February 16, 2016
By Mark Terry, BioSpace.com Breaking News Staff
U.K.-based Shield Therapeutics has an interesting problem. The company recently went public, raising a bit more than $47 million, less than the apparent $170 million it wanted. Yet, the company has a drug in Phase III clinical trials in Europe that looks very promising for an unmet need. So what to do? One possibility is look for a partner with money, suggests George Ronan, writing for Market Exclusive. But who?
In December 2015, Shield announced that the Committee for Medicinal Products for Human Use (CHMP) with the European Medicines Agency (EMA) had provided a positive opinion regarding the company’s Marketing Authorization Application (MAA) for its drug Feraccru (ferric maltol). Feraccru is an oral drug to treat adults with iron deficiency anemia related to inflammatory bowel disease (IBD).
“In Europe more than 2.5 million IBD patients are managed by gastroenterologists and at least 40 percent of these can develop iron deficiency anemia,” said Carl Sterritt, founder and chief executive officer of Shield, in a statement. “Oral ferrous iron preparations are often poorly tolerated, which to date has left intravenous iron infusions as the treatment option. The CHMP recommendation is an important step in bringing orally dosed Feraccru to market as an effective way of correcting anemia in IBD patients who either currently do not get treated or cannot tolerate oral ferrous iron therapy and so have to rely on the higher risk and higher expense option of invasive and resource-consuming intravenous administration of iron.”
Which all sounds good, but the company doesn’t really have the money to effectively market the drug, which is very likely to get approval in Europe. Ronan writes, “It’s a perfect window for a big pharma entity to pitch in, foot the commercialization bill, and gain rights/royalties on favorable terms. Who might bite?”
He suggests Amgen, Inc. and Johnson & Johnson might be potential partners.
Amgen has two drugs for anemia, Aranesp and Epogen, both of which are blockbusters, and both whose revenues slipped at the end of 2015. “If the company,” writes Ronan, “can fund the European commercialization of Feraccru for rights to development and commercialization of the drug in the U.S., for example, it would be a nice addition to the Amgen anemia portfolio.”
And Amgen has been rumored to be on the lookout for deals. Some analysts hope Amgen would buy big, but the company has tended to buy or license drugs in early stages of development. The Financial Times cited an unnamed inside source at Amgen who claims the company is evaluating targets in the $10 billion range and that have drugs close to market.
And it’s also been pointed out that Neulasta, Neupogen and Epotin Alfa are all facing patent expirations and competition from biosimilars and generics. The company also has about $3.2 billion in cash with an additional $2.9 billion in receivables, so a $100 million or so milestone deal might work well for both companies.
Johnson & Johnson, on the other hand, already has a deal with Amgen for a U.S. anemia drug. And J&J has $13.6 billion in cash to play with. And like Amgen, it’s facing some competition in the biosimilars market. Earlier this month, the U.S. Food and Drug Administration (FDA) indicated that South Korea-based Celltrion Inc. (068270.KQ)’s biosimilar to J&J’s Remicade was “highly similar” to the brand name drug. It seems likely the biosimilar will be approved, even though Remicade’s U.S. patent won’t expire until 2018.
Further complicating the picture is Celltrion used an argument called “biosimilar extrapolation,” which essentially takes data from a study of the drug for one or two diseases, and extrapolates its effectiveness to other conditions that the original drug is used for. In other words, Celltrion is arguing that if its biosimilar for Remicade is good to treat one disease, like arthritis, it is good to treat all of the ones Remicade is used for, including ankylosing spondylitis, psoriatic arthritis, Crohn’s disease, plaque psoriasis and ulcerative colitis.
This precedent is likely to jolt most of the industry, because it’s going to dramatically increase the competition from biosimilars across all their blockbuster markets.
