Novartis is way late to the PD-1/L1 game, and, after its own project flunked a late-stage study, the Swiss pharma figures it needs an external candidate as belt and braces.
And if you're going to chase a saturated market, what better to license than an agent that once won the favor of another cancer mogul? So, Novartis has picked BeiGene’s PD-1 inhibitor tislelizumab, previously partnered with Celgene until its $74 billion merger with Opdivo developer Bristol Myers Squibb triggered a conflict.
For rights in major markets outside China, including the U.S., EU and Japan, Novartis is shelling out $650 million upfront and committing up to $1.55 billion in milestones, the two companies said Monday. BeiGene retains an option to help with North American commercialization.
Novartis calls tislelizumab “complementary” to its own checkpoint inhibitor spartalizumab, despite the latter's recent trial failure, and says the BeiGene med can play a key role in its PD-1/L1 combination strategy. But even if one or both of the therapies make it to market, the Swiss drugmaker will have an uphill battle against entrenched checkpoint inhibitors like Merck & Co.'s Keytruda and Bristol's Opdivo.
2 'complementary' PD-1 inhibitors
Tislelizumab was first approved in China in late 2019 as a third-line treatment for classical Hodgkin lymphoma. Last year, it added previously treated, PD-L1-high bladder cancer to its Chinese label. The drug has just won national coverage in the country for those indications.
In China, the PD-1 drug has three additional indications awaiting regulatory decisions. These are first-line squamous and non-squamous non-small cell lung cancer (NSCLC) in combination with different chemotherapies as well as previously treated liver cancer.
In November, BeiGene said its phase 3 Rationale 303 trial showed tislelizumab extended the lives of previously treated NSCLC patients when compared with the chemotherapy docetaxel. It marked the drug’s first global pivotal trial win. Its first ex-China filing is expected in 2021, though the specific indication remains unclear.
While tislelizumab is constantly touted by BeiGene as one of its R&D success stories, Novartis’ own PD-1 inhibitor spartalizumab isn’t the kind of poster child management would often highlight.
Last fall, spartalizumab failed a phase 3 first-line melanoma trial when used on top of Novartis’ own BRAF-MEK duo Tafinlar and Mekinist. At the time, Jeff Legos, M.D., Novartis’ head of oncology drug development, said the company remained committed to its PD-1 combo strategy and to spartalizumab.
But clearly, Novartis itself doesn’t see too much potential for this PD-1 latecomer: During Novartis’ most recent investor event in November, the drug wasn’t even listed among the company’s key oncology assets.
Even so, Novartis now says the BeiGene deal doesn’t mean it’s giving up on spartalizumab. Instead, as a spokesperson told Fierce Pharma, it views the two PD-1s as complementary assets.
“Our late-stage development plan for spartalizumab historically has focused on combination regimens in a limited number of indications where anti-PD-1 therapy has not yet been established as standard of care,” the spokesperson said. “BeiGene’s development plan for tislelizumab has focused on a broader set of indications as a monotherapy or in combination with standard-of-care chemotherapy, such as in lung cancer.”
Novartis will continue to run those spartalizumab studies to evaluate which combinations to take into pivotal trials, the spokesperson said, adding that none of the ongoing spartalizumab clinical trials directly overlap with tislelizumab’s programs.
An uphill fight
Even with a successful tislelizumab, though, it could be tough for Novartis to carve out share in a competitive market where Merck & Co.’s Keytruda is the clear leader and others have built their own indication fortresses.
Still, having a PD-1/L1 inhibitor is often viewed as a strategic must for Big Pharma shops, given these agents’ potential for broad combinations. In licensing tislelizumab, Novartis says it's excited about collaborating with BeiGene to “pair it with our extensive portfolio and pipeline to develop transformative combination therapies for patients,” Novartis Oncology chief Susanne Schaffert, Ph.D., said in a statement Monday.
The Swiss drugmaker could compete on pricing, too. BeiGene and other Chinese drugmakers have priced their PD-1 offerings significantly lower compared with their foreign counterparts. For example, tislelizumab first came to market at nearly a third of Keytruda’s cost after patient assistance in China.
For BeiGene, getting a partner to run ex-China commercial detail could be a wise choice. The Chinese biotech had its first U.S. approval in late 2019 for BTK inhibitor Brukinsa. Despite what analysts view as a winning clinical profile over AbbVie and Johnson & Johnson’s Imbruvica, the drug’s market performance hasn’t exactly been exciting.
In the third quarter, Brukinsa sales were $15.7 million, above consensus of $9.1 million. However, the beat was driven by roughly $10 million in sales from China since its launch in June.
Attracting Novartis adds to BeiGene’s history of foreign partnerships. In a landmark deal signed in late 2019, Amgen paid $2.7 billion to take a 20.5% stake in BeiGene and tapped the latter as its Chinese commercial manager of Xgeva, Kyprolis and Blincyto. The far-reaching deal also covers R&D efforts for 20 Amgen pipeline cancer drugs.
Tislelizumab represents the second China-made PD-1/L1 to have found major foreign partner. Last year, Pfizer invested $200 million in CStone Pharmaceuticals and licensed China rights to its PD-L1 inhibitor sugemalimab, which awaits a Chinese regulatory decision in front-line NSCLC. CStone then granted Fierce 15 winner EQRx ex-China rights.