AstraZeneca (NYSE:AZN) & Amgen (NASDAQ:AMGN)
On May 26, 2015 both AstraZeneca and Amgen announced that it would end a partnership established back in 2012 for a psoriasis drug collaboration. This collaboration established in 2012 allowed Astrazeneca to work on five antibody compounds from Amgen’s anti-inflammation drug pipeline. Amgen received an upfront payment of at least $50 million dollars and would only be responsible for a small portion of the research and development costs. That is because Astrazeneca had agreed to pay for the R & D expenses from 2012 to 2014. The plan from 2015 on was for both companies to split the costs of running the clinical trials for these anti-inflammatory compounds. In addition any product developed from one of the five portfolio products would have the future revenue split between both companies as well.
The primary part of the deal was Astrazeneca wanting access to a psoriasis drug known as brodalumab. This compound was being established both as a psoriasis drug and psoriatic arthritis drug. Although Amgen wanted out of the deal because they believe it would be in the best interest of both companies to dump the drug completely. For what reason? Well Amgen is not wanting to dump brodalumab because of lack of efficacy. On the contrary brodalumab achieved excellent efficacy in the clinical trial that was run by both companies.
Then why? Well Amgen is wanting to dump brodalumab because patients who took it experienced a lot of suicidal thoughts which is a pretty severe side effect for a drug compound regardless of efficacy. Amgen even added that the FDA would probably require a black box label warning be placed on the product indicating to potential patients that those who take it may experience suicidal thoughts. We believe that Amgen has a good point here because even if brodalumab is ultimately approved that warning label would scare a lot of doctors from prescribing the drug and may even hinder people from taking it. This in turn would limit the amount of potential sales that brodalumab would make in the open market.
If it was just brodalumab in the open market then it may have been able to obtain some type of revenue in sales, although a very small amount. Another problem is that two other big hitting pharmaceutical companies known as Novartis AG (NYSE:NVS) and Eli Lily (NYSE:LLY), are also working on a psoriasis drug of their own. So competition from two fronts plus the problem with the black box label warning from the FDA would not go over well for sales of the drug compound in the open market.
Heron Therapeutics (NASDAQ:HRTX)
On May 28, 2015 Heron Therapeutics was up 40% in after-hours trade after reporting positive phase 3 results for delayed vomiting and nausea after patients have taken highly emetogenic chemotherapy — HEC — agents. The trial was known as the MAGIC study and it was a phase 3 trial that recruited approximately 900 patients to determine the delayed onset of Chemotherapy-induced nausea and vomiting — CINV. This is the only biotechnology company to date that is comparing their drug together with a combo regimen against a combo standard of care regimen.
Heron’s drug is known as SUSTOL and was combined with IV fosaprepitant 150mg together with IV dexamethasone 12mg as part of a three-drug regimen. The key was to determine the amount of efficacy produced in these patients with limited treatment options. This Combo drug regimen from Heron was being tested against a placebo combo regimen with: Ondansetron 0.15 mg/kg plus IV fosaprepitant 150mg togther with dexamethasone 12mg . The primary endpoint of the trial was testing to see the ability of both the drug treatment combo arm from Heron and the placebo combo arm to determine which group would not require rescue medication after patients have gone through the HEC treatment cycle which typically has CINV events that occur 24 to 120 hours afterwards.
Of course since the stock soared 40% in after hours the company met on the primary endpoint. Patients that took the SUSTOL combo regimen achieved a response rate of 67.4% versus the placebo regimen that only achieved a 56.6% complete response rate. The trial was successful because the p-value achieved between both treatment arms was p = .014 which means the SUSTOL group achieved the primary endpoint of being statistically significant. The stock continues to impress as well as it has been up 83% since the after-hours announcement this past Thursday. There is always a chance that there could be some profit taking after such a huge gain but those who hold Heron as a long-term investment should be okay.
Merck (NYSE:MRK) & Amgen (NASDAQ:AMGN)
On May 29, 2015 both Merck and Amgen have agreed to expand upon their collaboration that they had made back in Feb of 2014 whereby both companies agreed to pool their drugs to combat against advanced melanoma. Amgen’s immunotherapy drug achieved positive phase 3 results in patients with metastatic melanoma. Amgen figured that if it paired its drug together with Merck’s immunotherapy drug it could form a very powerful combo drug that could potentially increase overall survival in the melanoma cancer patient population.
The new expanded collaboration though is using Merck’s KEYTRUDA immunotherpy together with Amgen’s Talimogene laherparepvec as a combination drug to be tested in a phase 1 trial in patients with head and neck cancer. For instance T-vec, Amgen’s drug, will only replicate in cancerous cells but do no replicate in any healthy cells. Merck’s KEYTRUDA targets two ligand pathways known as the PD-1 and PD-2 pathways that are responsible for hiding cancer cells from the body’s immune system. This immunotherapy drug blocks those pathways allowing the immune system to finally detect the cancer it needs to eradicate.
Whether this combo works or not remains to be seen but we can get a nice idea on how this combo would work. Merck’s drug would block the PD-1 and PD-2 pathways and allow the immune system to detect the cancerous cells. Then Amgen’s drug would be able to replicate along with the immune system cells in cancerous cells thereby possibly creating a stronger immunotherapy treatment. Merck’s KEYTRUDA is already approved to treat patients with advanced melanoma.