Chairman’s Address AGM April 2015 (post first Phase 2 in Rett)We continue to register a high level of interest in Neuren’s drug development programs from a range of global and speciality pharmaceutical companies. This is naturally very encouraging and potentially provides Neuren with a range of strategic alternatives, which the Board will carefully consider at the appropriate time.Shareholder Update January 2016 (post Phase 2 in Fragile X)A number of international pharmaceutical companies have expressed interest in the trofinetide development programs over the last 12 months following the release of the clinical trial results.
Chairman’s Address AGM June 2017 (post paediatric Phase 2 in Rett)Following the announcement of the Rett syndrome study results in March, Neuren has continued to receive a wide level of interest in the trofinetide programs from pharmaceutical companies around the world.Finance News Network Interview 2 April 2019Jessica Amir:
And just lastly, Richard, before we let you go, is there anything else you wanted to add today?Dr Richard Treagus:
We certainly look forward to updating our investors in the coming months in terms of our progress with our partnering discussions around the world with Japanese and European partners. I think that's important. As well as our progress with our second drug compound. And as we move forward, closer to the commencement of Phase 3 in the second half of this year, I think there will certainly be a better understanding and appreciation of the value within Neuren.
Chairman’s Address AGM May 2019In February, we appointed Torreya, a global investment bank specialising in life sciences, as Neuren’s corporate advisor. Our objective is to evaluate all potential corporate transactions, be it for individual products, defined territories, or Neuren’s entire business. A formal process commenced in April and we are well advanced in terms of engaging with third parties in the US, Europe and Japan. Our expectation at this stage is that the process will complete in Q3 2019.Comment from AGM seanc(RT)
says there is strong interest from the Japanese.Comment from AGM silentypeNEU initiated the negotiations with Acadia as they were fielding calls from other interested partners and Acadia had rights for first offer and exclusivity of 3 months.I also noted that he mentioned Japan & Europe a lot….
As can be seen from the above, Richard Treagus has made it clear that there’s been international pharma interest in trofinetide since at least 2015. Specific mention of potential European and Japanese partners and an outcome in (approx) Q3 was first made in early April, two months after Torreya was engaged.
I can certainly understand why a Japanese pharma might be interested in trofinetide.
Japanese pharma are under enormous pressure to add innovative drugs to their domestic pipelines and overseas-derived revenues to their balance sheets.
This is because Japan has the problem of an ageing population, with associated high health costs, but a declining population to pay for it. In an attempt to rein in ballooning costs, the Japanese government has forced a rapid and sharp increase in generics penetration and introduced biennial price controls on drugs. The government has simultaneously tried to foster more innovation by providing development, regulatory and marketing incentives to pharma through schemes such as orphan drug designation and breakthrough drug designation (Sakigake). Drugs approved under these schemes command a pricing premium.
Japanese pharma have typically relied heavily on domestic markets and long-listed, branded drugs for their income, and these have been hardest hit by the government measures. Japanese pharma have responded in three key ways. Firstly, they are focusing their R&D resources on core therapy areas of high global unmet need - regenerative medicine, oncology and CNS are the most popular areas. Unmet need = pricing premium. Secondly, they are exploiting the government incentives designed to boost innovative products. Thirdly, they are focusing on growing long-term global revenue.
But while Japanese pharma may be comfortable with developing and marketing assets within Japan or perhaps within the Asian region, they often need help in the US or Europe. Here they strategically invest in licensing and M & A, leveraging local resources and expertise.
Mitsubishi Tanabe, in its latest earnings call, reflects this approach
….we will continue to invest into R&D, mostly centering around the global development, and this is approximately JPY 80 billion per year. And we also have allocated strategic investment worth of JPY 300 billion (AU$4 bn) in order to capture opportunities for M&A and in-licensing.It is possible that a Japanese pharma might be happy, post the Acadia deal, to take over Neuren’s stake in trofinetide in the US, for the very same reason that Acadia might have limited interest in ROW rights at this stage of its development. Nuplazid is only approved in the US. Acadia doesn’t have regulatory expertise or an established sales force in either Europe or Asia.
Acadia refers to this challenge of ex-US jurisdictions in its latest Annual Report
We will be required to comply with different regulations and policies of the jurisdictions where we seek approval for our product candidates, and we have not yet identified all of the requirements that we will need to satisfy to submit NUPLAZID for approval for other indications or in other jurisdictions or to submit trofinetide for approval for Rett syndrome. This will require additional time, expertise and expense, including the potential need to conduct additional studies or development work for other jurisdictions beyond the work that we have conducted to support our NDA submission in PD Psychosis. In addition, strategic considerations need to be taken into account when determining whether and when to submit NUPLAZID for approval in other jurisdictions. For example, in the fourth quarter of 2016, the European Medicines Agency, or EMA, approved our proposed pediatric investigation plan related to our planned submission of a marketing authorization application, or MAA, for NUPLAZID in Europe. However, in light of our continuing clinical development of pimavanserin in indications other than in PD Psychosis, and the timelimited data exclusivity currently granted by the EMA that commences on first approval of a product in Europe, we deferred submission of the MAA and we do not yet have a revised estimate of when we will make that filing.Possibly, from the perspective of a Japanese pharma (or a European one), Neuren has already done the hard work in the US by negotiating a North American license for trofinetide with Acadia. Acadia is using its resources and expertise to execute US clinical trials, registration and marketing for trofinetide. Provided it successfully clears the final hurdles of Phase 3 and FDA approval, trofinetide provides the potential for substantial foreign income - US$105 million from development milestones (Rett and Fragile X) and a further US$350 million in sales milestones. If both indications are approved in the US, Neuren says it expects all of these payments will be collected. Add to that a double digit percentage royalty stream payable on North American sales of trofinetide in all indications.
In Japan, a Japanese pharma seeking to have trofinetide approved would have the benefit of expertise in its own domestic regulatory process, free access to the US regulatory package for trofinetide and an already allowed patent. In addition, it could benefit from the priority consultation and review, discounted regulatory fees and pricing protection offered to orphan drugs in Japan.
Just food for thought – a sale of all trofinetide rights, as suggested by Taureanbull.
By the way, when I posted about
potentially interested Japanese pharma last month, I missed mention of Chugai, a Roche Japanese subsidiary. It’s a $36bn market cap company in its own right and has a
substantial neurology portfolio.
(20min delay)