April 24, 2017
By Mark Terry, BioSpace.com Breaking News Staff
If Gilead Sciences’ management should ever be at a loss as to who the company should buy, there are plenty of investors and analysts willing to offer suggestions Incyte Corporation has always been at the top of the list, at least until the company’s baricitinib for rheumatoid arthritis was rejected by the U.S. Food and Drug Administration (FDA) last week. Despite that, it’s probably still at the top of the list. Others frequently cited include Kite Pharmaceuticals, Vertex Pharmaceuticals, Puma Biotechnology, Portola Pharmaceutical, and Arrowhead Research Corporation. One ambitious suggestion was Celgene
Todd Campbell, writing for The Motley Fool, produces yet another suggestion—NewLink Genetics.
The primary reason everyone wants Gilead to buy something is because the company’s dominant hepatitis C (HCV) franchises are dwindling because of competition and its own success—it essentially cures the disease. That causes the patient pool to be smaller. And AbbVie and Merck & Co. now sell competing drugs with similar cure rates at a lower price, which has made Gilead cut its own prices to stay competitive. As a result, worldwide sales in 2016 dropped 7 percent and net earnings plunged 18 percent.
So what’s the deal with NewLink Genetics?
Located in Ames, Iowa, NewLink focuses on immuno-oncology. On April 4, the company announced interim results from a Phase II trial of indoximod in combination with checkpoint inhibitors to treat advanced melanoma. In combination with Merck (MRK)’s Keytruda (pembrolizumab), indoximod showed a 52 percent overall recovery rate (ORR) and a 73 percent disease control rate (DCR).
“These data are impressive and demonstrate the potential of this combination to improve response rates of the currently available therapy for patients with advanced melanoma,” said Yousef Zakharia, assistant professor of Medicine, Division of Hematology, Oncology and Blood & Marrow Transplantation at the Iowa and Holden Comprehensive Cancer Center, in a statement. “Importantly, our combination therapy was well tolerated without an appreciable increase in toxicity.”
For its part, although Gilead has made attempts to grow its oncology pipeline, it’s had relatively little success. Campbell writes, “Assuming Gilead Sciences remains committed to cancer, I think they ought to focus on acquiring companies working on next-generation cancer fighting drugs, such as IDO inhibitors.”
Incyte’s epacadostat is an IDO inhibitor. So is NewLink’s indoximod and GDC-0919. But NewLink is a lot more affordable than Incyte.
Campbell writes, “Despite the solid showing (of indoximod), many industry watchers believe that apacadostat delivers a better blend of efficacy and safety because it targets IDO directly. Unlike epacadostat, indoximod disables IDO via cell signaling. While it’s true that indoximod might not be as robust of an IDO-inhibitor as epacadostat (no head-to-head studies are planned, nor are they likely to happen), NewLink’s GDC-0919 does work similarly to epacadostat, and results are expected later this year from an early stage trial that’s being conducted with collaboration partner Roche Holdings in patients with solid tumors.”
Incyte’s market cap is $24 billion. NewLink’s is only $537 million. And NewLink has two IDO inhibitors. Campbell writes, “I feel like it’s a bigger bargain. If Gilead Sciences were to make this deal, it would take on the risk of trial failures. It would also have to share GDC-0919’s success with Roche. Nevertheless, at this price, I’d be willing to accept those trade-offs.”
