Massachusetts' Tesaro Being Wooed by Multiple Suitors

Massachusetts' Tesaro Being Wooed by Multiple Suitors February 9, 2017
By Mark Terry, Breaking News Staff

Tesaro took a big jump after acquisition rumors. Shares traded at $162.95 on February 7 and are currently trading at $182.68.

These are not the first rumors of a Tesaro acquisition. The stock took a big jump in July 2016 when there were takeover rumors. Reportedly, Tesaro isn’t actively looking for a sale, but because of the interest, it apparently has spoken to investments banks, including Citigroup, on how best to respond to offers and to develop a strategy.

The primary interest in Tesaro is a potential new cancer drug. On December 20, 2016, the company was granted Priority Review for its niraparib New Drug Application (NDA) by the U.S. Food and Drug Administration (FDA). Niraparib is a PARP inhibitor, a new form of drug treatment. It is being evaluated for patients with recurrent epithelial ovarian, fallopian tube, or primary peritoneal cancer after response to platinum-based chemotherapy. The PDUFA date is June 30, 2017.

The drug is being evaluated in three pivotal trials. On January 17, 2017, the company announced the opening of an expanded access program (EAP) in the U.S. for the drug, for eligible women with recurrent epithelial ovarian cancer, fallopian tube, or primary peritoneal cancer. This will provide more patients access to the experimental drug.

However, on January 11, 2017, the FDA issued a Complete Response Letter (CRL) regarding the company’s rolapitant IV NDA for the prevention of delayed nausea and vomiting associated with chemotherapy. The FDA apparently requested more information about manufacturing issues. Otherwise, there were no concerns about safety or efficacy.

One rumor is that Paris-based Sanofi is in talks with Tesaro. If that were the case, maybe three times is a charm. Sanofi lost out to Pfizer 's bid for Medivation last year, and Johnson & Johnson scooped Sanofi when it acquired Switzerland-based Actelion late last month. Sanofi would not be the only company rumored to be interested in Tesaro, however. Gilead has been floated, as well as Amgen , Celgene and Pfizer.

Located in Waltham, Mass., about 300 of the company’s 430 employees are located at that location. Its first drug to be approved was Varubi, in September 2015, for nausea and vomiting related to chemotherapy. The company’s most recent CRL was for an intravenous version of Varubi.

In 2016, Tesaro inked a partnership deal with Merck & CO to evaluate Niaraparib in combination with Keytruda, Merck’s immuno-oncology therapy.

Other companies actively working on PARP inhibitors include AstraZeneca , whose Linparza for women with BRCA-positive advanced ovarian cancer, was the first PARP inhibitor to hit the market. Clovis Oncology has a PARPi, rucaparib, in mid-stage trials. And Sanofi had a PARP inhibitor that failed a Phase III trial in 2011.

To date, analysts note a gap between Tesaro’s valuation and potential acquirers’ bids. Of course, the recent stock jump closed that gap, and if Niraparib has positive trial data later this year, it would narrow even further.

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