Stay at the forefront of the week’s champions and runners-up among publicly traded biotech companies and the reasons behind the ups or downs of their stock price fluctuations.
Seagen (SGEN) shares have jumped 18.5% since June 17, when a news report first emerged that the company could be acquired by Merck & Co. That report triggered a 13% surge in Seagen’s price the day of the report, from $146.78 to $165.45, followed by smaller gains the first three days of this week.
Word of a potential Seagen takeover comes about two months after the company’s President, CEO and Chairman Clay Siegall, PhD, was arrested April 23 on a charge of assault in the fourth degree DV, a gross misdemeanor, by the Snohomish County Sheriff’s Office following an alleged incident of domestic violence at his home in the Seattle suburb of Woodway, WA. Siegall—who has denied any wrongdoing—resigned last month from the company’s helm after taking a leave of absence.
Felix J. Baker, PhD, formerly Seagen’s Lead Independent Director, has been appointed Chair of the Board of Directors, while Roger Dansey, MD, Seagen’s chief medical officer since 2018, serves as interim CEO until a new CEO is appointed.
“While we are not speculating on whether SGEN will or will not be acquired, we believe that there are synergies in the SGEN portfolio (three commercial assets and extensive pipeline) that may pair well with MRK’s assets, especially Keytruda (pembrolizumab),” the multi-indication cancer blockbuster, Andrew Berens, MD, Senior Managing Director, Targeted Oncology and a senior research analyst with SVB Securities, wrote in a research note.
Berens noted that Seagen and Merck are already partners on two products:
- Tukysa® (tucatinib), a marketed kinase inhibitor that is indicated in combination with trastuzumab and capecitabine for adults with advanced unresectable or metastatic HER2-positive breast cancer.
- Ladiratuzumab vedotin (LV), which applies Seagen’s proprietary antibody–drug conjugate (ADC) technology to target the LIV-1 gene. LV is in Phase II for both first-line metastatic triple-negative breast cancer in combination with Keytruda, and for relapsed or refractory metastatic solid tumors as monotherapy.
A combination the two companies are working to develop for first-line bladder cancer—Seagen’s PADCEV® (enfortumab vedotin-ejfv) and Merck’s Keytruda—“could unlock a multi-blockbuster opportunity, which we estimate could be ~$7bn+ in total revenues,” Berens added.
The companies are conducting two Phase III trials (EV-303, NCT03924895, and EV-304, NCT04700124), assessing the combo in neo-adjuvant/adjuvant muscle-invasive bladder cancer (MIBC), hoping that their data will outperform that generated by Bristol Myers Squibb, whose own multi-indication cancer blockbuster Opdivo® (nivolumab) received FDA approval last year in adjuvant treatment of patients with urothelial carcinoma.
The companies could also partner in Hodgkin’s lymphoma, where Adcetris (co-developed by Seagen with Takeda Pharmaceutical) generated $705.6 million in net product sales last year for Seagen (up 7% from 2020) and ¥69.19 billion ($507.9 million) in the fiscal year ending March 31 for Takeda, up 16% from a year earlier.
Berens said Adcetris may be at an inflection point: Its label is expected to expand into pediatric Hodgkin lymphoma, with the combination of Adcetris plus standard of care (SoC) chemotherapy achieving superior event-free survival in the National Cancer Institute’s Phase III AHOD1331 trial (NCT02166463). Adcetris plus SoC chemo showed a clinically meaningful and statistically significant 59% reduction in the risk of disease progression or relapse, second malignancy or death compared to current SoC chemo, according to a presentation at the 59th American Society of Clinical Oncology (ASCO) Annual Meeting, held June 3-7 in Chicago.
In February, Seagen announced positive data from the 1,334-patient Phase III ECHELON-1 trial (NCT01712490) showing statistically significant improvement in overall survival (OS) in patients treated with Adcetris plus chemotherapy, vs. chemo alone after approximately six years median follow–up—a 41% reduction in the risk of death.
“HL is likely a durable revenue stream for SGEN given the recent OS benefit at 6 years, which could make it difficult and expensive for a competitor to make inroads or run trials in the 1L [first-line] setting,” Berens added.
A Merck takeover of Seagen “will be the biggest ADC deal and tops Gilead’s $21B takeout of Immunomedics if [it] occurs,” Kelly Shi, PhD, Senior Vice President, Senior Research Analyst in Biotechnology with Jefferies, wrote in a research note.
“Our analysis suggests ADC continues to feature strongly in deal-making and attract public & private capitals, as ADCs are becoming an important anti-cancer drug class,” Shi added.
According to Jefferies, current projected sales of approved ADCs will exceed $16 billion in 2026. Projected to lead those ADCs in sales is Enhertu® (fam-trastuzumab deruxtecan-nxki), a Daiichi-Sankyo/AstraZeneca partnered antibody and topoisomerase inhibitor conjugate with indications in unresectable or metastatic HER2+ metastatic breast cancer and HER2+ locally advanced or metastatic stomach cancer.
Shi also noted that so far, neither Seagen nor Merck has commented on the news report of a possible merger-and-acquisition (M&A) deal. “Talks have been under way for a while, and a deal isn’t imminent,” according to The Wall Street Journal, which cited unnamed sources.
Acer Therapeutics (ACER)
Acer shares fell 21% on Tuesday, to $1.39 from $1.76, the day the company acknowledged that the FDA had issued a Complete Response Letter (CRL) rather than approve the company’s NDA for ACER-001 (sodium phenylbutyrate) for oral suspension for the treatment of patients with urea cycle disorders (UCDs).
The company quoted what it said was an excerpt from the CRL in which the agency said: “[The FDA’s] field investigator could not complete inspection of [Acer’s third-party contract packaging manufacturer], because the facility was not ready for inspection. Satisfactory inspection is required before [the NDA] may be approved.
“Please notify us in writing when this facility is ready for inspection,” the FDA added.
Acer said it was actively collaborating with its third-party contract packaging manufacturer and cooperating with the FDA to address its comments “as soon as reasonably possible.”
Acer said it now intends to resubmit the updated NDA for ACER-001) in early-to-mid Q3 2022.
Acer added that the FDA had not cited any other approvability issues in the CRL pertaining to the NDA, nor request any additional clinical or pharmacokinetic studies be conducted prior to FDA approval. While the FDA requested additional existing nonclinical information to be provided in the resubmission of the NDA, the agency added that it was “not an approvability issue.”
Addex Therapeutics (ADXN)
Addex shares have tumbled 66% since June 17 (Markets were closed June 20 in observance of Juneteenth), the day the company announced it had terminated its Phase IIb/III trial (NCT04857359) evaluating its lead candidate dipraglurant as a potential treatment for dyskinesia associated with Parkinson’s disease (PD-LID). Addex’s stock price fell to $1.14 on Wednesday from $3.345 on June 17.
Addex cited what it called slow recruitment of patients due to COVID-19 related patient concerns about participation in clinical studies, as well as staffing shortages and turnover within study sites.
“We took this decision because it was not feasible to continue the study at such a slow recruitment rate in the current environment. I’d like to emphasize that it was not dipraglurant related and we continue to believe in the potential of this compound as a treatment for PD-LID,” Addex CEO Tim Dyer stated.
Addex also suspended its financial guidance to investors.
Dyer added that Addex will pursue development of its preclinical candidates, as well as strategic collaborations for selected programs, and continuing its strategic partnership with Indivior, which was extended last year when Invidior gave Addex $4 million in new funding.
The extension is designed to advance into the clinic Addex-discovered selected novel oral gamma-aminobutyric acid subtype B (GABAB) positive allosteric modulator (PAM) drug candidates, including candidates for both Indivior’s substance use disorder program and Addex’s proprietary Charcot-Marie-Tooth type 1A neuropathy program. Addex expects both programs to start IND-enabling studies later this year.
Athira Pharma (ATHA)
Shares of Athira plunged 67% since Wednesday—to $2.75 from Tuesday’s close of $8.45—after the company acknowledged that its lead candidate fosgonimeton (ATH-1017) failed the Phase III ACT-AD trial (NCT04491006) in patients with mild-to-moderate Alzheimer’s disease (AD) by missing the study’s primary endpoint of showing statistically significant change in the latency of biomarker ERP P300—a functional measure of working memory processing speed—compared with placebo for the full 77-patient population at 26 weeks.
The combination of fosgonimeton and standard-of-care acetylcholinesterase inhibitors (AChEIs) given together showed a potential diminished effect of fosgonimeton. However, Athira emphasized that a later post hoc analysis of the data from patients on fosgonimeton monotherapy showed a meaningful improvement in both ERP P300 latency (-28 milliseconds) and cognitive performance (ADAS-Cog11: -3.3 points) compared to placebo at 26 weeks.
“These data points are very encouraging as they indicate the expected pharmacological activity of fosgonimeton by parallel improvement on ERP P300 latency and ADAS-Cog11 and show a favorable safety profile over six months. This is the first time monotherapy fosgonimeton has shown an effect on ADAS-Cog11, suggesting a potential cognitive benefit,” Athira’s chief medical officer Hans Moebius, MD, PhD, said in a statement.
Moebius said Athira will use the results to optimize its ongoing Phase III LIFT-AD study (NCT04488419), designed to assess the safety and efficacy of fosgonimeton in approximately 420 patients with mild to moderate Alzheimer’s disease, with a randomized treatment duration of 26-weeks.
Valneva shares nearly doubled on Tuesday, zooming 96% from $13.71 to $26.48, a day after joining with Pfizer to announce the pharma giant will invest €90.5 million ($95 million) in Valneva, taking an 8.1% stake in the company, at a price of €9.49 ($9.98) per share.
The equity subscription agreement entails a reserved capital increase intended to further support an up-to-$308 million strategic partnership announced in April by the companies, focused on developing VLA15, a multivalent protein subunit vaccine vaccine candidate designed to treat Lyme disease.
The companies restated their projected timeframe of launching a Phase III trial designed to evaluate VLA15 in the third quarter of this year.
Pfizer originally agreed to pay Valneva $130 million upfront, $35 million in payments tied to achieving development milestones, $143 million in early commercialization milestone payments, and tiered royalties on sales starting at 19%.
This week, the companies also revised their collaboration agreement, with Pfizer agreeing to pay Valneva an additional $25 million tied to Pfizer’s initiation of the Phase III study, up to $100 million tied to cumulative sales, and tiered royalties ranging from 14% to 22%.