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Pfizer Inc. (PFE) Backs Out of Funding Puma Biotechnology (PBYI) Cancer Drug Trials


7/23/2014 9:12:48 AM

Pfizer Inc. Backs Out of Funding Puma Biotechnology Cancer Drug Trials
July 23, 2014
By Renee Morad, BioSpace.com Breaking News Staff

Puma Biotechnology Inc. (PBYI) announced an amendment to its licensing agreement with Pfizer (PFE) regarding its investigational cancer drug neratinib, or PB272. If approved, the drug may be used in many early-stage breast cancer patients with the HER2 mutation.

Puma, a Los Angeles-based development stage biopharmaceutical company, is developing the oral drug to treat HER2-positive breast cancer and patients with non-small cell lung cancer, breast cancer and other solid tumors that have the HER2 mutation.

Under the terms of the amendment to the license agreement, Pfizer will no longer fund the ongoing legacy clinical trials for neratinib, leaving Puma solely responsible for the expenses accrued. This is a shift from the original agreement that specified Pfizer would fund the trials above a pre-determined limit. Furthermore, the annual royalties Puma is obligated to pay Pfizer upon commercialization of neratinib is now fixed at the low- to mid-teens. Originally, the royalty range was 10 to 20 percent of neratinib’s net sales.

“We are pleased to enter into this amendment to the licensing agreement for neratinib,” said Alan H. Auerbach, president and chief executive officer of Puma. “By assuming responsibility for the expenses associated with the ongoing legacy clinical trials, and by fixing the royalty rate for the drug at a reduced rate, we believe that we have significantly improved the potential value of the drug.”
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As a result of this amendment, Puma’s research and development expenses are projected to rise by roughly $30 million. Puma expects that a significant percentage of this amount will occur in 2014 and will decrease over time until the trials are completed.

Pfizer agreed to sell rights for the development and commercialization of neratinib in October of 2011. The original license agreement set a limit on the amount of external expenses that Puma would incur in completing legacy clinical trials for neratinib. Puma reached this limit in the fourth quarter of 2012.

Puma announced this amendment on Tuesday, the same day the company shared neratinib’s positive phase III trial test results. In these results, investigators revealed that treatment with neratinib resulted in a 33 percent improvement in disease-free survival versus placebo after adjuvant treatment with Herceptin in women with early stage HER2-positive breast cancer. Shares of Puma more than tripled after market close as investors applauded these significant trial results.

Puma said it plans to start prepping for a regulatory filing on the drug, now expected in the first half of 2015.

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