
Matthew Dennis - Editor, Cancer Drug News
The data search was limited to agents which entered Phase I trials after January 1995 and before September 2007, of which 137 are the molecularly-targeted drug class, kinase inhibitors. The research showed that kinase inhibitors were almost three-times more likely to reach patients than other types of anticancer drug. The investigators believe that a better understanding of the basic biology of cancer has enabled the development of this type of new drug, which includes Herceptin (trastuzumab) for breast cancer and Glivec/Gleevec (imatinib) for leukaemia.
The study highlights the fact that understanding more about the basic biology of cancer is making a real difference to the success rate of new anticancer drug development. Additionally, improved drug-discovery processes and advances in medicinal chemistry have also contributed to better success rates of drugs in development. Furthermore, better understanding of a patient's genetic make-up and how they will respond to certain drugs has led to improvements in clinical trial design.As drug development continues to advance, minimising the number of drugs which fail to make it to market will remain key as the cost of discovery and development of those drugs which do not reach market is borne by those that do. The true cost of a drug reaching the market has recently been estimated to be US$0.8 billion to US$1.0 billion.
According to one of the study authors, Professor Herbie Newell, Director of Translational Research at CRUK: "We strongly believe that both industry and academia must improve the availability of data related to failed as well as successful drug development programmes. The sharing of such information can only be beneficial for clinical, scientific and commercial reasons, and will help measure our progress as well as pinpoint areas for improvement."
Historically, the oncology pipeline has been largely made up of small-molecule cytotoxic drugs, which have a low therapeutic index and can fail in clinical trials due to toxicity or efficacy reasons. The recent explosion of information coming from work into understanding the molecular basis of cancer has led to an increase of drugs targeting specific pathways, drugs that are specifically designed to treat cancer, rather than randomly killing proliferating cells. As more information becomes available and newer drugs that are better targeted move into the pipeline, the attrition rate for cancer drugs may reach levels seen with other therapy areas, such as cardiovascular disease where 20 per cent of agents in development reach the market.
Matthew Dennis - Editor, Cancer Drug News
Wednesday, November 5, 2008
MethylGene cuts staff
Celgene has terminated its licensing agreement with MethylGene for oncology histone deacetylase (HDAC) inhibitors, including MGCD0103. As a result, MethylGene will reacquire all rights to MGCD0103 and other HDAC and sirtuin inhibitors in territories licensed to Celgene including North America and the EU. As part of the termination provisions, Celgene will continue to support MGCD0103 for a period of 90 days to ensure a smooth transition. As a results of this, MethylGene will implement a strategic initiative to focus its resources on the clinical development of its proprietary pipeline.
In August, the FDA placed a partial clinical hold on MGCD0103 studies as a result of the voluntary suspension of enrolment of new patients into trials evaluating the drug following observations of pericarditis or pericardial effusion in 19 subjects out of approximately 400 patients treated. Under the partial clinical hold, patients currently enrolled in MGCD0103 trials who are confirmed to have no signs or symptoms of pericarditis or pericardial effusion may continue in their respective studies. MethylGene believes that regaining exclusive rights to MGCD0103 will allow it to accelerate submissions to the FDA aimed at lifting the partial clinical hold.
The termination of the agreement does not affect MethylGene's relationship with Taiho Pharmaceutical for Japan and certain other Asian countries. Celgene acquired the rights to MGCD0103 through its March 2008 acquisition of Pharmion. MethylGene now owns the worldwide rights to three compounds, MGCD0103 (with the exception of certain Asian territories), MGCD265 and MGCD290, all of which are at various stages of clinical development.
MethylGene also announced that after a review of the company's current research, development and business activities, it will focus on advancing its clinical pipeline, which represents the most attractive, near-term value-generating opportunities. Accordingly, the company will begin a process to discontinue its discovery research activities, including a phased workforce reduction. The first phase of the reduction will occur over the next two months with additional reductions planned during 2009 as funded discovery research with Celgene for sirtuin inhibitors for cancer and with Otsuka Pharmaceutical for kinase inhibitors for ocular diseases are concluded. It is expected that approximately half of the company's current staff of 109 full-time employees will be affected by the transition when completed as planned.
With the implementation of this initiative, it is estimated that MethylGene will have sufficient resources to carry out currently-planned development and operational activities into approximately the third quarter of 2010. These plans include the continuing development of MGCD265 into Phase II trials, MGCD290 through Phase I studies and pursuing the removal of the partial clinical hold on MGCD0103. MethylGene will evaluate progressing MGCD290 into Phase II trials after reviewing Phase I data and evaluating potential partnerships and/or additional funding requirements. The company will also evaluate the status of MGCD0103 once the compound is released from partial clinical hold.
Matthew Dennis - Editor, Cancer Drug News
In August, the FDA placed a partial clinical hold on MGCD0103 studies as a result of the voluntary suspension of enrolment of new patients into trials evaluating the drug following observations of pericarditis or pericardial effusion in 19 subjects out of approximately 400 patients treated. Under the partial clinical hold, patients currently enrolled in MGCD0103 trials who are confirmed to have no signs or symptoms of pericarditis or pericardial effusion may continue in their respective studies. MethylGene believes that regaining exclusive rights to MGCD0103 will allow it to accelerate submissions to the FDA aimed at lifting the partial clinical hold.
The termination of the agreement does not affect MethylGene's relationship with Taiho Pharmaceutical for Japan and certain other Asian countries. Celgene acquired the rights to MGCD0103 through its March 2008 acquisition of Pharmion. MethylGene now owns the worldwide rights to three compounds, MGCD0103 (with the exception of certain Asian territories), MGCD265 and MGCD290, all of which are at various stages of clinical development.
MethylGene also announced that after a review of the company's current research, development and business activities, it will focus on advancing its clinical pipeline, which represents the most attractive, near-term value-generating opportunities. Accordingly, the company will begin a process to discontinue its discovery research activities, including a phased workforce reduction. The first phase of the reduction will occur over the next two months with additional reductions planned during 2009 as funded discovery research with Celgene for sirtuin inhibitors for cancer and with Otsuka Pharmaceutical for kinase inhibitors for ocular diseases are concluded. It is expected that approximately half of the company's current staff of 109 full-time employees will be affected by the transition when completed as planned.
With the implementation of this initiative, it is estimated that MethylGene will have sufficient resources to carry out currently-planned development and operational activities into approximately the third quarter of 2010. These plans include the continuing development of MGCD265 into Phase II trials, MGCD290 through Phase I studies and pursuing the removal of the partial clinical hold on MGCD0103. MethylGene will evaluate progressing MGCD290 into Phase II trials after reviewing Phase I data and evaluating potential partnerships and/or additional funding requirements. The company will also evaluate the status of MGCD0103 once the compound is released from partial clinical hold.
Matthew Dennis - Editor, Cancer Drug News
Tuesday, October 21, 2008
GVAX: development halted
Cell Genesys has decided to terminate the Phase III VITAL-1 (Vaccine ImmunoTherapy with Allogeneic Prostate Cancer Cell Lines) trial of GVAX immunotherapy in patients with asymptomatic, metastatic hormone-refractory prostate cancer (HRPCA) following an independent Data Monitoring Committee (IDMC) analysis, which indicated that the trial had a <30 per cent chance of meeting its predefined primary endpoint of an improvement in survival. In August, the company halted VITAL-2, the second Phase III trial investigating GVAX in PCA, after a recommendation from the IDMC following the observation of an imbalance in deaths between the two treatment arms.
Following the termination of VITAL-2, Cell Genesys requested the IDMC conduct a futility analysis of the VITAL-1 trial, which was fully enrolled in 2007 with 626 patients and compared GVAX to Taxotere (docetaxel) plus prednisone. The latest news hit the company's stock price hard, with shares falling by 73 per cent from a close of US$0.61 on 15th October to open at US$0.16 on 16th October.
In view of these terminations, Cell Genesys is to place on hold the further development of GVAX for PCA pending a review of the programme with its collaborator, Takeda Pharmaceutical. As a result, Cell Genesys will reduce its staff of 290 by approximately 75 per cent by the end of 2008, with further reductions anticipated in the first half of 2009 as additional activities are phased out. As of 30th September, the company had approximately US$150 million in cash and currently estimates that the year-end cash will be approximately US$128 million. Personnel-related restructuring charges of approximately US$12.8 million are expected to be incurred in the fourth quarter of 2008.
Cell Genesys has also reported results of a preliminary analysis of the VITAL-2 trial. In contrast to VITAL-1, the VITAL-2 study was conducted in patients with symptomatic, metastatic HRPCA and compared the combination of GVAX+docetaxel to docetaxel+prednisone as a control. At the time that this study was terminated, the IDMC reported an imbalance in deaths between the two treatment arms that was observed during a routine safety monitoring meeting of the committee. More specifically, of 114 deaths at the time of the IDMC review, 67 occurred in the GVAX+docetaxel treatment arm and 47 in the docetaxel+prednisone control arm.
A total of 408 patients had been enrolled in the study up to that point in time. The company has now conducted an initial analysis of the incomplete trial data set that was reviewed by the IDMC in August. The analysis has revealed no apparent imbalance in patient baseline characteristics with respect to both demographic and disease prognostic factors. In addition, no significant toxicities in the GVAX+docetaxel therapy arm were observed that could explain the imbalance in deaths and in fact, the vast majority of deaths in both treatment arms were reported as due to progression of PCA. Of note, fewer treatment cycles with docetaxel were administered to patients in the GVAX+docetaxel arm compared to the control arm, a difference which was statistically significant.
In a conference call, the company's Chief Executive Officer, Stephen Sherwin, stated that Cell Genesys has since found no evidence that the GVAX regimen carried toxic effects that could explain the additional deaths. "We don't have all the answers," he commented, although cancer sufferers, shareholders and employees will wish that he at least had some.
Matthew Dennis - Editor, Cancer Drug News
Following the termination of VITAL-2, Cell Genesys requested the IDMC conduct a futility analysis of the VITAL-1 trial, which was fully enrolled in 2007 with 626 patients and compared GVAX to Taxotere (docetaxel) plus prednisone. The latest news hit the company's stock price hard, with shares falling by 73 per cent from a close of US$0.61 on 15th October to open at US$0.16 on 16th October.
In view of these terminations, Cell Genesys is to place on hold the further development of GVAX for PCA pending a review of the programme with its collaborator, Takeda Pharmaceutical. As a result, Cell Genesys will reduce its staff of 290 by approximately 75 per cent by the end of 2008, with further reductions anticipated in the first half of 2009 as additional activities are phased out. As of 30th September, the company had approximately US$150 million in cash and currently estimates that the year-end cash will be approximately US$128 million. Personnel-related restructuring charges of approximately US$12.8 million are expected to be incurred in the fourth quarter of 2008.
Cell Genesys has also reported results of a preliminary analysis of the VITAL-2 trial. In contrast to VITAL-1, the VITAL-2 study was conducted in patients with symptomatic, metastatic HRPCA and compared the combination of GVAX+docetaxel to docetaxel+prednisone as a control. At the time that this study was terminated, the IDMC reported an imbalance in deaths between the two treatment arms that was observed during a routine safety monitoring meeting of the committee. More specifically, of 114 deaths at the time of the IDMC review, 67 occurred in the GVAX+docetaxel treatment arm and 47 in the docetaxel+prednisone control arm.
A total of 408 patients had been enrolled in the study up to that point in time. The company has now conducted an initial analysis of the incomplete trial data set that was reviewed by the IDMC in August. The analysis has revealed no apparent imbalance in patient baseline characteristics with respect to both demographic and disease prognostic factors. In addition, no significant toxicities in the GVAX+docetaxel therapy arm were observed that could explain the imbalance in deaths and in fact, the vast majority of deaths in both treatment arms were reported as due to progression of PCA. Of note, fewer treatment cycles with docetaxel were administered to patients in the GVAX+docetaxel arm compared to the control arm, a difference which was statistically significant.
In a conference call, the company's Chief Executive Officer, Stephen Sherwin, stated that Cell Genesys has since found no evidence that the GVAX regimen carried toxic effects that could explain the additional deaths. "We don't have all the answers," he commented, although cancer sufferers, shareholders and employees will wish that he at least had some.
Matthew Dennis - Editor, Cancer Drug News
Tuesday, October 14, 2008
NICE set to block Tyverb's use on NHS
A draft recommendation by the UK's National Institute for Health and Clinical Excellence (NICE) in a second technology appraisal consultation document (ACD) has indicated that GlaxoSmithKline's Tyverb (lapatinib; known as Tykerb in the US and certain other markets) should not be used in the NHS, except in clinical trials. The oral drug is currently approved in the EU in combination with Xeloda (capecitabine) for the treatment of women with ErbB2 (HER2)-positive advanced breast cancer (BC), whose disease has stopped responding to Herceptin (trastuzumab). The draft guidance comes despite GSK proposing a patient access programme (PAP), where it would bear the cost of the drug for the first 12 weeks of treatment.
Lapatinib, in combination with capecitabine, is the only treatment option that is licensed for use in patients with this aggressive form of advanced BC, who have limited treatment options remaining if their cancer has continued to grow despite treatment with standard chemotherapies and trastuzumab for advanced disease. In a pivotal trial that led to its EU licence, lapatinib+capecitabine significantly increased the time-to-progression (TTP) for patients with ErbB2-positive BC compared with capecitabine alone. In its draft guidance, NICE acknowledged that lapatinib is a clinically-effective option and noted that lapatinib+capecitabine was associated with improved TTP and progression-free survival.
In recognition that the first ACD from NICE did not consider lapatinib to be cost effective in treating this patient population, GSK proposed a PAP, where the company would bear the cost of lapatinib for all eligible patients, for up to the first 12 weeks of treatment. The NHS would commence payment only for those patients who continue to receive clinical benefit beyond 12 weeks. Criteria for continuation of therapy beyond 12 weeks would be determined by the individual person's clinician, based on reduction in lesion size, presence of stable disease or improvement in other response criteria such as symptoms. This programme was designed to provide access to all eligible patients and deliver cost-effectiveness at a threshold that should have been acceptable to NICE.
The cost effectiveness of lapatinib+capecitabine was supported by a comparison to trastuzumab-containing regimens and capecitabine alone, representing the established treatment regimens in NHS clinical practice. Whilst NICE accepted that trastuzumab is widely used following progression of the disease, the Committee suggested that it was unlikely to be cost effective, and therefore did not accept trastuzumab as a valid comparator. According to GSK, the way in which the decision was made makes it very difficult to ever demonstrate the cost effectiveness of lapatinib in this patient population, even in light of the proposed PAP.
Following the ACD, GSK will continue to work with NICE to demonstrate the cost effectiveness of lapatinib in all eligible patients by seeking to validate trastuzumab as a legitimate comparator. The next meeting will be held on 19th November, however, it looks as though NICE will stick with its current draft guidance and recommend against funding lapatinib on the NHS.
Matthew Dennis - Editor, Cancer Drug News
Lapatinib, in combination with capecitabine, is the only treatment option that is licensed for use in patients with this aggressive form of advanced BC, who have limited treatment options remaining if their cancer has continued to grow despite treatment with standard chemotherapies and trastuzumab for advanced disease. In a pivotal trial that led to its EU licence, lapatinib+capecitabine significantly increased the time-to-progression (TTP) for patients with ErbB2-positive BC compared with capecitabine alone. In its draft guidance, NICE acknowledged that lapatinib is a clinically-effective option and noted that lapatinib+capecitabine was associated with improved TTP and progression-free survival.
In recognition that the first ACD from NICE did not consider lapatinib to be cost effective in treating this patient population, GSK proposed a PAP, where the company would bear the cost of lapatinib for all eligible patients, for up to the first 12 weeks of treatment. The NHS would commence payment only for those patients who continue to receive clinical benefit beyond 12 weeks. Criteria for continuation of therapy beyond 12 weeks would be determined by the individual person's clinician, based on reduction in lesion size, presence of stable disease or improvement in other response criteria such as symptoms. This programme was designed to provide access to all eligible patients and deliver cost-effectiveness at a threshold that should have been acceptable to NICE.
The cost effectiveness of lapatinib+capecitabine was supported by a comparison to trastuzumab-containing regimens and capecitabine alone, representing the established treatment regimens in NHS clinical practice. Whilst NICE accepted that trastuzumab is widely used following progression of the disease, the Committee suggested that it was unlikely to be cost effective, and therefore did not accept trastuzumab as a valid comparator. According to GSK, the way in which the decision was made makes it very difficult to ever demonstrate the cost effectiveness of lapatinib in this patient population, even in light of the proposed PAP.
Following the ACD, GSK will continue to work with NICE to demonstrate the cost effectiveness of lapatinib in all eligible patients by seeking to validate trastuzumab as a legitimate comparator. The next meeting will be held on 19th November, however, it looks as though NICE will stick with its current draft guidance and recommend against funding lapatinib on the NHS.
Matthew Dennis - Editor, Cancer Drug News
Market jitters affecting takeovers?
As the world financial crisis deepens, the potential takeover deals involving Genentech and Roche, as well as ImClone Systems and Bristol-Myers Squibb, continue to play out. The current market situation could have an impact on the first takeover, although the second looks more likely to proceed smoothly.
For the first time since Roche made its bid to acquire Genentech in July for US$89.00 per share, the latter's shares have dropped below the offer price, ending on 29th September at US$85.30. The uncertainty now surrounding the bid has fuelled speculation that an improved offer may not be made. When Roche proposed the deal, the cost of borrowing was not as high as it in the current climate. Now there are concerns that Roche would have trouble financing the deal, which currently stands at US$43.7 billion, given the current credit market conditions. However, many analysts believe Roche's strong balance sheet and predictable cash flow will still allow it to secure funding for the deal.
The current situation could ultimately work in Roche's favour as the company may choose to draw out the process in order to extract the lowest possible price for Genentech's remaining shares. It may be that many Genentech shareholders would also prefer to wait, given that interim results are expected in November from a key clinical trial looking at the use of Avastin (bevacizumab) in colon cancer patients who have had tumours surgically removed; final results of the 2,700-patient study are due in 2009.
As for BMS' takeover offer for ImClone, which currently stands at US$62.00 per share in cash, Carl Icahn, ImClone's Chairman of the Board, recently commented that the "hostile tender of US$62, at this time, seems absurd". ImClone reportedly has an offer from another large pharmaceutical company of US$70.00 per share, also in cash, subject to due diligence, which was scheduled to be finished on 28th September. ImClone is expecting that a solid offer from this company will be made or a formal rejection, in which case the suitor will be identified, by the end of business on 1st October. Both of these offers, BMS' valued at US$4.7 billion and the other at US$6.1 billion, do not rely on either company raising funds so should not be affected by recent financial developments.
But to add to the uncertainty, Merck KGaA has entered the fray. Although the company has said that it will not bid for ImClone on its own, it has stated that it may consider taking part in a potential approach for the company. Could it join forces with rumoured suitors, such as Eli Lilly and Pfizer, which has coincidentally said recently that it will focus its early-stage research and development programmes on high growth areas, including cancer?
Matthew Dennis - Editor, Cancer Drug News
For the first time since Roche made its bid to acquire Genentech in July for US$89.00 per share, the latter's shares have dropped below the offer price, ending on 29th September at US$85.30. The uncertainty now surrounding the bid has fuelled speculation that an improved offer may not be made. When Roche proposed the deal, the cost of borrowing was not as high as it in the current climate. Now there are concerns that Roche would have trouble financing the deal, which currently stands at US$43.7 billion, given the current credit market conditions. However, many analysts believe Roche's strong balance sheet and predictable cash flow will still allow it to secure funding for the deal.
The current situation could ultimately work in Roche's favour as the company may choose to draw out the process in order to extract the lowest possible price for Genentech's remaining shares. It may be that many Genentech shareholders would also prefer to wait, given that interim results are expected in November from a key clinical trial looking at the use of Avastin (bevacizumab) in colon cancer patients who have had tumours surgically removed; final results of the 2,700-patient study are due in 2009.
As for BMS' takeover offer for ImClone, which currently stands at US$62.00 per share in cash, Carl Icahn, ImClone's Chairman of the Board, recently commented that the "hostile tender of US$62, at this time, seems absurd". ImClone reportedly has an offer from another large pharmaceutical company of US$70.00 per share, also in cash, subject to due diligence, which was scheduled to be finished on 28th September. ImClone is expecting that a solid offer from this company will be made or a formal rejection, in which case the suitor will be identified, by the end of business on 1st October. Both of these offers, BMS' valued at US$4.7 billion and the other at US$6.1 billion, do not rely on either company raising funds so should not be affected by recent financial developments.
But to add to the uncertainty, Merck KGaA has entered the fray. Although the company has said that it will not bid for ImClone on its own, it has stated that it may consider taking part in a potential approach for the company. Could it join forces with rumoured suitors, such as Eli Lilly and Pfizer, which has coincidentally said recently that it will focus its early-stage research and development programmes on high growth areas, including cancer?
Matthew Dennis - Editor, Cancer Drug News
Tuesday, September 16, 2008
Bidding war to start for ImClone?
ImClone Systems' Chairman of the Board, Carl Icahn, has stated that the Special Committee of ImClone's Board of Directors has informed Bristol-Myers Squibb that following the Special Committee's review and discussion, and based upon the advice it received from its advisors, the Special Committee has determined that the unsolicited offer that ImClone received from BMS to acquire ImClone for US$60 per share in cash is inadequate.
Icahn also disclosed that he has had several conversations with the Chief Executive Officer of a large pharmaceutical company. As a result of such conversations, the pharmaceutical company has submitted a proposal, subject to due diligence, but not subject to financing, to acquire ImClone for US$70 per share in cash. Names being bandied about for the unknown bidder include Merck KGaA, Pfizer and GlaxoSmithKline, as well as AstraZeneca and sanofi-aventis. The Special Committee has determined, subject to the execution of a confidentiality agreement, to allow this company to conduct due diligence for a two-week period, subject to extension by mutual consent. No determination has been made as to whether US$70 per share would be adequate.
In response to this disclosure, BMS sent a letter to Icahn stating its disappointment that the offer had been rejected without discussing its merits with BMS and its advisors. BMS also noted that, in contrast to the competing offer, it has made a formal written offer that has been approved by its Board of Directors, is not subject to due diligence and has been fully disclosed to ImClone's stockholders.
BMS currently holds the exclusive long-term marketing rights in the US to Erbitux (cetuximab) and related compounds, including IMC-11F8. BMS stated that it has no intention of agreeing to any modifications to these rights. Additionally, ImClone should understand that BMS’ offer is for the entire company, and any potential restructuring of ImClone could severely jeopardise its value and deprive stockholders of the benefits of the BMS offer.
BMS continues to look forward to engaging directly with ImClone and its financial and legal advisors to discuss the merits of its all-cash offer to acquire the approximately 83 per cent of the company that BMS does not already own. In reply, ImClone submitted a letter to BMS in which it stated that with regard to the assertion concerning rights to IMC-11F8 (which, if ultimately approved for sale, may have a significant competitive effect on Erbitux), ImClone disagrees that BMS' rights are clear and does not waive any rights that ImClone may have with regard thereto. If BMS wishes to make another offer that it believes ImClone would not find inadequate, it is free to do so. Upon receipt of that offer, ImClone will respond appropriately. However, BMS' Chief Financial Officer Jean-Marc Huet has stated that the company is willing to "walk away" from the deal if needed.
Exactly what belongs to whom in the BMS-ImClone partnership will be a key question of interest as ImClone's new mystery bidder conducts its due diligence over the next few weeks. It seems likely that Merck KGaA may be the interested party because it partners with ImClone in selling Erbitux in some countries outside North America and has touted the drug's prospects of being approved for other types of cancer. Perhaps the bidding will now start in earnest?
Matthew Dennis - Editor, Cancer Drug News
Icahn also disclosed that he has had several conversations with the Chief Executive Officer of a large pharmaceutical company. As a result of such conversations, the pharmaceutical company has submitted a proposal, subject to due diligence, but not subject to financing, to acquire ImClone for US$70 per share in cash. Names being bandied about for the unknown bidder include Merck KGaA, Pfizer and GlaxoSmithKline, as well as AstraZeneca and sanofi-aventis. The Special Committee has determined, subject to the execution of a confidentiality agreement, to allow this company to conduct due diligence for a two-week period, subject to extension by mutual consent. No determination has been made as to whether US$70 per share would be adequate.
In response to this disclosure, BMS sent a letter to Icahn stating its disappointment that the offer had been rejected without discussing its merits with BMS and its advisors. BMS also noted that, in contrast to the competing offer, it has made a formal written offer that has been approved by its Board of Directors, is not subject to due diligence and has been fully disclosed to ImClone's stockholders.
BMS currently holds the exclusive long-term marketing rights in the US to Erbitux (cetuximab) and related compounds, including IMC-11F8. BMS stated that it has no intention of agreeing to any modifications to these rights. Additionally, ImClone should understand that BMS’ offer is for the entire company, and any potential restructuring of ImClone could severely jeopardise its value and deprive stockholders of the benefits of the BMS offer.
BMS continues to look forward to engaging directly with ImClone and its financial and legal advisors to discuss the merits of its all-cash offer to acquire the approximately 83 per cent of the company that BMS does not already own. In reply, ImClone submitted a letter to BMS in which it stated that with regard to the assertion concerning rights to IMC-11F8 (which, if ultimately approved for sale, may have a significant competitive effect on Erbitux), ImClone disagrees that BMS' rights are clear and does not waive any rights that ImClone may have with regard thereto. If BMS wishes to make another offer that it believes ImClone would not find inadequate, it is free to do so. Upon receipt of that offer, ImClone will respond appropriately. However, BMS' Chief Financial Officer Jean-Marc Huet has stated that the company is willing to "walk away" from the deal if needed.
Exactly what belongs to whom in the BMS-ImClone partnership will be a key question of interest as ImClone's new mystery bidder conducts its due diligence over the next few weeks. It seems likely that Merck KGaA may be the interested party because it partners with ImClone in selling Erbitux in some countries outside North America and has touted the drug's prospects of being approved for other types of cancer. Perhaps the bidding will now start in earnest?
Matthew Dennis - Editor, Cancer Drug News
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