Eager to pump up its pipeline—and hungry for present-day sales—Bayer has taken its chance to carve a piece out of Eli Lilly's $8 billion Loxo Oncology buyout.
German drugmaker decided to take full control of two Loxo drugs: Vitrakvi, the first drug to get initial FDA approval in tumors with a particular molecular feature regardless of their location, and an experimental TRK inhibitor, LOXO-195 (now BAY 2731954). Bayer had an option on both drugs under its 2017 Loxo partnership.
Bayer announced the deal Friday, just as Lilly was wrapping up its Loxo buyout, but Lilly might have seen the day coming. In fact, in its buyout announcement in January, Lilly didn't put Viktravi front and center; instead, it spotlighted Loxo's potential first-in-class oral RET inhibitor, dubbed LOXO-292, that’s under FDA “breakthrough” designation for three indications, with an initial launch expected in 2020.
Bayer and Loxo picked up accelerated FDA approval for Vitrakvi last November as a “tumor-agnostic” therapy to treat patients with tumors with a neurotrophic receptor tyrosine kinase (NTRK) gene fusion. LOXO-195 is designed as a follow-on therapy for patients who've grown resistant to Vitrakvi or any other initial TRK therapy. Leerink Partners analyst Andrew Berens at the time projected peak sales of $700 million for Vitrakvi and another $375 million from LOXO-195.
Bayer now faces an imminent threat, though, from Roche. The Swiss drugmaker said Tuesday its potential rival entrectinib has won FDA priority review in NTRK fusion cancers—also regardless of their site of origin—and non-small cell lung cancer with ROS1 gene fusion. Roche bought its way into the field with its $1.7 billion takeover of Ignyta and its experimental drug entrectinib, soon after Bayer and Loxo partnered up in 2017.
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Roche filed entrectinib’s new drug application based on a basket of clinical trials. Integrated analysis on people with NTRK gene fusions showed the drug shrank tumors in about 57.4% of patients and that the duration of objective responses across 10 different tumor types lasted 10.4 months. In ROS1-positive NSCLC, the drug would compete with Pfizer’s Xalkori, which is approved for ROS-1 and ALK-positive patients.
For their part, at last year’s European Society for Medical Oncology meeting, Bayer and Loxo presented Vitrakvi data showing an overall response rate of 81%. Because they were studied separately in different trials, the Vitrakvi and entrectinib data are not meant for head-to-head comparison.
In addition to its experience in selling cancer drugs, Roche’s big diagnostic franchise could also come in handy when marketing entrectinib, because for these targeted therapies, patients have to be screened for the biomarkers first. Loxo has a partnership with Illumina to develop a multigene sequencing diagnostic to detect NTRK and RET fusions, while Roche has launched its own test kit to detect TRK proteins in cancer. In a statement Tuesday, Roche said it is also developing a companion diagnostic to help identify people with ROS1 and NTRK gene fusions.
Bayer has been under pressure to expand its pipeline as its top-selling drugs Eylea, an eye treatment, and anticoagulant Xarelto will go off patent around 2024. That’s why the company initiated a huge restructuring that aims to channel some resources to pharma R&D, especially for external investment like the Loxo pact.