There have been several noteworthy developments in the drug space recently, which will likely have a material impact on the companies in this sector and the markets they serve. Companies mentioned in this review include Pfizer Inc. (PFE - Free Pfizer Stock Report), Bristol-Myers Squibb (BMY), Five Prime Therapeutics (FPRX), and Actavis plc (ACT).
Pfizer Receives a Pair of FDA Approvals
On March 14th, Pfizer and partner Bristol-Myers Squibb announced that the U.S. Food and Drug Administration approved a supplemental new drug application (SNDA) for Eliquis for the prophylaxis of deep vein thrombosis (DVT), which may lead to pulmonary embolism (PE), in patients who have undergone hip or knee replacement surgery. The approval represents a significant milestone for Eliquis, which is also used to reduce the risk of stroke and systemic embolism in patients with nonvalvular atrial fibrillation. As the number of hip and knee replacement surgeries performed in the U.S. continues to increase, the risk of DVT following these surgeries remains a concern for physicians. The approval of Eliquis provides patients with a new treatment option that offers twice daily oral dosing and no routine coagulation testing, and is broadly accessible through hospitals and managed health care formularies.
On March 20th, Pfizer released some more positive news when it announced that its investigational vaccine candidate Bivalent rLP2086 received the FDA’s Breakthrough Therapy designation for potential prevention of Meningococcal B disease. The illness effects 20,000-80,000 people a year globally, and can result in death or significant long-term disabilities including brain damage and hearing loss. Enacted as part of the 2012 FDA Safety and Innovation Act, the Breakthrough Therapy designation is intended to expedite the development and review of potential new medicines for serious and life-threatening diseases. Pfizer intends to submit an application for Bivalent rLP2086 to the U.S. FDA by mid-2014.
Bristol-Myers Teams up with Five Prime
On March 17th, drugmakers Bristol-Myers Squibb and Five Prime Therapeutics announced they will be working together on experimental immune therapies for cancer. Under the terms of a signed agreement, Bristol-Myers will obtain exclusive, worldwide rights to develop and commercialize products directed toward certain protein targets identified by Five Prime prior to and during the collaboration. The company will make an upfront payment of $20 million to Five Prime, and provide up to $9.5 million in funding over the course of the research term. Additionally, Bristol-Myers will make a payment of approximately $21 million to acquire 4.9% of Five Prime’s outstanding common stock, purchased at approximately a 30% premium. Five Prime will also be eligible to receive up to $300 million in future milestone and royalty payments.
All told, we view the deal favorably from both sides of the table. A partnership with a major biopharmaceutical company like Bristol-Myers is a significant achievement for Five Prime, which just went public in September, 2013. The announcement sent its shares up more than 20%. Meanwhile, Bristol-Myers benefits by greatly expanding its immune-oncology pipeline without investing a huge amount. Shares of BMY rose modestly on the news.
Actavis Settles Daytrana Patent Challenge
On March 19th, Actavis announced that it had entered into a definitive agreement with Noven Pharmaceuticals to settle all outstanding patent litigation related to its generic version of Daytrana, a stimulant used for the treatment of Attention Deficit Hyperactivity Disorder (ADHD). Under the terms of the agreement, Noven will grant Actavis a non-exclusive, royalty-bearing license to market the drug beginning September 1, 2015 (the launch is contingent upon Actavis receiving final approval from the U.S. FDA). Based on available information, Actavis believes it may be a first applicant to file for the generic version and, if approval is granted, could be entitled to 180 days of market exclusivity. Daytrana generated sales of $98 million in the U.S. in 2013.
At the time of this article’s writing, the author did not have positions in any of the companies mentioned