In a buyout that marks the latest endorsement for targeted cancer drugs—and, potentially, the increasing utility of broad cancer DNA tests—Roche this morning agreed to acquire San Diego biotech Ignyta in an all-cash deal valued at $1.7 billion.
Roche will pay $27 per share for Ignyta (NASDAQ: RXDX), a whopping 74 percent premium to the firm’s $15.55 per share closing price on Thursday. The deal has already been approved by both boards, and is expected to close in the first half of 2018. It gives Roche rights to a drug, entrectinib, currently in pivotal testing for cancers that contain specific types of genetic mutations—NTRK or ROS1 fusions.
Ignyta is one of two biotechs, along with Loxo Oncology (NASDAQ: LOXO), currently advancing similar-type drugs that aim for a tissue-agnostic FDA approval. That is, their drugs are being developed for tumors with specific genetic signatures, regardless of where in the body they form. The agency gave the first such approval earlier this year to Merck’s (NYSE: MRK) pembrolizumab (Keytruda). Loxo just began submitting an approval application this week to the FDA for its drug, larotrectinib, which targets TRK fusions, an abnormality present in 0.5 percent to 1 percent of solid tumors. In November, Bayer paid Loxo $400 million in cash for partial rights to the drug.
Ignyta could file for FDA approval of entrectinib if it comes through in a Phase 2 study testing the drug in patients with advanced non-small cell lung cancer and an ROS1 fusion. In its most recent update to the study, called STARTRK-2, Ignyta reported that 22 of 32 patients responded to treatment. In an earlier trial, STARTRK-1, entrectinib had a 79 percent response rate in patients with different solid tumors. Ignyta is aiming for a tissue-agnostic drug approval and a separate approval specifically for ROS1-positive lung cancer, and is developing a companion diagnostic for its treatment as well.
The Roche buyout comes as more targeted cancer therapies are progressing to market, and amidst a concerted push at the FDA to approve more broad diagnostics—which have struggled commercially—that can help identify the patients who might benefit from them.
The FDA in June approved a test from Thermo Fisher Scientific, Oncomine, which detects 23 genetic alterations. In November, the agency approved another tumor profiling test, Memorial Sloan Kettering Cancer Center’s MSK IMPACT, that detects mutations in 468 genes. It also unveiled a new, quicker approval path for test developers, in which products approved by a third-party reviewer—the New York State Department of Health—don’t have to undergo a separate FDA review. Three weeks ago, FoundationOne CDx, a broad cancer DNA test from Foundation Medicine (NASDAQ: FMI), became the first product of its kind to ever simultaneously get FDA approval and a coverage determination from the Centers for Medicare & Medicaid Services—a new regulatory tool meant to lead to “faster access” to such diagnostics, commissioner Scott Gottlieb said at the time. (Roche, the biggest cancer drugmaker in the world, made a substantial bet on the utility of these tests in 2015, when it acquired a majority stake in Foundation in a wide-ranging alliance.)
“Ignyta has been singularly focused on developing precisely targeted therapeutics guided by diagnostics for patients with rare cancers,” said CEO Jonathan Lim (pictured) in a prepared statement. “We are excited that Roche, the global leader in both oncology and personalized healthcare, recognizes this powerful approach and shares our passion for advancing entrectinib for the benefit of patients.”
Check out these stories for more on Ignyta, Loxo, and the steps in 2017 for precision cancer medicines.