It wasn’t too long ago that a blood cancer drug from Infinity Pharmaceuticals was worth an up front, $275 million from AbbVie. But two years and some disappointing trial results later, Verastem has scooped it up at a fraction of the cost.
Verastem (NASDAQ: [[ticker:VSTM]]), a Boston company developing stem cell drugs for cancer, has grabbed worldwide rights to duvelisib, a drug Infinity (NASDAQ: [[ticker:INFI]]) has been advancing as a treatment for a variety of lymphomas. Verastem isn’t paying anything to Infinity up front for the right to duvelisib. Rather, Cambridge, MA-based Infinity will only get $6 million if the drug succeeds in an ongoing Phase 3 trial in chronic lymphocytic leukemia and another $22 million upon the drug’s first regulatory approval. If that happens, Infinity would also get royalties on net sales.
The Phase 3 trial, called DUO, is expected to produce data in the first half of 2017.
The tiny deal terms are not just indicative of Infinity’s struggles with duvelisib, but an indication of the declining interest in drugs that inhibit PI3 kinases, which were a hot field in biology not too long ago. Targets in the PI3 kinase pathway are implicated in a bunch of important molecular functions, like cell survival and proliferation, which is why a bunch of PI3 kinase blockers have been developed for cancer. The first generation of PI3 kinase drugs blocked the whole pathway, leading to a number of unwanted side effects, but more recent drugs, like Gilead Sciences’ (NASDAQ: [[ticker:GILD]]) idelalisib (Zydelig), and Infinity’s duvelisib, were developed more selectively—to hit certain variations of PI3 kinase instead.
Gilead paid $375 million up front for Calistoga Pharmaceuticals in 2011 to get its hands on idelalisib (Zydelig), and won FDA approval of the drug three years later. That year, AbbVie (NYSE: [[ticker:ABBV]]) paid Infinity $275 million up front for rights to duvelisib, and attached a potential $805 million in downstream payments.
Since that time, however, the field of PI3 kinase drugs—and duvelisib—have foundered, surpassed by other approaches. Ibrutinib (Imbruvica), which binds to a different molecular target, has gone on to become a massive-selling drug, and AbbVie shelled out $21 billion for partial rights to it in early 2015. In the meantime, Gilead’s drug has dealt with safety issues, and duvelisib posted disappointing results in a mid-stage trial, leading AbbVie to ditch the partnership and Infinity to cut jobs and close its research operations. And just last week, Genentech sold a PI3 kinase blocker on the verge of Phase 2 trials to Australian biotech Novogen for just $1.6 million up front.
Verastem, meanwhile, is taking a low-cost flier on a drug that at least has a shot at FDA approval. That gives Verastem, a company that has dealt with its own clinical setbacks and currently trades at just $1.27 a share, a chance to generate revenue in the near term if duvelisib comes through. (Infinity, meanwhile, closed at $1.25 a share on Tuesday.)
“While there have been significant advances recently in the treatment of lymphoid malignancies, not all patients experience benefits or can tolerate these treatments,” said Verastem chief medical officer Gregory Berk. “There remains a need for new oral medicines, and the targeted inhibition of PI3K-delta and PI3K-gamma brings a unique approach designed to address both the malignant B cell and its supportive microenvironment.”
Verastem has three other drugs in clinical testing, led by defactinib (VS-6063), which is being tested in combination with immunotherapy drugs pembrolizumab (Keytruda, from Merck) and avelumab (Pfizer/Merck KGaA) in a variety of cancers. Defactinib failed a Phase 2 trial in mesothelioma last year.
The two companies are holding a conference call this morning.
