July 1, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Waltham, Massachusetts - Tesaro (TSRO) took a massive jump this week, rocketing from $37.21 on June 28 to a current share price of $81.19.
The rise is likely the results of a June 29 announcement that its Phase III clinical trial of niraparib met its endpoints of progression-free survival (PFS) in patients with ovarian cancer. Niraparib is an oral, once-daily PARP inhibitor currently in three clinical trials.
“We are extrem/ely grateful to the patients, caregivers, and investigators who participated in the NOVA trial,” said Mary Lynne Hedley, president and chief operating officer of Tesaro, in a statement. “The results of this study, which is the first successful, prospectively designed, randomized, well-controlled Phase III study of a PARP inhibitor, demonstrate that a single, daily, oral dose of niraparib is superior to control in prolonging PFS in women with recurrent ovarian cancer.”
In addition, the company announced about $300 million in common stock for the public yesterday. That offer is expected to close around July 7.
In a note to investors, Leerink upgraded its price target to $95 from a previous estimate of $65. It reaffirmed an “outperform” ranking, saying, “Nova’s results were as close to a Best Case scenario as it gets.”
PARP inhibitors are a possible new class of oncology drugs and have breakthrough potential, although so far none have made it to the market. Tesaro is at the head of the pack, which also has the potential of making it an acquisition target for larger companies such as Gilead , Amgen , Celgene or Pfizer .
Nida Ahmed, writing for Bidnessetc., says, “Tesaro, however, seems to be a perfect fit for Medivation , which is facing takeover threat from Sanofi . Tesaro’s addition will not only expand Medivation’s portfolio of cancer drugs, raising its potential dominance in the area of PARP inhibitors, but will also play a significant role in thwarting Sanofi’s takeover advances. Tesaro’s acquisition will make the cancer biotech unaffordable for Sanofi. Medivation’s market capitalization value would increase up to $19 billion if it acquires Tesaro.”
Medivation’s own late-stage drug, talazoparib, is also a PARP inhibitor being tested in patients with the BRCA gene mutations. Sanofi has been involved in a hostile takeover attempt of Medivation, and Medivation has been resisting, trying to convince investors they should hold out for a better offer than Sanofi’s bid, which is around $9.3 billion. The promise shown by Tesaro, whether there was any kind of merger with Medivation, would seem to support Medivation’s argument that there would be greater shareholder value by holding tight.
Or as Fortune’s Sy Mukherjee writes, “Now that Wall Street is waxing optimistic about a class of cancer drugs which encompasses one of Medivation’s main late-stage candidates, there’s a distinct possibility the biotech’s shareholders will take a moment to see what other kinds of offers may come to the table.”
