J&J ($JNJ) knows how to do a big licensing deal with some serious short-term incentives tied to it. And that swaggering deal style was on full display this morning when Pharmacyclics ($PCYC) announced that the FDA has accepted their NDA on the closely-watched cancer drug ibrutinib, triggering a $75 million milestone payment and bringing its cash tally to $425 million.
Pharmacyclics is barreling ahead with its applications for two B-cell malignancies: previously treated mantle cell lymphoma--MCL--and previously treated chronic lymphocytic leukemia/small lymphocytic lymphoma. Those are two of the three breakthrough therapy designations the FDA handed out for ibrutinib earlier in the year, along with a pledge to speed this drug through the review process. No other drug has had three BTDs.
Dr. Urte Gayko, the regulatory affairs chief at Pharmacyclics, recently told FierceBiotech that the BTDs have had a clear impact on the biotech's regulatory schedule, shaving 7 to 9 months off of the regulatory process by allowing the use of Phase II data in the application. The speeded-up schedule allowed for a quick harvest of substantial deal cash, and is also likely to indicate that this particular therapy will be hustled along to a swift approval.
Goldman Sachs recently initiated coverage of Pharmacyclics with a peak sales estimate of $6 billion for ibrutinib. And that promise has been reflected in J&J's deal, which included at least three quick $50 million payouts before today's windfall--on top of the $150 million upfront.
Just days after Pharmacyclics signed on with J&J in late 2011, the biotech released stellar 10-month follow-up data on its BTK inhibitor from an early-stage program, showing that a total of 70% of the 61 CLL patients in the trial demonstrated a significant response, compared to 48% at the 6-month mark. Progression-free survival hit 90% at 6 months. All of the patients had failed at least two standard therapies for leukemia. The response rate in the high-dose group hit 44% and lead author Dr. John Byrd of Ohio State called the data "phenomenal."
The steady flow of cash and data has driven Pharmacyclics' shares to some impressive heights. The stock is up 68% over the past year and the biotech has a market cap of $8.17 billion.
"We are very excited to have received the official FDA acceptance of our first NDA filing for ibrutinib," said Gayko in a statement. "We look forward to continuing to work with the FDA as they complete their review of the ibrutinib application which includes the new Breakthrough Therapy Designation process."
- here's the press release
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