Are Gilead or Roche Interested in Buying Tesaro? Company Rumored to Be on the Market

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Tesaro, located in Waltham, Mass., is rumored to be up for sale. The rumors caused shares to rocket as much as 39 percent on Friday, but it’s not the first time rumors have floated that the company might be on the auction block. There were reports in June and July that Roche might consider buying the oncology company.

The most recent rumor came out of a Bloomberg report. Citing “people familiar with the matter,” Tesaro is reportedly consulting with financial advisers after receiving takeover interest. The advisers then began contacting other potential buyers.

“A company like Gilead that’s been expanding their oncology efforts would make a lot of sense,” David Nierengarten, an analyst with Wedbush Securities, told Bloomberg. “But at these prices, it could be just about anyone with an oncology focus looking to get a product tucked into their portfolio.”

Tesaro currently has two products on the market. Zejula (niraparib) is a poly (ADP-ribose) polymerase (PARP) inhibitor for adults with recurrent epithelial ovarian, fallopian tube, or primary peritoneal cancer who are in complete or partial response to platinum-based chemotherapy. It is also in mid and late-stage trials in lung cancer, breast cancer, endometrial cancer, Ewing’s sarcoma. The company also has TSR-042 and TSR-022 in early-age trials for a variety of cancers.

The other product is Varubi, which was approved by the U.S. Food and Drug Administration (FDA) in October 2015. It is used to treat nausea and vomiting related to chemotherapy.

On October 29, the company triggered an $18 million milestone payment from Janssen Biotech, a Johnson & Johnson company. This was related to Janssen’s ongoing GALAHAD clinical trial, which is assessing Zejula as a monotherapy for men with metastatic castration-resistant prostate cancer (mCRPC) and DNA-repair anomalies. The data is expected to be used as part of regulatory filings worldwide in 2019.

At the same time, the companies presented data from the Phase Ib BEDIVERE clinical trial at the European Society of Clinical Oncology (ESMO) showing the safety and tolerability of Zejula in combination with abiraterone acetate and prednisone (AA-P) in men with mCRPC. That data will be used to determine dosing in a future Phase III clinical that evaluating the benefit of Zejula in combination with AA-P in mCRPC.

The collaboration with Janssen was signed in 2016. Janssen holds the rights to develop and commercialize Zejula for prostate cancer worldwide except in Japan.

Although Zejula sales appear to be growing, Varubi/Varuby is dropping significantly. In the company’s third-quarter financial report on November 1, Tesaro cited $63.2 million in Zejula sales for the quarter compared to $39.4 million in sales for the same period in 2017. But Varubi/Varuby reported $386 million in sales for the quarter compared to $2.4 billion in the third quarter in 2017. 

“In the third quarter, we launched several initiatives to grow the use of Zejula for recurrent ovarian cancer and we continued to execute on our development strategies focused on gynecologic and lung cancers as we approach a period of significant data readouts,” stated Lonnie Moulder, chief executive officer of Tesaro, at the time. “Following results of the Phase III PRIMA trial next year, we intend for Zejula to benefit patients throughout all stages of their ovarian cancer journey, including first-line, recurrent, and late-line treatment settings.”

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