Loxo Oncology Inc. wasn't actively seeking a partner for its two most advanced contenders for the treatment of a rare type of genetically defined cancer but, given the opportunity to nail down a potential $1.55 billion deal with Bayer AG, "we saw the financial and strategic rationale," Jacob Van Naarden, Loxo's chief business officer, told BioWorld. Acting fast, a small team moved to secure it. Now the global deal, covering larotrectinib and LOXO-195, small-molecule candidates that target abnormalities involving tropomyosin receptor kinases (TRKs), could turn out to be transformational for the Stamford, Conn.-based company, he said.
Van Naarden called the agreement a win for Loxo's two most important stakeholders – patients and investors. "With a larger company at our side, we have the ability to bring this drug to more patients more quickly," he said. That could especially help on the commercial side, where Bayer already markets products to oncologists treating patients with tumor types in which TRK fusions – the molecular feature by which both drugs are targeted – are found, such as colon and thyroid cancers, he added.
Next month, at the American Society of Hematology, Loxo and academic collaborators will present an abstract regarding TRK fusions in hematologic malignancies.
In addition, Van Naarden noted that Bayer is one of very few large global pharmaceutical companies that have successfully engaged in more than one oncology co-promotion deal, most notably launching Nexavar (sorafenib) with Onyx Pharmaceuticals Inc. and Xofigo (radium Ra 223 dichloride) with Algeta ASA. The Berlin-based giant later went on to buy Algeta. (See BioWorld Today, Dec. 20, 2013.)
According to terms of the latest deal, Loxo will receive a $400 million up-front payment and is eligible to receive up to $450 million more in milestone payments for larotrectinib regulatory approvals and sales. It could earn up to an additional $200 million in potential milestone payments by achieving regulatory approval and sales goals for LOXO-195.
Loxo will lead global development activities and U.S. regulatory activities for the programs. Bayer will lead ex-U.S. regulatory work and worldwide commercial efforts. The companies will evenly split development costs and U.S. commercial costs and profits. Bayer will pay Loxo a $25 million milestone upon achieving a certain U.S. net sales threshold.
Outside of the U.S., where Bayer will commercialize any resulting products, it will pay Loxo tiered, double-digit royalties on net sales, and sales milestones totaling $475 million.
Larotrectinib, also known as LOXO-101, has fared well in limited testing. In an analysis of 55 RECIST-evaluable adults and children with TRK fusion, it has demonstrated a 75 percent independently reviewed confirmed overall response rate (ORR) and an 80 percent investigator-assessed confirmed ORR, across many different types of solid tumors, the company said. It has also received special regulatory recognitions in the U.S., attaining breakthrough status for unresectable or metastatic solid tumors with NTRK-fusion proteins in adult and pediatric patients who require systemic therapy and who have either progressed following prior treatment or who have no acceptable alternative treatments; a rare pediatric disease designation for infantile fibrosarcoma; and orphan status for both the treatment of soft tissue sarcoma and the treatment of solid tumors with NTRK-fusion proteins.
Submission of a new drug application for larotrectinib is expected by year-end 2017 or early 2018, with submission of a marketing authorization application expected in Europe later in 2018. (See BioWorld, June 7, 2017.)
As Loxo's founder, president and CEO, Joshua Bilenker, described earlier this month, the pairing of larotrectinib and LOXO-195 could prove to be advantageous. "In some cases, but not all, it is possible to understand why a tumor progressed in the presence of an inhibitor that was once working," he said. "It is unusual for the same company to have both a first-in-class compound and a next-generation solution for resistant patients. It is also unusual for the two compounds to be this close together in terms of development timeline."
Robert LaCaze, Bayer's head of Bayer's oncology strategic business unit was unavailable to comment on the deal Tuesday.