Staff Writer

The deal step taken by Gleevec-experienced Novartis AG - probably Incyte Corp.'s most logical big-pharma partner outside the U.S. for its Phase III JAK1/2 inhibitor against myelofibrosis - may not have surprised many, but adding another, earlier-stage compound in the cMET inhibitor class made a nice bonus.

And talks are under way with other prospective partners for another JAK candidate in inflammation disorders, where Pfizer Inc. leads the charge but with more frequent dosing, said Paul A. Friedman, president and CEO of Wilmington, Del.-based Incyte.

The collaboration and licensing deal with Novartis, of Basel, Switzerland, brings $150 million up front, plus $60 million as an "immediate development milestone," with a total of more than $1 billion in payments possible over time.

"We did much better than most people assumed we were going to do," Friedman said. Joshua Schimmer, analyst with Leerink Swann, wrote in a research report that he had expected a $75 million payment up front, and called the terms "impressive."

Neither Friedman nor David C. Hastings, Incyte's chief financial officer, ventured to specify how much value was added to the deal by the oral cMET inhibitor for rheumatoid arthritis, INCB28060, ready for Phase I trials. "The deal wasn't really negotiated that way," Hastings told BioWorld Today, but the later-stage oral JAK candidate, INCB18424, obviously stands out more.

Under the terms, Incyte keeps all rights in the U.S., with Novartis to develop and commercialize INCB18424 in hematology-oncology indications outside the country, and handle worldwide development of INCB28060. With the latter, Novartis takes the helm after Phase I and gets global rights in exchange for milestone payments and royalties, with Incyte retaining an option to co-develop and co-promote.

The $60 million payment relates to the start of the European Phase III trial with INCB18424, called COMFORT II, which got under way in July.

"It took us about a year to negotiate this [deal]," Friedman explained, and the COMFORT II milestone reward was structured into the agreement before the trial started.

"For myelofibrosis, we would have partnered before initiating Phase III," but the conversations with Novartis stretched out, he said.

Bargaining "went pretty far" with other parties, but Novartis was the best choice when "looking at the totality" of factors, Friedman said - and a big part of that totality is Gleevec (imatinib), already marketed by the pharma firm for chronic myeloid leukemia.

Novartis has "demonstrated in spades" its ability to handle compounds in the space, Friedman said.

Novartis reported worldwide sales of $1.9 billion during the first half of 2009, up 15 percent from the same period last year.

Results from the U.S. Phase III trial, COMFORT I, will be presented at next year's meeting of the American Society of Hematology, "assuming enrollment for some reason doesn't lag beyond the range we have in our forecast," Friedman said, with an NDA filed around the end of next year or early in 2011.

The 24-week blinded study will give active drug to 120 people and the placebo to the same number. COMFORT II, now in the hands of Novartis, is an open-label, 48-week trial that randomizes 150 patients, 100 of whom will get the drug.

There's no approved therapy for myeloproliferative neoplasms, and Incyte's JAK inhibitor candidate is farthest along in development for myelofibrosis.

In MPNs, the bone marrow malfunctions so that blood cells are overproduced or end up in large numbers in the spleen, causing it to swell. The three main MPNs are polycythemia vera, essential thrombocythemia and myelofibrosis.

As much as 20 percent of patients with the first two types progress to the third, though patients with no history of the first two can develop myelofibrosis.

Total myelofibrosis patients number about 20,000 in the U.S. and about 30,000 in Europe, Friedman said. Pricing possibilities for the Phase III compound have not been disclosed.

INCB18424 is being developed under a special protocol assessment with the FDA which, he said, is no guarantee. "But if you don't deviate from the agreement, and there are no other therapies [on the market], I think the odds are much higher that you end up where you anticipate you're going to end up," Friedman said.

Incyte has discussions ongoing with would-be partners for once-daily INCB28050, an oral JAK inhibitor, in Phase II dose-ranging trials for rheumatoid arthritis.

To compete with New York-based Pfizer, which has reached the pivotal-trial stage with its twice-daily pan-JAK inhibitor for RA, Incyte "doesn't have the bandwidth, either financially or in terms of infrastructure," Friedman said.

"We are behind them in RA," but with a dosing advantage, he said, and "beyond RA, there are half a dozen other places" where the drug might be useful, including such ailments as Crohn's disease and ankylosing spondylitis.

Oral JAK inhibitors "are looking, again and again, in one study after another, at least as good if not better than the biologics," Friedman said. "In fact, they do look better, if you look hard at all the data." And they have the huge advantage that any side effects can be managed quickly. With biologics, "you can't get rid of them if something goes wrong," he noted.

Still, the biologics market for RA approaches $20 billion annually.

"If we got to market two years after Pfizer with no advantage, and they make significant inroads into the biologics market as everybody is anticipating they will do, then this is a several-billion-dollar product at the least," Friedman said.

Analyst Thomas J. Russo with Robert W. Baird & Co. wrote in a research report that Incyte's stock is a good buy, "worth $12 today and significantly more if things continue to go well longer term." He praised the Novartis deal, and said an agreement for INCB28050 "could be anytime," but mostly likely will happen next year.

The company's shares (NASDAQ:INCY) closed Wednesday at $8.46, up 74 cents.

Published  November 30, 2009