Servier's Shire Oncology Buy Gives Base For US Expansion
Executive Summary
With the $2.4bn acquisition of Shire's oncology assets, including Oncaspar and Onivyde, the French drug maker has laid down a marker to become a key player in cancer and sees the US in particular as the land of opportunity.
While many observers focused on the effect the sale of its oncology business to Servier SA will have on Shire PLC, which is expecting a takeover offer from Takeda Pharmaceutical Co. Ltd., the deal is also a significant one for the privately held French group and its hopes to become a major player in cancer on both sides of the Atlantic. (Also see "Shire's Suitors: Takeda, Pfizer Seen As Likely To Bid; Amgen Could Enter Fray" - Scrip, 6 Apr, 2018.)
Servier is paying $2.4bn in cash for the unit, a price that is a little higher than analysts at Deutsche Bank and Jefferies had expected – the brokers had net present value (NPV) estimates of $2.1bn and $2.3bn respectively. For its money, the Suresnes-headquartered firm is getting Oncaspar (pegaspargase), a component of multi-agent treatment for acute lymphoblastic leukemia (ALL), ex-US rights to Onivyde (irinotecan pegylated liposomal formulation), used as combination treatment for metastatic pancreatic cancer post gemcitabine-based therapy, as well as calaspargase pegol which is under FDA review for the treatment of ALL, and two early stage immuno-oncology (I-O) pipeline collaborations. (Also see "Servier Acquires Shire Oncology Business For $2.4bn" - Scrip, 16 Apr, 2018.)
Servier told Scrip that one of those collaborations is with Denmark's Symphogen and relates to immune checkpoint modulators. The other is with US company Precision Biosciences, looking at allogeneic CAR-T cell candidates.
The acquisition is something of a coup for Servier. Jefferies pointed out in an investor note April 16 that the process to divest Shire's oncology business reportedly began in January, "with multiple strategic buyers identified across the US, Europe and Japan," and as well as advancing its reach in cancer, Servier president Olivier Laureau said in a statement that the deal allows the firm to establish "a direct commercial presence in the US," with products being marketed through a newly created subsidiary.
The US is key to the French company's future plans and in February this year, it opened the Servier BioInnovation office in the heart of the life sciences hub of Cambridge, Massachusetts. The new facility will identify new R&D opportunities and expand business development and licensing activities across the pond.
The company is no stranger to US pacts in oncology. Servier licensed the allogeneic CAR T-cell candidate UCART19 to Pfizer Inc. in 2015, having itself bagged the rights from Cellectis SA), and has been collaborating with the US behemoth on the frozen, 'off-the-shelf' T cell product in Phase I trials for ALL. Earlier this month, Pfizer transferred its CAR-T assets to newly-formed Allogene Therapeutics Inc. and Servier and Allogene aim to start mid-stage studies of UCART19 in 2019 – the latter will have US rights and Servier will hold them elsewhere. (Also see "'We Jumped' At Opportunity To Take On Pfizer's CAR-T Program, Allogene's Chang Says" - Scrip, 4 Apr, 2018.)
Servier also has strategic research alliances with Harvard University and the Massachusetts Institute of Technology and becoming a leading player in cancer is one of the goals that Laureau hopes to achieve by 2021. Those goals include the launch of a new molecular entity every three years, maintaining its position in cardiology (according to him, currently number two in Europe and eighth worldwide) and attaining sales of €5bn, up from €4.15bn in 2016/17.
Last year, four oncology agreements were inked, including an I-O licensing deal with Germany's Pieris Pharmaceuticals Inc. and a CAR-T collaboration with fellow French group Transgene. As a result of these deals and in-house research, the share taken by oncology in Servier's R&D spend has jumped in two years from 14% to 37% last year and should reach 50% within the next two years.
It has three anticancer drugs on the market in Europe – Muphoran (fotemustine) for melanoma and cerebral tumors, Pixuvri (pixantrone) for the treatment of adults with multiply relapsed or refractory aggressive non-Hodgkin’s B-cell lymphoma and Lonsurf (trifluridine/tipiracil) for metastatic colorectal cancer. Servier told Scrip it is pursuing new indications with Lonsurf, such as gastric cancer and earlier-stage colorectal cancer.
Analysts at Datamonitor Healthcare believe that the crowded nature of the colorectal cancer market means that Lonsurf will struggle to gain significant uptake, not least due to competition from immunotherapy blockbusters such as Merck & Co. Inc.'s Keytruda (pembrolizumab), Bristol-Myers Squibb Co.'s Opdivo (nivolumab) and further down the line Roche's combination of Tecentriq (atezolizumab) and Cotellic (cobimetinib), although the Swiss major did halt enrollment for a Phase II study for the combo last week after four patient deaths were reported.
In terms of the oncology pipeline, as well as UCART19, Servier also has high hopes for flotetuzumab, a humanized dual-affinity re-targeting (DART) protein which is being co-developed with MacroGenics and is in early-stage trials for acute myeloid leukemia and myelodysplastic syndromes.