Tiny Parion Sciences Wrangles Lung Pact Worth $1.2 Billion From Vertex

Published: Jun 08, 2015

Tiny Parion Sciences Wrangles Lung Pact Worth $1.2 Billion With Vertex (VRTX)
June 5, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor

Boston-based Vertex Pharmaceuticals has added another weapon to its arsenal of cystic fibrosis fighting drugs, announcing Friday it $80 million for the rights to two promising drugs from tiny Durham, N.C. biotech Parion Sciences.

The drugs, dubbed P-1037 and P-1055, are epithelial sodium channel (ENaC) inhibitors that have shown some initial success in treating cystic fibrosis. It also has the option to buy a third, similar drug for an additional $230 million.

P-1037 is currently being tested as a monotherapy in a Phase IIa, but Vertex said today it hopes to combine it with its own lead candidates, ivacaftor and lumacaftor, in a combo mid-stage trial. That study will treat patients who have duplicate copies of a genetic mutation that has been linked to CF, F508del.

“This collaboration with Parion complements our ongoing work in CF and supports our two key goals in this disease – to increase the number of people eligible for new CF medicines and to enhance the benefit of treatment,” said Jeffrey Chodakewitz, executive vice president and chief medical officer at Vertex, in a statement.

“The goal of these planned studies of P-1037 is to determine whether ENaC inhibition can improve lung function in people with CF, including those with mutations unlikely to respond to treatment with the investigational combination of lumacaftor and ivacaftor. Beyond CF, this agreement helps to diversify our pipeline by providing opportunities to evaluate P-1037 as part of Phase 2a studies in multiple other diseases that impact the lungs.”

Under the terms of the deal, Vertex will also offer tiered royalties based on milestones met at the regulatory and clinical levels.

Vertex has been attempting to reposition itself as the leader in cystic fibrosis therapies, a mission that has met with mixed success. In mid-May, the U.S. Food and Drug Administration (FDA) appeared to only grudgingly approve Vertex’s drug for the disease Orkambi after leaking internal notes earlier in the process expressing concern.

That approval was “not a slam dunk” but should be enough to convince the market the treatment has some upside, analysts said of the decision on May 12. A delegation of executives of Vertex successfully argued before the FDA’s Pulmonary-Allergy Drugs Advisory Committee that Orkambi has merit, after which the panel voted 12-1 to approve the drug.

But investors who had been waiting months for the news applauded the decision, pushing Vertex up almost 9 percent in aftermarket trading the same day as the FDA’s approval.

Still, the breakdown of the vote wasn’t totally conclusive, with several analysts saying while it may be good enough for now, it was by no means a “slam dunk” for Vertex.

“The FDA panelists grilled Vertex during the Q&A session, with questions about the magnitude and meaningfulness of benefit on the primary and secondary endpoints, the quality of measurement of reduction of pulmonary exacerbations, and the contribution of lumacaftor,” wrote Geoffrey Porges, an analyst with Sanford Bernstein.

“The majority of the panelists seemed skeptical about at least one or more of Vertex's claims, but whether this means they will vote to deny a drug with some demonstrated efficacy (no matter how small), and good safety is in our view, less likely,” said Porges. “The discussion section of the meeting is now ongoing.”

But however ongoing those discussions are, today’s vote was enough to put Orkambi into the running and should be considered “general support” for the drug, wrote biotech analyst Mark Schoenebaum in a note.

“Despite the questions raised by the FDA and the panelists' willingness to consider the FDA's arguments this morning (after multiple speakers during the open public hearing), the panelists this afternoon came out in general support of Orkambi,” he wrote.

“The panelists generally agree that a comparative efficacy study of Orkambi vs Kalydeco in homozygous F508del patient could be done post-approval if necessary,” he said.

When Will Pfizer's Breakup Happen?
Speculation that the revamping of Pfizer Inc. ’s internal business structure could happen as soon as this year has biotech wondering just when this Big Pharma company could see changes.

Last week an analyst with J.P. Morgan said he thinks there will be a much faster timeline than most of Wall Street had predicted for Pfizer’s stated mission to refocus its efforts on new medicines.

Pfizer initially announced in 2012 that it would be shedding units that were non-essential to that goal. It then promptly sold its nutrition silo to Nestle for $11.85 billion, which was rapidly accompanied by a public spin-off of its animal health business for $2.2 billion.

“While a Pfizer break-up would likely be a 2017 event, we see potential catalysts in 2015-2016," said Chris Schott, an analyst at J.P. Morgan. "Three years of audited financial statements (2014-2016) are required before any part of Pfizer can be spun off, and we also see 2017 as an attractive time for action as investors see Pfizer’s innovative pipeline clearly contributing to growth and the established business having transitioned to a more stable profile."

BioSpace wants to know what you think: Will Pfizer be a changed company by the end of 2015?

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