Sources Reveal Tesaro is Unlikely to Find a Buyer

Sources Reveal Tesaro is Unlikely to Find a Buyer July 14, 2017
By Alex Keown, Breaking News Staff

WALTHAM, Mass. – While Tesaro has been rumored to be the target of acquisition for nearly a year, it does not appear the company is attracting much interest from buyers despite its recently approved PARP inhibitor, Zejula.

In June, BioSpace reported the company had placed itself up for sale, but even then interest was lukewarm. On Thursday CNBC, which cited unnamed sources, reported the current sale process is unlikely to result in a deal. According to the report, Tesaro’s expectations of price “were not met by the incoming expressions of interest it got from potential bidders.”

For its part, Tesaro said it did not comment on rumors, CNBC reported. No terms of any potential deal were revealed.

After CNBC’s report, shares of Tesaro dropped about 8 percent, from $139.47 to $126.30 before finally closing at $129.14. This morning the stock price is down, trading at $127.12 per share as of 9:40 a.m.

When reports of Tesaro opening itself to acquisition arose in June, some analysts suggested the company could be bought for about $9 billion. At the time its market value was about $7.4 billion, CNBC said.

While the CNBC sources did not hint at which company may have made a bid for Massachusetts-based Tesaro, earlier this year BioSpace noted that several of the larger pharma companies, such as Pfizer , AstraZeneca and Clovis Oncology , might not be interested buyers of Tesaro. The large pharma companies had two primary reasons – cost and the fact that they already have approved PARP inhibitors or have PARP inhibitors in development. PARP stands for poly ADP ribose polymerase, which is an enzyme many cancer cells are more dependent upon than regular, healthy cells are.

AstraZeneca has the PARP inhibitor Lynparza and is looking to expand its indications. Clovis Oncology has Rubraca and Pfizer gained an experimental PARP inhibitor in its acquisition of Medivation last year.

Debjit Chattopadhyay, an analyst with Janney, said in June that AstraZeneca and Pfizer are expecting expecting data readouts for their PARP inhibitors later this year. Those drugs in development “all have implications for Tesaro,” Chattopadhyay said at the time.

In March, the U.S. Food and Drug Administration approved Zejula (niraparib) for maintenance treatment of women with recurrent epithelial ovarian, fallopian tube, and primary peritoneal cancer who are in a complete or partial response to platinum-based chemotherapy. Phase III trial data showed patients with the BRCA gene had 21 months of progression free survival – 15 months longer than the control group. Additionally, patients in the non-germline BRCA mutant cohort showed progression free survival of 9.3 months, compared to 3.9 months for control.

Zejula was the first PARP inhibitor approved that did not require BRCA mutation or other biomarker testing. Zejula has been pegged as a drug with blockbuster potential, with some analysts suggesting it could generate about $2 billion in annual revenue.

In addition to Zejula, Tesaro also has the oral drug Varubi, an NK-1 receptor, which is used for the prevention of delayed nausea and vomiting associated with chemotherapy. Varubi was approved by the FDA in 2015. In January, the FDA denied Tesaro’s injectable version of Varubi, rolapitant IV. The FDA was concerned over manufacturing issues.

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