Oncology powerhouse J&J ($JNJ) has stepped up with a $500 million deal to nab the commercial rights to Tesaro's ($TSRO) late-stage cancer drug niraparib, specifically carving out ownership of the drug for its growing prostate cancer franchise.
The deal, which also includes an equity investment in the company, leaves Waltham, MA-based Tesaro in control of the ongoing Phase III programs for breast and ovarian cancer. J&J is handing over a modest $35 million upfront, adding $415 million in potential milestones with a $50 million equity sweetener.
J&J gets global rights for prostate cancer, except for Japan. The pharma giant has helped change the standard of care in prostate cancer with Zytiga, and signalled its deep interest in the field back in 2013 when the company acquired ARN-509--another anti-androgen prostate cancer treatment--in a $1 billion deal to buy Aragon.
Niraparib (MK-4827) is part of the PARP inhibitor class, interfering with a DNA repair mechanism that sustains cancer cells. It may be particularly useful for patients with BRCA1 and BRCA2 mutations, as well as with combo approaches that can apply a one-two punch against cancer.
J&J's interest has been captured by evolving data that points to a complementary role for PARP inhibitors with anti-androgen drugs, Tesaro CEO Lonnie Moulder tells me this morning. That makes niraparib an ideal candidate for a J&J combination therapy.
J&J is both driving and catering to competitive pressure in the deal. Medivation bagged a PARP inhibitor for the rival prostate cancer drug Xtandi last year, inking a $570 million pact for BioMarin's late-stage talazoparib (BMN673).
J&J is a particularly attractive Big Pharma partner, given the pharma giant's aggressive development timelines for the drugs it designates as top prospects.
The deal gives Tesaro some added financial firepower, coming just after a private, $155 million raise from NEA and Kleiner Perkins. Just last fall Tesaro got a regulatory green light from the FDA to launch marketing efforts for rolapitant, its first commercial therapy now aimed at preventing some of the common side effects associated with chemotherapy.
The deal comes as Tesaro has been growing rapidly. The company staff doubled in size last year, says the CEO, who now leads a group of 300. Much of that expansion involved fielding a commercialization group. And Moulder estimates that the company will hit 400 workers by the end of this year, as it looks to deliver Phase III niraparib data that can provide an NDA for their second product launch.
"Next year with a niraparib launch, we'll increase our commercial presence 25-30%," says Moulder. "Then we'll be fully scaled for multiple products."
The biotech will also be pursuing more work on a group of new programs acquired in a deal with AnaptysBio two years ago. In that pact, Tesaro, a 2011 Fierce 15 winner, gained the rights to antibodies that target TIM-3 and LAG-3 as well as a checkpoint program for PD-1. And they grabbed dual reactive antibody candidates that target the combo targets of PD-1/LAG-3 and PD-1/TIM-3.
- here's the release