On Monday May 16, 2016 Pfizer had announced that it would acquire Anacor Pharmaceuticals (NASDAQ:ANAC) for $5.2 billion. Translating the $5.2 billion amount to stock, would make it a buyout at $99.25 per share. When this deal was first announced, Anacor was trading in the mid 60’s level. Why exactly did Pfizer feel the need to buy the company? It is because Anacor had a main core drug known as crisaborole which is a topical gel.
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Pfizer sure did have some good timing acquiring the company, especially since crisaborole has not yet received FDA approval. The drug candidate is currently under review by the FDA, and if approved it would be for patients with mild to moderate atopic dermatitis — also known as eczema. Pfizer didn’t waste any time acquiring this biotech, and considering that approval is a long way off it could have possibly waited. The FDA isn’t expected to decide upon approval for crisaborole until January 7, 2017.
On the flip side, Pfizer has extreme confidence that it will be approved considering it is very safe with few side effects, and most importantly the drug works very well in the eczema patient population. Pfizer is quite excited about this acquisition and who can blame them considering that crisaborole is expected to make up to $2 billion in sales on an annual basis. Even though Pfizer spent $5.2 billion to acquire Anacor, it should make a majority of that back in three years anyways.
It is no big deal though, because big pharmaceutical companies look at the long term. After Pfizer makes back its investment in those three years, then it will have a foothold on the drug for many years to come with all the patents. The composition of matter patent doesn’t expire until 2026 and then the method of use patents expire in 2027. If all goes well with the transaction, then Pfizer is expected to completely acquire Anacor in the third-quarter of 2016.
Aduro Biotech (NASDAQ:ADRO)
On Monday May 16, 2016 shares of Aduro Biotech dropped by more than 16% after the company announced that it had failed a phase 2 trial in patients with pancreatic cancer. The phase 2 trial was known as the “Eclipse” trial, and it used the company’s lead vaccine candidate known as CRS-207. The company set up the trial to test CR-207 in combination with another drug GVAX pancreas. The combination was to be tested against current standard of care for pancreatic cancer, known as chemotherapy. The company even went as far as to test CR-207 alone against chemotherapy.
The final results were not what Aduro was hoping for at all. First of all the combination proved to be totally unsuccessful because it obtained a medial overall survival of 3.8 months. CR-207 alone performed better than the combination trial, with a median overall survival of 5.4 months. All those numbers look great if left alone but if we pit them up against the placebo compound it doesn’t look so good. Patients in the placebo trial fared just about the same as the CR-207 drug along. Patients in the placebo trial obtained a median overall survival of 4.6 months.
That means that there is not a noticeable difference between patients treated with chemotherapy and then those treated with CR-207. For the drug to have been statistically significant it would have needed to have a wider cushion margin against the chemotherapy treatment. This was quite a surprise that Aduro didn’t do well on this phase 2 trial. That is because when it ran a prior phase 2a trial it had achieved good results.
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This doesn’t bode well for another biotechnology company known as Advaxis (NASDAQ:ADXS) which also uses similar technology. Both companies have re-engineered listeria bacteria to get to antigen cells, and create a target for the immune system to attack. As seen by Aduro’s results this technology does not bode well in the long run. Even by combining Aduro’s CR-207 together with GVAX Pancreas the results were far worse than CR-207 alone. It would be prudent to avoid both these companies, because for now it seems that the technology doesn’t work as many had hoped for.
[Image Courtesy of Pixabay]