Gloucester Pharmaceuticals promised a deal by the beginning of next year and today delivered early and in style with a takeover offer worth up to $640 million from Celgene (CELG).
Speaking last month to EP Vantage, Alan Colowick, Gloucester's chief executive, said that a sale of the privately-held company was very much part of the strategic review of options following the approval of Istodax, a treatment for cutaneous T-cell lymphoma (CTCL), and that there were a number of interested parties circling (EP Vantage Interview – Gloucester weighs multiple options for future, November 26, 2009).
As Istodax is the only product in Gloucester’s pipeline, Celgene’s acquisition is ostensibly about the potential it sees in the drug, which has demonstrated impressive sustained response in CTCL trials and is also showing notable results in related peripheral T-cell lymphoma (PTCL).
Sewing up the market
By buying Gloucester, Celgene extends its own blood cancer franchise, which is underpinned by multiple myeloma treatment Revlimid and Vidaza, for myelodysplastic syndrome. The group might also strategically be hoping to pitch Istodax as a direct competitor to Allos Therapeutic’s (ALTH) Folotyn, which recently won approval in refractory PTCL.
With the backing of Celgene, Istodax could take market share from Folotyn if approved in this indication. Pivotal trials have started in PTCL and a sNDA is expected to be filed sometime next year. The fact that Celgene, which has $2.76 billion in cash, decided to buy Gloucester over Allos, which has a market value of $688 million, also indicates that, for whatever reason, Celgene believes Gloucester is a more attractive bet.
While the sum Celgene has paid for an essentially one-product company looks impressive, it reflects what many see as a big opportunity in these two hard-to-treat blood cancers. Celgene has also hedged its risk by providing $340 million upfront with the remaining $300 million being dependent on future regulatory milestones.
What might have lifted the price is that Glocester had ensured it was well funded ahead of any negotiations, having raised $29 million from its five investors, a sum that would have lasted it through to the end of 2010 and has almost certainly strengthened its hand in negotiations. Gloucester investors, who between them have pumped about $100 million into the company since its inception only six years ago, will be pleased with the outcome.
As for what Celgene gets for its money, other than a drug approved in CTCL and a possible supplemental approval in PTCL in late 2010 or early 2011, are Istodax’s other potential indications.
Trials in multiple myeloma in combination with Velcade and dexamethasone are also under way and have shown impressive response rates, and the drug is also being developed in solid tumours with non-small cell lung cancer the most advanced treatment. With Celgene now in the driving seat, phase II research projects in renal, prostate and pancreatic cancer that had been put on ice as Gloucester conserved its cash might be reactivated.
What also might be reactivated is interest in histone deacetylase inhibitors (HDACs), given Celgene’s very public and lucrative endorsement of this still relatively novel technology.
Istodax is only the second ever HDAC approved, but an analysis earlier on in the year by EP Vantage showed that there are numerous products in development and many of them still in the hands of small companies (Therapeutic focus - HDAC inhibitors gathering evidence of broader utility, September 11, 2009).
Groups such as TopoTarget and 4SC, who have un-licensed phase II products, may now find it slightly easier to find a partner for their drugs. Pharmacyclics, which has presented exciting phase I/II data at this week’s American Hematology Society for its oral pan-HDAC inhibitor, PCI-24781, in patients with relapsed/recurrent non-Hodgkin’s Lymphoma, is almost certain to be a recipient of attention in the future thanks to the Gloucester deal.