If industry watchers were amazed by AstraZeneca putting down up to $6 billion in July for a Daiichi Sankyo experimental TROP-2-directed cancer drug, they are now likely even more in awe of the size of an outright buy of the field’s first mover.
On Sunday, Gilead unveiled that it’s shelling out a whopping $21 billion to acquire Immunomedics, gaining what CEO Daniel O’Day touted as a “transformative cornerstone therapy” of the Big Biotech’s emerging oncology business—first-in-class anti-TROP-2 antibody-drug conjugate Trodelvy.
“Sticker shock,” “hefty price” and “bold step” were Wall Street analysts used to describe the move; at $88 per share, the deal price represents a 108% premium to Immunomedics’ closing price on Friday, suggestive of a highly competitive process.
Although some very early-stage assets are involved, the deal is largely centered on Trodelvy, which became the first FDA-approved anti-TROP agent in April, with an initial green light in third-line metastatic triple-negative breast cancer.
Top-line data from the confirmatory phase 3 Ascent study showed Trodelvy significantly pared down the risk of tumor progression or death by 59% over chemotherapy. Patients on Trodelvy lived a median 5.6 months without disease worsening, compared with 1.7 months for chemo. The drug also met key secondary endpoints, such as extending lives. Detailed results will be presented at the upcoming European Society for Medical Oncology virtual annual event.
Backed by its strong efficacy in TNBC, Trodelvy generated $20.1 million in its first two months on the market after its debut in April.
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“Its rapid launch in a challenging environment of a pandemic speaks to the strong science [of Trodelvy] and execution of the team,” Gilead Chief Commercial Officer Johanna Mercier said during a conference call on Sunday. According to Mercier, the drug’s penetration in the U.S.’ top 150 breast cancer accounts—the market Immuomedics is targeting—has exceeded 80% and is growing.
While studies are underway to move Trodelvy into earlier lines of TNBC treatment, the drug may have potential outside of TNBC, too; Immunomedics is looking at urothelial cancer, HR+/HER2- breast cancer and lung cancer as possible areas for expansion. The TROP-2 cell surface protein is found in more than 90% of TNBC cases, and its expression is also high in the large market of non-small cell lung cancer, at 75% among squamous cases and 64% of adenocarcinomas, Wolfe Research analyst Tim Anderson noted in a Sunday report to clients.
Trodelvy’s strong safety profile, paired with impressive efficacy, also make it a perfect backbone drug for potential combination therapy, Gilead figures. Checkpoint inhibitors and PARP inhibitors are the two pairing examples Gilead Chief Medical Officer Merdad Parsey highlighted during the call.
Still, consensus currently has Trodelvy sales peaking south of $4 billion, which doesn’t look so impressive compared with the $21 billion Gilead’s paying. But management on Sunday’s call indicated that current industry estimates might not have factored in non-breast indications.
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“We have reviewed significantly more clinical data on the product over the past several months, and it gave us greater confidence in the clinical benefits Trodelvy can offer,” O’Day said. The acquisition of Trodelvy could “substantially accelerate” Gilead’s revenue growth through the mid-2030s, Chief Financial Officer Andrew Dickinson added.
RBC Capital Markets analyst Brian Abrahams agreed. “[W]e see substantial strategic value for Trodelvy as a capstone late-stage asset laying a developmental and commercial groundwork as other pipeline products such as magrolimab (est. 2023) and partnered [Arcus Biosciences] assets launch (est. 2025+) mature,” he wrote in a Sunday note, labeling the med as a “much-needed potential revenue growth driver to Gilead in the mid-term.”
Trodelvy may be the first TROP-2 drug on the market, but it’s not the only one pursuing the field. Most notably, AstraZeneca recently expanded its collaboration with Daiichi Sankyo in a potentially $6 billion deal to work on datopotamab deruxtecan (DS-1062). That antibody-drug conjugate is behind Trodelvy in breast cancer, but it appears to be on a similar timeframe in lung, Wolfe’s Anderson noted.
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Gilead has historically been viewed as a virology giant, and its antiviral portfolio—led by HIV therapy Biktarvy—makes up the lion’s share of the biotech's total sales. But O’Day, a veteran of cancer leader Roche, has been wading deeper into oncology since taking the reins last year.
This year alone, Gilead has acquired Forty Seven in a $4.9 billion deal that’s focused on CD47 antibody magrolimab. It took a 49.9% interest in Tizona Therapeutics with a buyout option. A similarly structured deal saw Gilead acquire a 49.9% stake in immuno-oncology biotech Pionyr Immunotheraputics with the exclusive option to fold it in completely. Its $2 billion, 10-year Arcus partnership aims to develop agents against cancer targets TIGIT, PD-1 and CD73.
The Gilead-Immunomedics transaction also reflects the industry’s growing interest in antibody-drug conjugates, which use monoclonal antibodies to deliver a payload to tumor sites with specificity. Before their TROP-2 deal, AstraZeneca and Daiichi were already working on HER2-targeting ADC Enhertu. On Monday, Merck & Co. also unveiled a deal to develop Seattle Genetics’ LIV-1 ADC ladiratuzumab vedotin, paying $600 million upfront and laying down a $1 billion investment.