Tesaro rode the clinical success of a cancer drug called niraparib (Zejula) to a three-fold increase in value over the past year. Today it’s cashed in the drug again, striking a licensing deal with Japan’s Takeda Pharmaceutical.
Takeda is paying Waltham, MA-based Tesaro (NASDAQ: TSRO) $100 million up front for the rights to niraparib in Japan for all cancer types. Takeda also receives rights to the drug for all tumor types, except prostate cancer, in South Korea, Taiwan, Russia, and Australia. Janssen Biotech previously had worldwide rights to the drug in prostate cancer everywhere but Japan. The once-a-day pill is currently approved for ovarian cancer, but is being tested in a variety of other cancers as well.
Takeda will bear the costs of developing and commercializing niraparib in the countries where it holds the rights to the drug. Tesaro could get up to $240 million more from the deal if the drug hits certain milestones, and stands to earn royalties from Takeda’s sales of the drug.
Tesaro’s stock price rose to about $130 per share on the news; that’s up from $46 in May, shortly after the the company launched sales of niraparib in the U.S.
The deal brings Takeda partial rights to what’s known as a PARP inhibitor. PARP, short for poly (ADP-ribose), is an enzyme that tumors use to repair damage to their DNA. When the FDA gave the nod to niraparib in March as a maintenance therapy for women who have recurrent ovarian cancer, the Tesaro drug became the third treatment approved by the regulator that targets PARP. These drugs have generated a lot of interest because of their potential to possibly treat many cancers, and possibly boost the power of immunotherapy drugs. Tesaro’s drug, for instance, is being tested in breast and lung cancer and is also advancing in combination studies with Merck’s (NYSE: MRK) immunotherapy pembrolizumab (Keytruda).
The other two approved drugs in this class, rucaparib (Rubraca) from Boulder, CO, biotech Clovis Oncology (NASDAQ: CLVS), and AstraZeneca’s (NYSE: AZN) olaparib (Lynparza), need a companion diagnostic to test whether the patient’s tumors have the genetic mutations that indicate the drugs would work. Tesaro’s drug was the first to win the FDA’s approval without requiring such a test. AstraZeneca’s drug, however, could soon become the first of the group to win approval in breast cancer. In June, the company reported Phase 3 clinical trial data showing that its drug reduced worsening of the disease or death by 42 percent.
Photo by Tesaro.