The $520 million deal Bristol-Myers Squibb signed with Sweden’s Cormorant Pharmaceuticals on Tuesday may rank as one of the smaller biotech buyouts this year. Yet it underscores the outsize effect that the field of immuno-oncology has in the market.
The main product of Cormorant, based in Stockholm, is HuMax-IL8, an antibody used against cancerous tumors. Traditional cancer treatments involve surgery, chemotherapy or radiation whereas HuMax-IL8 involves a line of treatment called immuno-oncology, which marshalls the body’s own immune system to fight cancerous cells.
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In this case it’s using a protein — interleukin-8 (IL-8), that has been employed to treat other diseases, like psoriasis and rheumatoid arthritis. HuMax-IL8 is the only one in clinical trials that targets that protein for oncology, said Amanda Micklus, a principal analyst at Datamonitor Healthcare.
The deal makes sense for Bristol-Myers, a major player in the immuno-oncology field with its market leader, Opdivo that is driving optimistic forecasts like this one from GlobalData Healthcare: The market could reach $14 billion by 2019. Such an acquisition keeps the company ahead of its competitors, mainly Merck and Roche, allowing it to invest in new treatments that combine two or more therapies, such as an immuno-oncology product like Opdivo with radiology — or, following the deal, the company could merge Opdivo with HuMax-IL8.
Bristol-Myers declined to say whether that was in their plans. But combination therapies have seen an explosion of dealmaking in the past five years with Bristol-Myers in the lead, Micklus pointed out.
“It’s a hot area within Big Pharma,” she said.
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Between 2011 and 2015, Big Pharma and Mid Pharma immuno-oncology transactions were worth $6 billion upfront, $33 billion in milestones and $46 billion in aggregate deal value, according to Datamonitor Healthcare data.
Bristol-Myers dominated the activity: Of the 50 immuno-oncology partnerships sealed by Bristol-Myers between 2011 and 2015, 70 percent (35) were aimed at evaluating a combination treatment, Micklus said.
Merck isn’t sitting idle. It’s recent alliance with Belgian biopharmaceutical company Ablynx alone was worth $7 billion.
Cormorant might have been small enough for Bristol-Myers to buy it outright instead of creating a partnership. The hope is that Bristol-Myers’ girth and experience will push the development of HuMax-IL8 and other treatments forward. Cormorant CEO Maarten de Chateau is rooting for the treatment to benefit patients
“This is what we are hoping for, but trials are needed to show it.” he said in an email.
There is reason to be hopeful because the response among cancer patients to new therapies is sparking more experiments in oncology, and moving treatment away from a one-size fits all approach, said Matthew Krummel, who was one of the first researchers to demonstrate that immune responses could be used against cancer.
That early work at U.C. Berkeley ultimately led to the development of one of Bristol-Myers drugs, Yervoy.
“You don’t find anything unless you look,” said Krummel, now a professor in the department of pathology at the University of California San Francisco. “But you don’t have a reason to look until you have a signal.”
That said, HuMax-IL8 is still in the early phase of clinical trials, which means there is a long way to go from optimism to proof, a distance that may be reflected in the size of the deal.
Bristol-Myers agreed to pay $95 million, that includes an up front payment and certain near term milestones. But the bigger pay day of up to $425 million will come Coromorant’s way “upon the achievement by Bristol-Myers Squibb of certain development and regulatory milestones,” according to a statement released Tuesday.
But a Bristol-Myers Spokeswoman declined to be more specific about what those milestones are. One of them is likely clearing FDA approval in the United States and/or among European Union regulators.
Cormorant acquired rights to HuMax-IL8 from a 2012 deal with Copenhagen, Denmark-based Genmab. Under the terms of the agreement, Genmab was entitled to milestone payments and royalties on net sales. If approved, Genmab will received a small royalty payment from Bristol-Myers Squibb.
Photo: Getty Images
[Correction: An earlier version of the story mistakenly stated that BMS would pay $95 million up front]
