Norway's Algeta, Bayer deal on Phase III Prostate Cancer Drug

In yet another sign of Big Pharma's undying interest in promising drugs for late-stage prostate cancer, Norwegian cancer therapeutics maker Algeta reeled in Bayer to develop and commercialize its radiopharmaceutical Alpharadin in a deal worth $61 million upfront.

According to the agreement, announced by the companies Sept. 3, Algeta gets an option for up to 50 percent co-promotion and profit sharing for the first-in-class 'alpha-pharmaceutical' in the U.S. market. It stands to receive a total of $800 million when commercial and clinical milestone payments are included, plus double-digit, tiered royalties in markets outside the U.S. Algeta shares rose 60 percent on the news, while Bayer edged up by about 1 percent.

The German drug maker has agreed to foot the bill for most future development costs of Alpharadin as a treatment for bone metastases from HRPC and other cancer indications.

A formulation of radium 223 chloride, Alpharadin is in Phase III for men with late-stage, hormone refractory prostate cancer, also called castration resistant prostate cancer, with bone metastases. The injectable drug emits alpha particles that selectively target skeletal metastases with minimal damage to surrounding tissue. Currently, the only drug approved for CRCP is the chemotherapeutic agent docetaxel (Sanofi-Aventis' Taxotere and generics), so the medical need is high and several new candidates are lining up to fill the treatment gap.

Earlier this year, Johnson & Johnson snapped up the oral, Phase III abiraterone (CB7630) for advanced prostate cancer, via its nearly $1 billion planned acquisition of Cougar Biotechnology ('The Pink Sheet' DAILY, May 22, 2009). The deal would give J&J a potential blockbuster in prostate cancer to market alongside its portfolio oncologics Velcade (for myeloma) and Yondelis (ovarian cancer) company.

With the Algeta deal, Bayer will also get a shot at prostate cancer with a promising new candidate. Writing in a Sept. 1 note prior to the Algeta deal, Bryan Garnier & Co. advised investors to sell, noting that Bayer's healthcare business is over-hyped and too dependent on the oral anticoagulant Xarelto (rivaroxaban). That product received a complete response letter this spring, which could push approval out to early 2010 ('The Pink Sheet' DAILY, May 28, 2009).

"We remind investors that the company's future in healthcare essentially hinges on a single product ( Xarelto ), which bears high regulatory and commercial risk," wrote analyst Martin Brunninger. "Clearly, this product still has a long way to go before we see potential profit contribution."

Algeta CEO: Bayer deal is transformational

During a Sept. 3 investors' call, Algeta CEO Andrew Kay said Bayer was chosen as a partner based on its strong presence in oncology and successful commercialization of the potential blockbuster Nexavar (sorafenib) in patients with unresectable liver cancer and advanced kidney cancer ('The Pink Sheet' DAILY, Nov. 19, 2007).

The deal marks a "transforming moment" for Algeta as it evolves into a specialist oncology pharma company that is able to "share significantly in Alpharadin's blockbuster potential," the executive said.

Algeta said it is now in a very good financial position. In addition to the upfront payment, which was described as about average by analysts, the company has approximately $50 million in cash in its coffers.

The deal will allow Algeta to bring the drug through Phase III and to launch Phase II studies of Alpharadin in combination with Taxotere for hormone resistant prostate cancer bone metastases and in breast cancer.

"Our goal is to make Alpharadin the first choice treatment for patients with bone metastases, starting with prostate cancer, then breast then potentially lung and kidney cancer," Kay said.

It will also allow Algeta to build a commercial presence in the U.S. to take advantage of the co-promote/profit-sharing aspect of the deal, the company said.

Algeta seeks piece of multibillion dollar market

During the Sept. 3 call, Algeta said it expected Alpharadin will fetch a per patient treatment cycle price of $22,000 and reach peak annual sales of from $1.3 billion to $1.9 billion. And if the drug proves itself in Phase III, those figures do not appear to be unrealistic, based on patient characteristics and unmet need.

Conventional anti-androgen therapy can stop working after a few years of treatment, leaving a population of men whose cancer no longer responds to treatment and who have a limited life expectancy.

Taxotere is an option, but many patients are ineligible to take it, or else do not respond or tolerate treatment. In clinical trials, Alpharadin showed a better survival benefit and side effect profile than Taxotere.

Taxotere and the earlier-stage cancer treatment leuprolide (Abbott's Lupron and generics) have sold billions, commented Rodman & Renshaw analyst Simos Simeonidis. "It's definitely a multibillion market that can support multiple blockbusters," he said. "That's why everyone is so gung-ho."

Hence, Big Pharma interest has been very strong for new drugs, despite a string of Phase III failures in recent years, such as GPC Biotech's orally administered platinum-based chemotherapeutic satraplatin and Novacea's weekly formulation of Asentar (calcitrol) (In Vivo, Dec. 2007).

The bar for regulatory approval of a prostate cancer drug is high, in that officials are looking for overall survival benefit as opposed to surrogate markers or improvements in how a patient feels.

In Phase II, Alpharadin showed an overall survival benefit of 40 percent, but the first results from the Phase III Alpharadin in Symptomatic Prostate Cancer trial won't be available until October 2011.

And Algeta and Bayer could have competition. Cougar's abiraterone, a cytochrome P450c17 inhibitor that works by suppressing androgen receptor signaling, showed benefits in terms of time to prostate-specific antigen progression; research measuring its overall survival benefit is under way. Survival data for Medivation's 6MDV3100, another drug that targets androgen signaling, are also not available. That drug is being tested in a Phase I/II trial with endpoints including safety, tolerability, effects on serum prostate-specific antigen levels and disease progression.

Seattle biotech Dendreon reported this May that its prostate cancer vaccine Provenge (sipuleucel-T) yielded a 4.1 month survival benefit over placebo in the Phase III IMPACT trial. Soon after, the company raised $230 million in a public offering ('The Pink Sheet' DAILY, May 8, 2009).

- Emily Hayes ( e.hayes@elsevier.com )

This article is reprinted from "The Pink Sheet" DAILY –Sept 3, 2009

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