Tripaces, thanks for getting that perspective from Joe Dillon.
I agree with Dillon on the likely consequences of the change in cash repatriation laws – that is, that this will most likely drive up deal numbers and lead to steady upward growth in deal values rather than trigger a sudden, sharp jump in deal values. It would be naïve to think that pharma will suddenly feel inclined to throw double the dollars at a deal just because they’re flush with cash.
My view is that political and tax uncertainty over the course of 2016 and 2017 influenced pharma to hold back on deals. This was reflected in a decline in deal numbers. With more certainty now, I would expect an uptick in deal numbers this year. I would also expect deal values to be relatively healthy as a result of increased competition for deals as well as pharma’s improved cash position. Also, deal values may be strengthened by a decrease in supply of assets, as there is a high current availability of venture capital (venture capital invested more money in biotechs in the first two months of this year than in any entire year up to 2014). Biotech deal values are typically lower during periods of capital restriction as pharma exploits biotechs’ weakened bargaining position.
With respect to Joe’s comments on pharma’s likely level of interest in Neuren, what he says makes sense to me.
Is there pharma interest in Rett Syndrome? Based on what pharma has publicly said that it wants, I have no doubt. Will pharma look at competing assets? Of course they will. Closely. You can read about the current competition here and here. Is Neuren’s data good enough to do a deal now or would a partner be wise to wait for better data with this asset or for another asset altogether? Well that’s the key question which has been debated here for some time.
In March, Neuren Pharmaceuticals reported that trofinetide had significant clinical benefit in their Phase 2 clinical trial in girls with Rett syndrome aged 5 to 15. Clinical improvements of approximately 15% from baseline were observed, and Rett syndrome physicians believe these to be clinically meaningful, particularly in a short duration trial…. The highest dose of trofinetide achieved statistically significant clinical benefit compared with placebo for each of three syndrome specific efficacy measures, the Rett Syndrome Behavior Questionnaire (RSBQ), the Clinical Global Impression of Improvement (CGI-I) and the Rett Syndrome Domain Specific Concerns. Physicians and caregivers saw real change in girls receiving the highest dose — to reiterate, the data was statistically significant and clinically meaningful. And furthermore, rather than simply addressing isolated symptoms, there was strong evidence that the high dose of trofinetide showed improvement across multiple symptoms, indicating that trofinetide has the potential for disease modification. A “disease modifying therapy” means that a drug can modify or change the course of a disease. This could be a real game changer for Rett syndrome.
But that said, pharma will always seek to mitigate risk (of failure in Phase 3 or NDA rejection by the FDA) which means that if there is a deal at this stage, it’s likely to include success-contingent milestones.
NEU Price at posting:
$3.10 Sentiment: Hold Disclosure: Held
(20min delay)