Eli Lilly and Co.'s takeover of Colucid Pharmaceuticals Inc. for about $960 million calmed some investor frets brought on by patent rulings in the EU and led to speculation about further deals among migraine players, specifically a potential bid for Alder Biopharmaceuticals Inc., which last November started a pivotal trial with its candidate.
"The potential for the migraine space is gigantic," Alder CEO Randall Schatzman told BioWorld Today, likening the appetite to that for rheumatoid arthritis (RA). In the mid-1990s, RA – like migraine today – was mainly a generics-driven zone, worth about $300 million. "Along came the biologics, the anti-TNFs, etc., and [RA] is a $15 billion-plus marketplace today," he said.
In RA approvals, Remicade (infliximab, Janssen Biotech Inc.) was approved first. Next in line was Enbrel (etanercept, Amgen Inc.). "Enbrel didn't take a single patient from Remicade," he said. A third to appear was Humira (adalimumab, Abbvie Inc.), which "didn't take any patients from Enbrel or Remicade. It was just expanding the market along the way. I think that's what's going to happen here."
Migraine prevention at the moment is "all about drugs that have been repurposed from other indications," such as high blood pressure and epilepsy, treatments that have "lots of side effects and don't do very well," he said. In migraine, patients are overdue for something new.
Indianapolis-based Lilly agreed, paying $46.50 per share for Colucid, of Cambridge, Mass., about a 40 percent premium, in an all-cash deal that put the migraine candidate lasmiditan back in the hands of Lilly, where it was discovered. An oral 5-HT1F agonist for the acute treatment of migraine, lasmiditan was out-licensed to Colucid in 2005. Lilly didn't list pain high on its priorities back then, but research efforts since have been configured differently. The firm's pipeline includes galcanezumab, a humanized monoclonal antibody targeting calcitonin gene-related peptide (CGRP) in phase III trials for the prevention of migraine and cluster headache. Another candidate, the humanized antibody tanezumab, takes aim at nerve growth factor and is being studied in collaboration with Pfizer Inc., of New York, for the treatment of indications such as pain in osteoarthritis, the lower back and cancer.
It's CGRP that eptinezumab (formerly known as ALD403) from Bothell, Wash.-based Alder targets, too. The company late last November started PROMISE 2 (PRevention Of Migraine via Intravenous ALD403 Safety and Efficacy 2), the second pivotal phase III trial with eptinezumab. Alder is hardly alone with the mechanism; three of four CGRP programs are exploring antibodies against the ligand. Amgen Inc., of Thousand Oaks, Calif., alone targets the receptor. "We're watching the programs closely to see where there are differences when you target one way vs. the other," Schatzman said. "We think there are, simply because of the dynamics. The receptor is expressed throughout the body and you have to neutralize all of those receptors to see efficacy. We would argue that the ligand is much more restricted in its expression," which makes for a "more manageable target overall," he said.
Two months ago, Amgen and Basel, Switzerland-based Novartis AG said a high dose of the late-stage migraine prevention therapy erenumab (AMG 334) lopped off about two more migraine days than placebo from an average 8.3 monthly migraine days experienced by patients during the last three months of a confirmatory phase III trial. A low dose of the antibody improved placebo by a lesser 1.4 days. Safety was comparable to placebo. (See BioWorld Today, Nov. 18, 2016.)
The first of two pivotal phase III trials with Colucid's lasmiditan, SAMURAI, is already finished with positive results. Data readout for the second experiment, called SPARTAN, is due in the second half of this year. If SPARTAN hits the mark, a submission for U.S. approval could happen next year. In SAMURAI, lasmiditan succeeded on the primary endpoint – two hours' freedom from headache – and was well-tolerated. The randomized, double-blind, placebo-controlled, parallel-group study was designed to evaluate the efficacy and safety of 100 mg and 200 mg of the drug vs. placebo. Adverse events turned up mostly mild to moderate. SAMURAI and SPARTAN bear the same endpoints and same statistical powering. The only difference is that SPARTAN includes a 50-mg arm as well as 100 mg and 200 mg, and the study is taking place not only in the U.S. but also in the U.K. and Germany. Top-line results are expected in the second half of this year. (See BioWorld Today, Sept. 7, 2016.)
BIG, LITTLE COMPETITORS LINED UP
More than 36 million people suffer from migraine in the U.S., and lasmiditan could become a first-in-class therapy to treat migraine through a novel mechanism of action without vasoconstriction, an important feature for patients who have cardiovascular disease or are at risk for it, as well as those not doing well on current therapies.
The Lilly/Colucid transaction, expected to close by the end of the first quarter of this year, calmed some investors. Jefferies analyst Brian Abrahams noted that a patent case in Europe brought by Teva Pharmaceutical Industries Ltd., of Petah Tikva, Israel, concluded most recently (it will be appealed) by "essentially blocking" Alder and Lilly from the EU market. "The largest concern we believe weighs on Alder shares is that they could also be blocked from the U.S. market (and that potential acquirers would not step in until the U.S. intellectual property [IP] is resolved, which could [take] some time)," Abrahams wrote in a report Wednesday, reiterating his belief that Alder and Lilly could launch in the U.S. and possibly the EU if they win the appeal.
"We believe it is very unlikely Lilly would have spent about $1 billion to expand their migraine franchise with Colucid unless they were highly confident that the CGRP ligand monoclonal antibodies would have freedom to operate in the U.S. and possibly Europe – endorsing our view – and it also shows [Lilly's] willingness to invest (at least in complementary products) even before the CGRP IP situation is completely resolved," Abrahams wrote.
Alder's Schatzman said Teva held "a very broad patent in Europe, where they wanted to own all antibodies to CGRP," but the latest, to-be-appealed ruling narrowed the claim to use of the antibodies in migraine. "Today there are no read-throughs from where Europe came out or where they will ultimately get to what will transpire in the U.S.," he said.
Although researchers have known about CGRP's prospects since the early 1980s, they didn't start getting excited until Kenilworth, N.J.-based Merck & Co. Inc. started working with small-molecule telcagepant, which targeted the receptor. Merck "treated almost 11,000 patients with that drug, but ultimately had to abandon the program because they had liver toxicity issues" associated with a metabolite, he said. Developers began to explore the specificity of antibodies, which might avoid off-target biological effects, not to mention shift the treatment paradigm.
Jefferies' Abrahams pointed out "one negative for Alder [in] the Colucid acquisition." The deal "expands the breadth of Lilly's migraine franchise, and highlights the fact that as a standalone company, Alder will be competing against three much larger players with broader franchises/infrastructures in the migraine prophylaxis market."
Schatzman had an answer, saying that, "for a company like Alder, the way to play in this space is to be very well differentiated. It's really about [that] and having best-in-class properties when you go into the marketplace against the big boys." Alder's intravenous (I.V.) compound brings relief in 48 hours, data show, a finding that matters "particularly in severe patients who are having 16-20 migraines per month, if you can believe that," he said. A single treatment lasts three months in many patients and six months in a subset. "The program that is the farthest along right now is the I.V. infusion mode of administration," he said. "We've talked to thousands of patients, and about a third of them have no interest in injecting themselves," based on a positioning survey. But "there's another set of patients that would prefer the convenience of dosing at home," and Alder is exploring such options as well. "Is there a role for a further partner? Probably," he said. Europe and the rest of the world are "beyond the reach of a small company like Alder. And, as these molecules begin to permeate beyond the specialty neurology space – which is where we will start – and get into more a general practitioner-type market," the company will likely need help, he said. "We'll keep that in mind as we interact with players and see where that goes."
In the Colucid purchase, Lilly expects to recognize a financial charge of about $850 million, or about 80 cents per share, with no tax benefit as an acquired in-process R&D charge to earnings.
That means the company's reported earnings per share guidance in 2017 is expected to be reduced by the amount of the charge, but the company's non-GAAP earnings per share guidance won't change as a result of the buyout.
Goldman, Sachs & Co. is acting as the exclusive financial advisor to Lilly, and Weil, Gotshal & Manges LLP is acting as legal advisor. MTS Health Partners is acting as the exclusive financial counsel to Colucid, with Faegre Baker Daniels LLP handling the legal aspects.
Colucid's stock (NASDAQ:CLCD) closed Wednesday up 32.5 percent, or $11.35, at $46.25. Lilly (NYSE:LLY) ended at $77.53, up 68 cents. Shares of Alder (NASDAQ:ALDR) closed Wednesday at $22.60, up $1.05.