Heading into this year, Subin Baral, EY Global Life Sciences Deals Leader, told GEN Edge that companies were more likely to pursue collaborations than mergers and acquisitions (M&A)—but that where M&A activity would surface, it would most likely be “bolt-on” deals—small to medium-sized acquisitions accounting for less than 25% of a buyer’s market capitalization—rather than blockbuster billion-dollar buyouts.
Unlike last week, when the biggest M&A deal was Sierra Oncology’s announced $1.9 billion acquisition by GlaxoSmithKline (GSK), this week proved Baral right given Regeneron’s planned $525 million purchase of Checkmate Pharmaceuticals—a deal that met with enthusiastic approval on Wall Street.
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.
Checkmate Pharmaceuticals (CMPI) and Regeneron Pharmaceuticals (REGN)
Checkmate shares more than quadrupled on Tuesday, zooming 329% to $10.35, after the company announced its planned acquisition by Regeneron Pharmaceuticals for $525 million cash, in a deal that expands the buyer’s immuno-oncology pipeline with Checkmate’s mid-phase, cancer-fighting lead candidate.
That candidate, vidutolimod (CMP-001), is being developed as a monotherapy and in numerous combinations—including in tandem with Regeneron’s cemiplimab-rwlc, a multi-indication cancer drug marketed under the name Libtayo®, for which the companies began patient dosing in December 2021 in the Phase II CMP-001-009 trial (NCT04916002). The study focuses on the combination’s effectiveness against anti-PD-1 refractory cutaneous squamous cell carcinoma (CSCC) and Merkel cell carcinoma.
Vidutolimod is a next-generation CpG-A oligodeoxynucleotide Toll-like receptor 9 (TLR9) agonist delivered in a virus-like particle. Administered into the tumor, vidutolimod is believed to induce and expand anti-tumor T cells—as well as induce tumor regression as a monotherapy in patients whose tumors previously progressed on PD-1 checkpoint inhibition.
“The unique combination of a differentiated Toll-like receptor 9 with other antibody-based oncology agents may result in increased clinical benefit and provide new treatment options for patients in need,” Regeneron President and CEO Leonard S. Schleifer, MD, PhD, stated.
Jack K. Allen, CFA, Senior Research Analyst with Baird, said Regeneron—whose shares dipped 1% on Tuesday—may not be done with smaller “bolt-on” acquisitions. He speculated that the buyer may be interested as well in buying another of its collaboration partners—Decibel Therapeutics (DBTX), with which Regeneron is partnering to discover and develop gene therapies for hearing loss. The companies began partnering in November 2017 and extended the partnership last November for another two years.
“While it is always hard to project M&A in biotech, we do see potential for Decibel to be acquired by Regeneron as part of a bolt-on M&A strategy, should the large pharma continue to look to bolster existing relationships as was the case with Checkmate,” Allen wrote Wednesday in a research note.
Vidutolimod is also under study in three other clinical trials, including:
- CMP-001-011, a randomized Phase II/III trial (NCT04695977) comparing vidutolimod plus Bristol Myers Squibb’s cancer blockbuster Opdivo® (nivolumab) to Opdivo alone in first-line metastatic or unresectable melanoma.
- CMP-001–010, a Phase II trial (NCT04698187) assessing vidutolimod plus Opvido in anti-PD-1 refractory advanced melanoma.
- CMP-001-007, a Phase II trial (NCT04633278) of vidutolimod in combination with Merck & Co.’s cancer blockbuster Keytruda® (pembrolizumab) in recurrent or metastatic squamous cell head and neck cancer.
AlloVir shares spiked 57% during trading Wednesday, rising to $8.51 from the previous day’s close of $5.41, before finishing the day just 16% higher—all after the company received its third Regenerative Medicine Advanced Therapy (RMAT) designation for its lead investigational multi-virus-specific T cell therapy posoleucel.
The latest RMAT covers the prevention of clinically significant infections and disease stemming from adenovirus (AdV), BK virus (BKV), cytomegalovirus (CMV), Epstein-Barr virus (EBV), human herpes virus-6 (HHV-6) and JC virus (JCV). The six viruses commonly impact high-risk adults and children following allogeneic hematopoietic cell transplant (allo-HCT), the company noted.
The latest RMAT designation was based on initial data from an open-label Phase II trial assessing posoleucel’s potential to prevent life-threatening infections from six common viruses following allo-HCT. Initial data from the trial were most recently presented at the 48th Annual Meeting of the European Society for Blood and Marrow Transplantation (EBMT) in March. Of 26 patients who received at least one dose of posoleucel, and including those who completed, discontinued or are continuing posoleucel, only three clinically significant infections were observed through Week 14. Of the 24 patients who had reached the Week 14 primary endpoint, 21 remained free of clinically significant infections. Final results are expected to be available at year’s end.
The FDA acted after concluding that posoleucel held transformative potential to address significant unmet medical needs facing immunocompromised allo-HCT patients. The FDA previously granted RMAT designation to posoleucel for the treatment of hemorrhagic cystitis (HC) caused by BKV in adults and children following allo-HCT and for the treatment of adenovirus infection following allo-HCT.
Outside of the U.S., the European Medicines Agency has granted posoleucel its Priority Medicines (PRIME) designation for the treatment of serious infections with AdV, BKV, CMV, EBV and HHV-6.
Ampio Pharmaceuticals (AMPE)
Ampio shares plummeted 27% on Thursday, to 25 cents a share, a day after acknowledging that the FDA had taken issue with the company’s modifying its intent-to-treat (mITT) population for evaluating efficacy in the Phase III AP-013 trial (NCT03988023), evaluating its lead candidate Ampion™ in patients with severe osteoarthritis in the knee. The FDA also took issue with Ampio’s stance that data from AP-013 could be accepted as a second pivotal trial to support a biologics license application (BLA) for Ampion.
In a statement, Ampio conveyed the FDA’s view based on written responses to a Type C meeting request that the mITT modification was a “substantive and material” change to the trial’s Special Protocol Assessment agreement, and that Ampion should have sought agreement from the agency on the changes before analyzing and unblinding its data. Ampion trumpeted positive data on March 2 from the 618-patient mITT population saying it showed statistically significant pain reduction and “trended favorably toward improvement in function” compared with a saline control.
Based on both the change in the analysis population and the analysis of improvement in pain only instead of the original prespecified co-primary endpoints of analyzing pain plus function improvement, the FDA asserted that AP-013 could not be a second pivotal trial for Ampion, the company said.
“Given the points in FDA’s answer, it will be very difficult to salvage AP-013 itself as a pivotal trial. Nonetheless, we and our regulatory experts believe there may be ways to do that, and we will follow-up with the FDA in the near term to discuss those options,” Ampio CEO and Chairman Mike Martino said in a statement.
He added: “I believe the best path forward for Ampio and Ampion is likely conducting a new Phase III trial.”
Last month Ampio it expected to be able to fund current operations into the second half of 2023 after securing “incremental liquidity” to boost its cash and cash equivalents to $33.892 million as of December 31, 2021—nearly double the $17.346 million it reported a year earlier. Ampio finished last year with a $17.075 million net loss, compared with a $15.894 million net loss in 2020.
Arcturus Therapeutics Holdings (ARCT)
Shares of Arcturus tumbled 27% in early trading Wednesday, to $18.33, before rallying later in the day to a closing price of $24.47, down 3% from Tuesday’s close of $25.26. The early tumble came after Arcturus announced topline data from an ongoing Phase I/II/III trial sponsored by partner Vinbiocare Biotechnology of the companies’ mRNA-based COVID-19 vaccine candidate ARCT-154 showing 55% overall efficacy for preventing symptomatic COVID-19 disease following two 5-mcg doses.
However, Arcturus also announced 95% efficacy against severe (including fatal) COVID-19 disease. And the company noted that the trial took place in Vietnam at a time when most COVID-19 cases were of the Omicron variant of SARS-CoV-2, unlike the trials preceding FDA approvals for mRNA COVID-19 vaccines COMIRNATY® (Pfizer/BioNTech) and SpikeVax® (Moderna). Piper Sandler analyst Yasmeen Rahimi urged investors in a research note not to jump to conclusions that ARCT-154 was inferior to COMIRNATY or SpikeVax, predicting that Arcturus will find increased commercial opportunities and strategic interest from other vaccine developers on the strength of data from the trial, whose Phase III portion enrolled more than 16,000 participants.
Nektar Therapeutics (NKTR)
Shares of Nektar dropped 23% on Monday, four days after the company joined Bristol-Myers Squibb (BMS) to announce an end to their four-year-old collaboration to develop Nektar’s bempegaldesleukin (BEMPEG) in combination with BMS’ cancer blockbuster programmed death-1 (PD-1) immune checkpoint inhibitor Opdivo (nivolumab).
[Nektar and BMS announced the failure April 14 after the close of trading, and the market was closed Friday for Good Friday]
The termination came after BEMPEG-Opdivo came up snake eyes in two trials—the Phase III PIVOT-09 (NCT03729245) in patients with previously untreated advanced or metastatic renal cell carcinoma (RCC); and the Phase II PIVOT-10 trial (NCT03785925) in patients with cisplatin-ineligible, locally advanced or metastatic urothelial cancer.
BEMPEG-Opdivo failed PIVOT-9 by not meeting the prespecified boundary for statistical significance vs. the tyrosine kinase inhibitor (TKI) control arm in the International Metastatic Renal Cell Carcinoma Database Consortium (IMDC) intermediate/poor-risk or all-risk populations. PIVOT-10 did not reach an efficacy threshold to support continuing the program, BMS and Nektar acknowledged.
Those failures proved to be strikes two and three for BEMPEG-Opdivo. Last month came strike one, when the combination failed the Phase III PIVOT IO-001 trial (NCT03635983), assessing BEMPEG-Opdivo as a first-line treatment for previously untreated unresectable or metastatic melanoma.
In PIVOT IO-001, the independent Data Monitoring Committee (DMC) told the companies the combination missed the study’s third primary endpoint of overall survival (OS) because the data did not meet statistical significance at the first interim analysis. Worse, BEMPEG-Opdivo missed the trial’s two other primary endpoints altogether, progression-free survival and objective response rate.