Hot cancer drugs have driven some of the biggest biopharma deals over the last decade, and that’s certainly true of two of this year’s biggest transactions: Eli Lilly’s $8 billion Loxo Oncology buy and Pfizer’s $11.4 billion Array BioPharma acquisition.
But the science behind those mergers speaks to a much larger trend in pharma M&A—one that has spawned nearly $100 billion in deals since 2010, according to a new analysis from SVB Leerink. Almost 40% of the total value of pharma deals completed in that timeframe centered on drugs that inhibit kinases, which are proteins that are involved in cell signaling and can drive cancer, the analysts discovered.
The Loxo deal brought Vitrakvi, which inhibits the kinase NTRK, into Lilly’s product line, along with two investigational kinase inhibitors. Array offers Pfizer the BRAF inhibitor Braftovi and the MEK blocker Mektovi. Vitrakvi has the potential to bring in $1 billion in sales, some have estimated, and positive data on combination treatments with Braftovi and Mektovi have generated blockbuster hopes for those drugs as well.
With 23 new kinase inhibitors in phase 3 testing, the fast-growing class of drugs could continue to grab the M&A spotlight, SVB Leerink suggests. That interest will likely be fueled by increasing demand for the drugs, as total global revenues for the group soar from $33 billion last year to $50 billion or more by 2022, the firm predicted.
“The introduction of kinase inhibitors has changed the approach to targeted therapeutics, often providing a broader therapeutic window, with much less toxicity than conventional chemotherapy,” SVB Leerink analysts wrote in the report.
Thanks to the FDA's speedy cancer drug reviews, kinase inhibitors are making it to market lickety-split, SVB Leerink explains. Some 35% of those already approved benefited from an accelerated program that cuts review timelines by two months. A whopping 77% were evaluated under FDA’s priority review program, and some also nabbed breakthrough therapy designations. All told, the review period for kinase inhibitors has averaged just six months.
What’s more, makers of kinase inhibitors have enjoyed significant pricing power—so much so that they’ve been able to raise the list prices every year “by low-to-high single-digit” amounts, SVB Leerink said. That’s even true among highly competitive subsets of the class, including EGFR and ALK inhibitors. The price of Roche’s Tarceva, a HER1/EGFR inhibitor, for example, has risen 8% to 14% a year since 2014 and is now selling for $8,451 per month—double its initial list price.
That said, competition is one big risk, SVB Leerink pointed out. The recently developed CDK 4/6 inhibitors—Pfizer’s Ibrance, Novartis’ Kisqali and Lilly’s Verzenio—are similarly priced and labeled, the analysts wrote. Pfizer is leading the class so far due to “a perception of greater tolerability,” they said. But the company is struggling with its ALK inhibitor Xalkori, they added, as new competition from Roche’s Alecensa erodes volume.
And one risk all the kinase players are facing is that patients frequently become resistant to the drugs. “Acquired resistance has become a theme and a challenge for therapy development,” SVB Leerink said. In fact, a new class of kinase inhibitors has emerged for just that reason—including AstraZeneca’s third-generation EGFR inhibitor Tagrisso. That drug has already soared past the blockbuster barrier, with $1.4 billion in sales in the first half of this year alone, and the potential for much more, thanks to newly released positive results in lung cancer.
So which kinase is the hottest target right now? That would be Bruton’s tyrosine kinase (BTK), which has been implicated in several cancers, including chronic lymphocytic leukemia and mantle cell lymphoma. BTK inhibitors have driven four deals worth a total of $27 billion since 2010, according to SVB Leerink. They include AbbVie’s purchase of Pharmacyclics and AstraZeneca’s acquisition of Acerta. Lilly picked up an investigational BTK inhibitor in its acquisition of Loxo.
As scientists continue to build their understanding of the disease process in cancer, the innovative environment that has built the kinase-inhibitor market will only strengthen, SVB Leerink predicted. “Given the amount of investment in this area, coupled with a favorable regulatory environment, we see the renaissance in targeted oncology continuing, especially as combination strategies become a reality, a consequence of highly potent, highly selective agents that minimize off-target and overlapping toxicities at lower drug levels.”