CureTech buys back cancer drug from Pfizer for $20m

cancer

The product is now designated for diffuse intrinsic pontine glioma (DIPG), which consists of a tumor in the brain stem.

Medical industry holding company Clal Biotechnology Industries Ltd. (TASE: CBI) today announced that its CureTech subsidiary, in which it has a 53% stake, would buy back its pidilizumab cancer drug from Pfizer. CureTech actually sold pidilizumab to a company named Medivation, and when Pfizer acquired Medivation, it also acquired the drug. Pfizer carried out the commercialization agreement with CureTech, but appears to have little interest in the product, and CureTech therefore decided to buy it back and market it to a concern with more interest in the product.

The announcement had no strong effect on the Clal Biotechnology share or the company's market cap. CureTech will buy pidilizumab back from Pfizer for $20 million in milestones, and will try to find a company for which the drug will be a leading product in a deal that will generate more revenue.

CureTech plans to continue developing the drug for other oncological indications, and to create business or financial partnerships for this purpose, including with biotechnology companies.

Following the termination of its agreement with Pfizer, CureTech revised its work plan and adapted it to its volume of activity, including laying off half of its staff. The signing of the agreement also ends the guarantee provided by Clal Biotechnology for the agreement with Pfizer, and CureTech will no longer be considered an important portfolio company for Clal Biotechnolgy.

As a result of signing this agreement, Clal Biotechnology is expected to recognize a NIS 20-30 million profit in its third quarter reports, mainly because CureTech will recognize revenue that was previously postponed, and because the value of its Clal Biotechnology's guarantees for pidilizumab in its consolidated financial statements will be reduced.

Clal Biotechnology says that as of this date, the financial resources available to CureTech are not enough for clinical development of the drug. Furthermore, there is no guarantee that CureTech's development and creation of partnerships for the drug will lead to any results.

The product is likely to interest small focused companies

Sources familiar with the company say that the product is will now be designated for an orphan disease named diffuse intrinsic pontine glioma (DIPG), which consists of a tumor in the brain stem that affects mainly children. The product has achieved good results in this category. The disease is very rare, making the market very unattractive to a company like Pfizer. The path to approval for the drug, however, is likely to be shorter, and therefore to interest a smaller company focusing in the segment.

Other areas in which the product achieved good results, mainly various type of blood cancer, have become relatively crowded categories with the entry of immunotherapy technologies, mainly CAR-T, and CureTech's interest in developing the drug for this purpose has therefore waned. Medivation acquired the rights to pidilizumab for a $5 million advance and milestone payments that could reach $85 million.

The most significant amount investment in the product, however, was by Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA), which owned the rights to it in 2011-2013. Teva funded the main clinical trials of the product, but decided to waive it without payment. Further trials were funded by Medivation.

Published by Globes [online], Israel Business News - www.globes-online.com - on October 1, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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