Shifting Prostate Landscape Underpins Sanofi's Medivation Offer

| About: Sanofi (SNY)

The expectation of seismic shifts in the treatment landscape for prostate cancer that will favor Xtandi in the coming years is presumably the single biggest plank underpinning Sanofi’s (NYSE:SNY) $9.3bn unsolicited offer for Medivation (NASDAQ:MDVN).

Although Xtandi’s expansion into breast cancer, and Medivation’s only other late-stage asset, the PARP inhibitor talazoparib, will also be important considerations, arguments over the future trajectory of Xtandi in prostate cancer will likely determine the outcome of this approach and indeed the success of any resulting acquisition (see tables below).

Medivation developed the androgen receptor blocker and, by virtue of having retained US co-commercial rights, still holds a major economic interest in this blockbuster alongside its global partner Astellas (OTCPK:ALPMY).

Xtandi is approved for the treatment of men with metastatic castration-resistant prostate cancer (mCRPC), either before or after the use of docetaxel chemotherapy. Its approved uses thus exactly mirror those of its arch-rival, Johnson & Johnson’s (NYSE:JNJ) Zytiga. Arguments whether to use Xtandi or Zytiga in these patients have focused on marginal differences in efficacy coupled with Zytiga’s requirement for co-administration with prednisolone.

Massaging the figures

However, Evaluate Pharma consensus data suggest that global Xtandi sales will this year surpass those of Zytiga for the first time, and continue to grow strongly to 2022. Meanwhile, Zytiga has effectively reached its peak and will see year-on-year declines from 2018, presumably as J&J switches attention to its follow-up compound, apalutamide (JNJ-927), and as generics appear.

Global sales ($m)
Product 2015 2016 2017 2018 2019 2020 2021 2022
Zytiga 2,231 2,304 2,373 2,167 1,950 1,831 1,489 1,068
Xtandi 2,089 2,933 3,638 4,283 4,920 5,551 6,163 6,776
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Click to enlarge

But the prostate cancer landscape is also fast changing, and Sanofi might not believe that this is adequately reflected in sellside models. The field has already just undergone one seismic shift, courtesy of a large academic consortium-sponsored study, Stampede, which established that docetaxel given when patients are still hormone sensitive could confer a 10-month survival advantage.

Thus hormone-sensitive patients are now seeing Xtandi or Zytiga later on. However, docetaxel could be the first of a number of agents that move to or are introduced in hormone-sensitive prostate cancer (HSPC), based on the outcomes of various trials. Earlier use should spell a longer duration of treatment combined with larger patient numbers.

Xtandi is in five phase III trials that could broaden or advance its use in prostate cancer, the first of which, Preside, could make a useful addition, though its commercial considerations are likely to be modest.

The first trial that could materially change Xtandi’s prospects is likely to be Prosper, in non-metastatic CRPC. This study has the key advantage of allowing use ahead of Zytiga, but it does not read out until after two studies for competing products in the same setting.

These are the Spartan study of J&J’s apalutamide, which is due to complete in December, and the Aramis study of Bayer’s (OTCPK:BAYRY) androgen receptor blocker BAY1841788, in March 2018.

The Arches, Embark and Enzarad trials probably have the most potential to move Xtandi by defining its use in metastatic and non-metastatic HSPC and as adjuvant therapy with radiotherapy.

Xtandi: current phase III studies
Study Patients Design Setting Trial ID Data
Preside 650 docetaxel +/- Xtandi-experienced, chemo naive mCRPC, treatment beyond progression NCT02288247 Jan 2018
Prosper 1,560 vs placebo chemo/AR inhibitor naïve non-metastatic CRPC NCT02003924 Jun 2019
Arches 1,100 ADT+/- metastatic HSPC NCT02677896 Apr 2020
Embark 1,860 Leuprolide+/- Non-metastatic HSPC NCT02319837 Dec 2020
Enzarad 800 vs ADT localised HSPC, adjuvant to RT NCT02446444 Sep 2021
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Click to enlarge

Of course, Medivation only receives ex-US royalties and US co-commercialization revenues from Astellas, although these have a high margin. These totaled just under $700m last year and are expected to grow to around $2.3bn in 2022.

But Sanofi must be looking beyond banking royalty checks and being the junior partner to Astellas in US sales and marketing. Perhaps it will seek to renegotiate the agreement with Astellas after the acquisition, to allow it to participate to a greater extent in global Xtandi sales and achieve economies of scale for the rest of its oncology business.

Sanofi’s flagship oncology product is the rather tired-looking docetaxel follow-up Jevtana, indicated for second-line use in mCRPC. This product has been marginalised by the later use of docetaxel following the success of Xtandi and Zytiga.

Sanofi’s lack of oncology focus in the early part of this decade meant a failure to invest in Jevtana, which is in just one company-sponsored phase III study, Firstana, in chemo-naive mCRPC. This is due to read out later this year, and while it could show an advantage over docetaxel this might be moot after Stampede.

Sanofi recently revealed plans to start a phase III trial for isatuximab in multiple myeloma, having previously said it wanted to establish a partnership to develop this asset given the fierce competition in this haematology-oncology space. If nothing else, this and today’s approach for Medivation shows a new-found confidence to create an oncology franchise, something Sanofi has historically had but somehow lost along the way.