As the promise of immuno-oncology grows and takes a larger foothold in the realm of cancer treatment, the competition among biotech firms—both large and small—has grown tremendously. The market has been flooded with new partnerships and acquisitions, as different organizations join forces to become the first to bring the next big drug to the market. One of the latest announcements involves AstraZeneca, which is already regarded as a leader in the field of cancer immunotherapy. Recently, AstraZeneca placed its support behind cancer vaccine technology developed by TapImmune, a smaller firm that has received a great deal of attention in recent years.
The Promise of TapImmune Cancer Immunotherapies
Soon, a phase 2 ovarian cancer trial will begin using TapImmune technologies through a joint venture with AstraZeneca. The trial, which will take place at Sloan Kettering Institute in New York, focus on a combination therapy that includes TapImmune’s TPIV 200, a vaccine that bolsters T-cells to attack cancer cells, and the anti-PD-L1 antibody durvalumab manufactured by AstraZeneca. The 40 female participants all have high-grade ovarian cancer that has not responded to platinum chemotherapy, which is the current standard of care for women with advanced ovarian cancer.
In late 2015, TapImmune’s TPIV 200 received the Orphan Drug Designation from the Food & Drug Administration for the treatment of ovarian cancer. The designation means that the company will receive tax credits for its research involving the drug, and it has seven-year market exclusivity once its use is approved. The conferral of the Orphan Drug Designation recognizes the importance of developing a better treatment for ovarian cancer, which affects hundreds of thousands of women. The American Cancer Society reports that more than 21,000 women are diagnosed with the disease each year, and more than 14,000 die from it annually.
The upcoming Sloan Kettering Institute trial will look primarily at efficacy rates six months after treatment, so it is likely that TapImmune and AstraZeneca will have reports published before the end of the year or in early 2017.
The Business Side of Experimental Immunotherapies
TapImmune claims a market cap of $45 million and may be a target for many larger corporations that want to acquire a promising firm working in the field of immuno-oncology. Through this new partnership, it is possible that AstraZeneca will acquire the company and its portfolio of cancer immunotherapies. AstraZeneca, which is now valued at $76 billion, has nearly $6 billion in liquidity to acquire new firms. However, the biotech corporation would likely need to bid against several other major biotech competitors, ranging from Merck to Bristol-Myers-Squibb, as the race to bring the best immunotherapy to market continues.
In the current Biotech market where valuations seem inflated, finance experts might easily conclude that TapImmune is value priced in the current market, so it would not be surprising to see an acquisition occur at many times the stated market cap. A look at the market shows how much money is being invested in this area of research. For example, Merck recently signed a $605 million deal with cCAM Biotherapeutics, with $95 million upfront and an additional $510 million coming once certain milestones are reached. Notably, cCAM’s major immuno-oncology candidate, CM-24, is still in phase 1 trials.
Merck also recently made a deal to purchase a phase 1 drug called OTX015, a BET inhibitor, from OncoEthix for $375 million. The deal included $110 million upfront, with an additional $265 million coming after the completion of specific milestones. Merck is prepared to spend money in the arena since its PD-1 blocker, Keytruda, was approved by the FDA for use in patients with melanoma.
Investments in the Future of Cancer Immunotherapy
However, Merck is not the only company investing in the immuno-oncology sector. Johnson & Johnson recently signed a deal with Alligator Biosciences worth $700 million for a CD40 drug called ADC-1013 that is still in phase 1 trials. Similarly, Abbvie spent $665 million on ARGX-115, an Argenx drug that is still in the pre-clinical phase. Morningstar predicts that $33 billion in annual sales in the immuno-oncology market will be realized by 2022. Big pharma is more interested than ever in the acquisition of small, promising firms like TapImmune, especially now that the FDA has approved the use of two cancer immunotherapies.
TapImmune is a primary target because TPIV 200 is being tested for use in cancers other than ovarian cancer. Currently, the drug is in a phase 2 trial funded by the Department of Defense at Mayo Clinic in order to examine its efficacy in the treatment of triple negative breast cancer. This form of breast cancer is especially aggressive and resistant to treatment, which makes it a primary target among immunotherapy developers. The application of the drug represents more of a long-term investment since the study is expected to last five years. In addition to TPIV 200, TapImmune offers TPIV 100, which has entered phase 2 clinical trials for the treatment of HER2/neu breast cancer. TapImmune also has an exciting pipeline of drugs that are still in the preclinical phase.