Johnson & Johnson has bolstered its cancer pipeline with the addition of a new experimental candidate, PCI-32765. The concerns over the contract manufacturer of Doxil are expected to affect availability of the drug in the US.
IHS Global Insight Perspective | |
Significance | US firm Johnson & Johnson's (J&J's) deal with Pharmacyclics involves just one cancer candidate drug, but with potential for several indications, including non-Hodgkin's lymphoma, chronic lymphocytic leukemia and multiple myeloma. The agreement value for Pharmacyclics is close to USD1 billion. |
Implications | The licensing deal will enhance J&J's oncology therapy pipeline and the commercial potential of the drug, which could be viewed as a blockbuster. |
Outlook | The Doxil supplier concerns will affect availability and revenues from the drug for J&J. The licensing deal with Pharmacyclics will boost J&J's medium-term revenues from the oncology segment. |
J&J Licensing Deal
US pharma major Johnson & Johnson's (J&J's) unit Janssen Pharmaceuticals has entered into an agreement with Pharmacyclics to develop and market the investigational compound PCI_32765 jointly. The product is an oncology candidate that is currently undergoing Phase I and II clinical studies across a panel of B-cell malignancy disorders, including chronic lymphocytic leukaemia, mantle cell lymphoma and diffuse large B-cell lymphoma.
The terms of the agreement will see the firms enter into a 50/50 profit-loss agreement, sharing development and commercialisation activities. The split in terms of development responsibilities, particularly costs, is 60% for J&J and 40% for Pharmacyclics, with each firm leading development for specific indications. The firms are planning to initiate multiple Phase III clinical trials for PCI-32765 in the next "several years". Janssen has made an up-front payment of USD150 million, which is to be recorded in the J&J's fourth quarter financial results. Additional payments will be made by J&J to Pharmacyclics based upon the achievement of certain development and regulatory milestones. Pharmacyclics has pegged the total transaction value it could receive at a potential maximum of USD975 million, including the up-front payment from J&J.
Pharmacyclics will be responsible for sales and take a lead commercial strategy role in the United States, while sharing commercialisation activities with Janssen. Outside the United States, Janssen will lead commercialisation activities, the firms said in a statement.
PCI-32765 is a novel, oral, first-in-class Bruton's tyrosine kinase inhibitor being developed for the treatment of non-Hodgkin's lymphoma (NHL), chronic lymphocytic leukemia and multiple myeloma.
Doxil Supplier Woes
Separately, J&J's contract manufacturer for Doxil (doxorubicin hydrochloride), Ben Venue—part of German pharma major Boehringer Ingelheim—is facing new challenges as the US FDA's latest inspection has found violations in a storage area at its Ohio (US) facility. According to the Wall Street Journal, the FDA has indicated that Ben Venue did not follow standard procedures. A10-gallon can in a storage area of the plant was found to contain "substances consistent with urine", the source added, citing the regulator's report. Furthermore, an excessive amount of defects, including metal particles in a batch of sestamibi, were found.
Outlook and Implications
The deal provides J&J with access to a promising cancer candidate that would also enhance its own research pipeline in the oncology therapy area. The potential deal value of USD1 billion for Pharmacyclics reflects the commercial potency of the drug and is understood to be one of the key reasons behind the agreement. It is worth noting that in August, Pharmacyclics signed a five-year research and development co-operation deal with the National Cancer Institute (NCI) on the development of PCI-32765 for the treatment of haematologic malignancies. Under that agreement, the NCI's Division of Cancer Treatment and Diagnosis plans to sponsor Phase I and Phase II trials of PCI-32765 in various haematologic malignancies, including NHL and multiple myeloma.
In terms of the contract supplier woes, J&J can expect that the continued problems faced by Ben Venue will affect the availability of Doxil in the US market. The drug is already on the shortage list and revenues from the drug are expected to decline further. In the third quarter of 2011, Doxil reported an 87% year-on-year drop in revenues to USD10 million.