Loxo Oncology, Bayer Sign $1.55B Lucrative Cancer Pact
Tiny US biopharmaceutical firm Loxo Oncology has now partnered up with German chemical giant Bayer to commercialize two therapies for patients with genetically defined cancers in a deal worth up to $1.55B.
“This is a transformational collaboration for the company as we prepare for commercialization,” said Jacob Van Naarden, the chief business officer of Loxo Oncology. “Bayer has a history of successful co-promotion efforts with emerging biopharmaceutical companies and we are confident that their oncology team has the global reach and expertise, including an existing field force dedicated to cancer, to complement our existing commercial plans. We look forward to working with Bayer and believe that together we can bring our TRK inhibitors to more patients more quickly.”
“We see great potential in larotrectinib and moreover the follow-on compound LOXO-195 which may provide additional benefit for patients who might progress on an initial TRK inhibition therapy. These agents have the potential to fulfill the promise of precision medicine, where tumor genetics rather than tumor site of origin define the treatment approach for patients,” said Robert LaCaze, executive vice president and head of the Oncology Strategic Business Unit at Bayer.
Loxo’s medicine, larotrectinib
, grabbed the spotlight in June when researchers presented data on the medicine at the annual meeting of the American Society of Clinical Oncology showing that the medicine caused tumors to shrink in 36 of 50 patients whose tumors showed mutations in a gene called TRK. Since then, Loxo shares have increased 70%. A second drug, LOXO-195, which appears to work in patients who have been failed by larotrectinib, is also included in the deal.TRK fusions are chromosomal abnormalities that occur when one of the neurotropic tropomyosin receptor kinase (NTRK) genes (NTRK1, NTRK2, NTRK3) becomes abnormally connected to another unrelated gene, such as ETV6, LMNA, TPM3.
This abnormality leads to uncontrolled TRK signaling that, in turn, can cause cancer.
Loxo Oncology’s larotrectinib is a potent, oral and selective investigational new drug currently in clinical development for the treatment of cancer patients with abnormalities involving the TRKs.
LOXO-195 is a potent, oral and selective investigational new drug in clinical development for the treatment of patients with cancers that have obtained resistance to initial TRK treatment such as larotrectinib.
Under the terms of the agreement, Loxo Oncology will receive an upfront payment of $400 million and is eligible for $450 million in milestone payments if larotrectinib is approved and becomes marketable. If LOXO-195 is approved, Loxo stands to gain another $200 million out of the deal. Another $500 million is on the table for Loxo from sales royalties.
The company will lead global development activities and US regulatory activities, while Bayer will lead ex-US regulatory activities and worldwide commercial activities.
Loxo Oncology and Bayer will also share development costs globally on a 50 / 50 basis. In the US, where they will co-promote the products, the two companies will share commercial costs and profits on a 50 / 50 basis. Bayer will pay $25m to Loxo Oncology as a milestone payment upon attaining a certain US net sales threshold.
Outside of the country, where Bayer will commercialize the products, the company will pay Loxo Oncology tiered, double-digit royalties on net sales, and sales milestones totaling $475m.
“Bayer has a long-standing commitment to cancer research, with the goal of focusing on the advances in science that will make a real difference in patients’ lives,” said Carsten Brunn, head of Pharmaceuticals, Americas Region at Bayer. “Our new partnership with Loxo Oncology complements our existing portfolio and pipeline, and we are proud to continue to be at the forefront of the next wave of innovation in oncology with the addition of these exciting compounds.“
