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Epizyme Announces Additional Positive Data from Ongoing Phase 1 Study of Tazemetostat (EPZ-6438) in Relapsed or Refractory Non-Hodgkin Lymphoma

On June 20, 2015 Epizyme reported results from the ongoing phase 1 trial of tazemetostat (EPZ-6438), a first-in-class EZH2 inhibitor, showing meaningful clinical activity when used as an oral monotherapy in patients with advanced B-cell non-Hodgkin lymphomas (NHL) and solid tumors (Press release, Epizyme, JUN 20, 2015, View Source [SID:1234505786]). In NHL, treatment with tazemetostat continues to demonstrate an encouraging profile with nine of 15 evaluable NHL patients achieving an objective response, including a partial response in the first treated patient with an EZH2 tumor mutation. The data, which include patients from the dose escalation and dose expansion cohorts of the phase 1 study, as well as a food effects sub-study, were presented today by Vincent Ribrag, M.D., Institut Gustave Roussy, at the 13th International Conference on Malignant Lymphoma.

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"The breadth, depth and durability of responses seen in NHL patients among multiple histologies continue to impress, as does the safety and tolerability of tazemetostat in this phase 1 study," said Dr. Ribrag. "Among the patients in the dose escalation cohorts, we have seen a noteworthy deepening of responses over time, and in the first treated patient with an EZH2 tumor mutation, we have seen a partial response, which is very encouraging."

Summary Results

As of June 8, 2015, the following clinical data were observed:

Nine of 15 evaluable NHL patients have achieved an objective response, including two patients with an ongoing complete response (CR).

Five of nine evaluable diffuse large B-cell lymphoma (DLBCL) patients achieved an objective response. One patient with a CR remains on study at 18 months of treatment.

Three of five evaluable patients with follicular lymphoma achieved an objective response. One patient with a CR remains on study at 13 months, and one patient with a PR remains on study at 13 months.

One patient with a marginal zone lymphoma achieved a partial response and continues on study at 11 months.

All treatment responses were observed between two and 10 months on therapy.

One of 14 patients evaluated for EZH2 status possesses a specific EZH2 tumor mutation (Y646H). This patient, who had relapsed or been refractory to six previous treatment regimens, achieved a partial response after 16 weeks of therapy and remains on study.

The majority of adverse events were grade 1 or grade 2 within the evaluable for safety population of 45 patients with NHL and solid tumors. The most common adverse events regardless of attribution were asthenia, anorexia, anemia, dyspnea and nausea. Five grade 3 or greater treatment-related adverse events were observed including one each of: grade 3 anorexia, grade 3 hypertension, grade 3 transaminase elevation, grade 4 thrombocytopenia, and grade 4 neutropenia.

"These results highlight the therapeutic potential of tazemetostat in NHL, with a number of patients achieving durable remissions with time on treatment at or beyond one year," said Peter Ho, M.D., Ph.D., Chief Development Officer, Epizyme. "We look forward to exploring further the clinical utility of tazemetostat in NHL in a robust phase 2 development program."

The NHL patients enrolled on study were heavily pre-treated, with 85 percent of patients having received three or more prior therapies and 37 percent of patients having received more than five or more prior therapies. Thirty-seven percent of patients were refractory to their last prior regimen and 26 percent of patients had received a prior autologous hematopoietic stem cell transplant.

Drug pharmacokinetics showed rapid absorption with a mean terminal half-life of three to five hours. Cmax and AUC1-12hr were dose proportional at steady-state throughout the dosing range. Steady-state Ctrough levels were reached by day 15.

The company plans to report a further update from the phase 1 trial by the end of 2015.

Study Design

This open-label, multi-center, phase 1 study is investigating tazemetostat as monotherapy in patients with relapsed or refractory B-cell non-Hodgkin lymphomas or advanced solid tumors. The study objectives include identification of the recommended phase 2 dose or maximum tolerated dose, safety, tolerability, pharmacokinetics and preliminary evaluation of anti-tumor activity. Five cohorts were studied in the dose escalation phase: 100 mg, 200 mg, 400 mg, 800 mg and 1600 mg; and two cohorts, 800 mg and 1600 mg, were evaluated in the dose expansion phase. All doses were given twice daily.

Expanded Tazemetostat Phase 2 Plans

Epizyme is now enrolling patients in an international five-arm, multi-center, phase 2 study during the second quarter of 2015 that will assess the safety and efficacy of tazemetostat in patients with relapsed or refractory NHL, stratified by cell of origin and EZH2 mutation status. A second planned phase 2 trial of tazemetostat in adult patients with INI1-deficient solid tumors is expected to begin later in 2015. Patients in both studies will be treated with the recommended phase 2 dose of 800 mg twice daily. A phase 1 study in pediatric patients with INI1-deficient solid tumors is also expected to start later in 2015.

In addition to these previously announced studies, the company plans to initiate additional trials of tazemetostat, including:

A combination study of tazemetostat with R-CHOP in patients with DLBCL. R-CHOP, which represents current first-line treatment for patients with DLBCL, is comprised of rituximab, cyclophosphamide, doxorubicin, vincristine, and prednisone.
A combination study of tazemetostat with a B-cell signaling agent or other emerging targeted therapies for B-cell lymphomas.
"Conducting combination studies in B-cell lymphoma will further elucidate the clinical potential of tazemetostat," said Dr. Ho. "Scientists here at Epizyme have demonstrated pre-clinical synergy with both current standard-of-care therapeutics and emerging investigational agents, and we believe that tazemetostat has a safety and tolerability profile that will lend itself well to combination regimens."

About EZH2 in Cancer

EZH2 is a histone methyltransferase (HMT) that is increasingly understood to play a potentially oncogenic role in a number of cancers. These include non-Hodgkin lymphomas, INI1-deficient cancers such as malignant rhabdoid tumors, epithelioid sarcomas and synovial sarcoma; and a range of other solid tumors.

About Tazemetostat

Epizyme is developing tazemetostat for the treatment of non-Hodgkin lymphoma patients and patients with INI1-deficient solid tumors. Tazemetostat is a first-in-class small molecule inhibitor of EZH2 created by Epizyme using its proprietary product platform. In many human cancers, aberrant EZH2 enzyme activity results in misregulation of genes that control cell proliferation resulting in the rapid and unconstrained growth of tumor cells. Tazemetostat is the WHO International Non-Proprietary Name (INN) for EPZ-6438.

Tazemetostat is the second HMT inhibitor to enter human clinical development (following Epizyme’s DOT1L inhibitor, pinometostat, also known as EPZ-5676).

Additional information about this program, including clinical trial information, may be found here: View Source

PlasmaTech Biopharmaceuticals Announces Name Change to Abeona Therapeutics to Reflect Broader Rare Disease Commitment

On June 19, 2015 PlasmaTech Biopharmaceuticals, Inc. (NASDAQ: PTBI), a biopharmaceutical company focused on developing and delivering gene therapy and plasma-based products for severe and life-threatening rare diseases, reported a name change to Abeona Therapeutics, Inc. to reflect its broader rare disease commitment (Press release, Abeona Therapeutics, JUN 19, 2015, View Source;p=irol-newsArticle&ID=2060889 [SID:1234510405]). The Company expects that its common stock will begin trading on NASDAQ on Monday, June 22, under the ticker symbol ABEO, along with announcing Abeona Therapeutics to ring the Nasdaq Stock market closing bell on Monday, June 22nd at 4:00 pm ET. Live streaming can be found at: View Source)

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"Abeona was forged from the company’s close collaborations with key stakeholders, all dedicated to transforming new biotechnology insights into breakthrough treatments for rare diseases," stated Steven Rouhandeh, Executive Chairman. "Most importantly, we have established a dedicated team of world class professionals led by Dr. Tim Miller, who will be critical to building and accelerating value for patients and shareholders."

A rare disease is one that affects fewer than 200,000 people in the United States. There are nearly 7,000 rare diseases, which may involve chronic illness, disability, and often, premature death. More than 25 million Americans and 30 million Europeans have a rare disease. While rare diseases can affect any age group, about 50% of people affected are children (15 million); and rare diseases account for 35% of deaths in the first year of life. These rare diseases are often poorly diagnosed, very complex, and have no treatment or not very effective treatment — over 95% of rare diseases do not have a single FDA or EMA approved drug treatment. However, most rare diseases are often caused by changes in genes — 80% are genetic in origin and can present at any stage of life.

"Effectively developing therapies for rare disease requires innovative approaches and strong collaboration between researchers, industry, regulators and patient groups," noted Tim Miller, Ph.D., President & CEO. "We believe emerging insights in gene therapy and advances in biotechnology provide significant opportunities to develop breakthrough treatments for rare diseases. Our focus is transforming the promise of our products and platforms into new treatments for severe and life-threatening rare diseases such as Sanfilippo syndromes types A and B, juvenile Batten disease, and Fanconi anemia."

About the Abeona Name Change: Abeona (pronounced ey-bee-ohn-uh) is the Roman Goddess who protects children as they take their first steps away from home.

European Commission Approves Bristol-Myers Squibb’s Opdivo (nivolumab), the First and Only PD-1 Checkpoint Inhibitor Approved in Europe, for Both First-Line and Previously-Treated Advanced Melanoma Patients

On June 19, 2015 Bristol-Myers Squibb reported that the European Commission has approved Opdivo, a PD-1 immune checkpoint inhibitor, for the treatment of advanced (unresectable or metastatic) melanoma in adults, regardless of BRAF status (Press release, Bristol-Myers Squibb, JUN 19, 2015, View Source [SID:1234505464]).

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Today’s approval allows for the marketing of Opdivo in all 28 Member States of the EU. It follows an accelerated assessment by the Committee for Medicinal Products for Human Use (CHMP), which was announced on April 24, 2015. This accelerated assessment was given because Opdivo qualified for the designation as a "medicinal product of major interest from the point of view of public health and in particular from the view point of therapeutic innovation." Opdivo is the only PD-1 immune checkpoint inhibitor to receive an accelerated assessment in Europe, and is the first approval given by the European Commission for a PD-1 inhibitor in any cancer.

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The incidence of melanoma has continued to increase in almost all European countries, with an estimated one in five patients expected to develop metastatic, or advanced, disease. Historically, prognosis for late-stage metastatic melanoma has been poor: the average survival rate for stage IV is just six months with a one-year mortality rate of 75%.

"At Bristol-Myers Squibb, we are continually focused on developing new ways to transform the outlook for patients with some of the hardest-to-treat and deadliest cancers," said Emmanuel Blin, senior vice president, head of commercialization, policy and operations, Bristol-Myers Squibb. "We are pleased to bring the first PD-1 immune checkpoint inhibitor to the European Union for the treatment of advanced melanoma. We are working relentlessly and at record-breaking speed to build upon our Immuno-Oncology science to deliver new treatment options, with the goal of improving long-term survival for patients."

About CheckMate -066, -037

The European Commission’s approval is based on data from two Phase 3 studies (CheckMate -066, -037). Together, the trials investigated Opdivo across treatment lines and mutational status with a consistent dose of 3 mg/kg every two weeks that has been well-established across the Phase 3 clinical development program for Opdivo.

"The Phase 3 data supporting the approval of Opdivo demonstrates both superior overall survival and response rate for treatment-naïve patients with advanced melanoma, against the standard of care," said Dirk Schadendorf, M.D., professor, director and chair, Clinic for Dermatology, University Hospital, Essen, Germany. "It is an important step forward in offering a new option for advanced melanoma patients in the European Union, especially considering that long-term benefits have largely been elusive in this treatment category."

CheckMate -066 is a Phase 3 randomized, double-blind study comparing Opdivo (n=210) to the chemotherapy dacarbazine (DTIC) (n=208) in patients with treatment-naïve advanced melanoma. It is the first Phase 3 trial of a PD-1 immune checkpoint inhibitor to demonstrate superior overall survival (OS) in advanced melanoma, demonstrating a one-year survival rate of 73% for Opdivo versus 42% for DTIC, and there was a 58% decrease in the risk of death for patients treated with Opdivo based on a hazard ratio of 0.42 (99.79% CI, 0.25-0.73; P<0.0001). Objective response rate (ORR) also was significantly higher for Opdivo than DTIC (40% vs. 14%, P<0.0001). The primary endpoint of this trial was OS. Secondary endpoints included progression-free survival (PFS) and ORR by RECIST v1.1 criteria.

Safety was reported in all patients treated in the Opdivo and DTIC arms. Fewer discontinuations were observed with Opdivo than DTIC (6.8% vs. 11.7%) as well as for treatment-related Grade 3/4 adverse events (AEs) (11.7% vs. 17.6%), which were managed using established safety algorithms. The most common Opdivo treatment-related AEs were fatigue (20%), pruritus (17%), and nausea (16.5%). Common adverse events in the DTIC arm were consistent with those in previous reports and included nausea (41.5%), vomiting (21%), fatigue (15%), diarrhea (15%) and hematological toxicities. No deaths were attributed to study drug toxicity in either arm.

CheckMate -037 is a Phase 3 randomized, controlled open-label study of Opdivo (n=272) versus investigator’s choice chemotherapy (ICC) (n=133) — either single-agent dacarbazine or carboplatin plus paclitaxel — in patients with advanced melanoma who were previously treated with Yervoy (ipilimumab), and, if BRAF mutation positive, a BRAF inhibitor. Co-primary endpoints of the study are ORR and OS. In a planned interim analysis of ORR, an improvement in ORR of 32% was seen in the Opdivo arm (95% CI, 23.5%-40.8%) versus 11% in the investigator’s choice chemotherapy arm (95% CI, 3.5%-23.1%). A majority of responses (87%) were ongoing in those patients administered Opdivo. Responses to Opdivo were demonstrated in both patients with or without BRAF mutuation and regardless of PD-L1 expression.

Safety was reported on all patients treated in the Opdivo (n=268) and ICC (n=102) arms. The majority of Opdivo treatment-related adverse events (AEs) were Grade 1/2 and managed using recommended treatment algorithms. Grade 3/4 drug-related AEs were less frequent for the Opdivo arm (9% vs. 31% of patients treated with chemotherapy). Discontinuations due to drug-related AEs of any grade occurred in 3% of Opdivo-treated patients and 7% of patients administered ICC. There were no deaths related to study drug toxicity.

The approval also was based on data from a Phase 1b study (Study -003) in relapsed advanced or metastatic melanoma, which demonstrated the first characterization of Opdivo benefit/risk in advanced melanoma. Of the 306 previously-treated patients enrolled in the study, 107 had melanoma and received Opdivo at a dose of 0.1 mg/kg, 0.3 mg/kg, 1 mg/kg, 3 mg/kg, or 10 mg/kg every two weeks for a maximum of two years. In this patient population, objective response was reported in 33 patients (31%) with a median duration of response of 22.9 months (95% CI: 17.0, NR). The median PFS was 3.7 months (95% CI: 1.9, 9.3). The median OS was 17.3 months (95% CI: 12.5, 36.7), and the estimated OS rates were 63% (95% CI: 53, 71) at one year, 48% (95% CI: 38, 57) at two years, and 41% (95% CI: 31, 51) at three years.

About Opdivo

Bristol-Myers Squibb has a broad, global development program to study Opdivo in multiple tumor types consisting of more than 50 trials – as monotherapy or in combination with other therapies – in which more than 8,000 patients have been enrolled worldwide.

Opdivo became the first PD-1 immune checkpoint inhibitor to receive regulatory approval anywhere in the world on July 4, 2014 when Ono Pharmaceutical Co. announced that it received manufacturing and marketing approval in Japan for the treatment of patients with unresectable melanoma. On December 22, 2014, the U.S. Food and Drug Administration (FDA) granted its first approval for Opdivo for the treatment of patients with unresectable or metastatic melanoma and disease progression following Yervoy (ipilimumab) and, if BRAF V600 mutation positive, a BRAF inhibitor. On March 4, 2015, Opdivo received its second FDA approval for the treatment of patients with metastatic squamous non-small cell lung cancer (NSCLC) with progression on or after platinum-based chemotherapy.

IMPORTANT SAFETY INFORMATION

Immune-Mediated Pneumonitis

Severe pneumonitis or interstitial lung disease, including fatal cases, occurred with OPDIVO treatment. Across the clinical trial experience in 691 patients with solid tumors, fatal immune-mediated pneumonitis occurred in 0.7% (5/691) of patients receiving OPDIVO; no cases occurred in Trial 1 or Trial 3. In Trial 1, pneumonitis, including interstitial lung disease, occurred in 3.4% (9/268) of patients receiving OPDIVO and none of the 102 patients receiving chemotherapy. Immune-mediated pneumonitis occurred in 2.2% (6/268) of patients receiving OPDIVO; one with Grade 3 and five with Grade 2. In Trial 3, immune-mediated pneumonitis occurred in 6% (7/117) of patients receiving OPDIVO, including, five Grade 3 and two Grade 2 cases. Monitor patients for signs and symptoms of pneumonitis. Administer corticosteroids for Grade 2 or greater pneumonitis. Permanently discontinue OPDIVO for Grade 3 or 4 and withhold OPDIVO until resolution for Grade 2.

Immune-Mediated Colitis

In Trial 1, diarrhea or colitis occurred in 21% (57/268) of patients receiving OPDIVO and 18% (18/102) of patients receiving chemotherapy. Immune-mediated colitis occurred in 2.2% (6/268) of patients receiving OPDIVO; five with Grade 3 and one with Grade 2. In Trial 3, diarrhea occurred in 21% (24/117) of patients receiving OPDIVO. Grade 3 immune-mediated colitis occurred in 0.9% (1/117) of patients. Monitor patients for immune-mediated colitis. Administer corticosteroids for Grade 2 (of more than 5 days duration), 3, or 4 colitis. Withhold OPDIVO for Grade 2 or 3. Permanently discontinue OPDIVO for Grade 4 colitis or recurrent colitis upon restarting OPDIVO.

Immune-Mediated Hepatitis

In Trial 1, there was an increased incidence of liver test abnormalities in the OPDIVO-treated group as compared to the chemotherapy-treated group, with increases in AST (28% vs 12%), alkaline phosphatase (22% vs 13%), ALT (16% vs 5%), and total bilirubin (9% vs 0). Immune-mediated hepatitis occurred in 1.1% (3/268) of patients receiving OPDIVO; two with Grade 3 and one with Grade 2. In Trial 3, the incidences of increased liver test values were AST (16%), alkaline phosphatase (14%), ALT (12%), and total bilirubin (2.7%). Monitor patients for abnormal liver tests prior to and periodically during treatment. Administer corticosteroids for Grade 2 or greater transaminase elevations. Withhold OPDIVO for Grade 2 and permanently discontinue OPDIVO for Grade 3 or 4 immune-mediated hepatitis.

Immune-Mediated Nephritis and Renal Dysfunction

In Trial 1, there was an increased incidence of elevated creatinine in the OPDIVO-treated group as compared to the chemotherapy-treated group (13% vs 9%). Grade 2 or 3 immune-mediated nephritis or renal dysfunction occurred in 0.7% (2/268) of patients. In Trial 3, the incidence of elevated creatinine was 22%. Immune-mediated renal dysfunction (Grade 2) occurred in 0.9% (1/117) of patients. Monitor patients for elevated serum creatinine prior to and periodically during treatment. For Grade 2 or 3 serum creatinine elevation, withhold OPDIVO and administer corticosteroids; if worsening or no improvement occurs, permanently discontinue OPDIVO. Administer corticosteroids for Grade 4 serum creatinine elevation and permanently discontinue OPDIVO.

Immune-Mediated Hypothyroidism and Hyperthyroidism

In Trial 1, Grade 1 or 2 hypothyroidism occurred in 8% (21/268) of patients receiving OPDIVO and none of the 102 patients receiving chemotherapy. Grade 1 or 2 hyperthyroidism occurred in 3% (8/268) of patients receiving OPDIVO and 1% (1/102) of patients receiving chemotherapy. In Trial 3, hypothyroidism occurred in 4.3% (5/117) of patients receiving OPDIVO. Hyperthyroidism occurred in 1.7% (2/117) of patients, including one Grade 2 case. Monitor thyroid function prior to and periodically during treatment. Administer hormone replacement therapy for hypothyroidism. Initiate medical management for control of hyperthyroidism.

Other Immune-Mediated Adverse Reactions

In Trial 1 and 3 (n=385), the following clinically significant immune-mediated adverse reactions occurred in <2% of OPDIVO-treated patients: adrenal insufficiency, uveitis, pancreatitis, facial and abducens nerve paresis, demyeliniation, autoimmune neuropathy, motor dysfunction, and vasculitis. Across clinical trials of OPDIVO administered at doses 3 mg/kg and 10 mg/kg, additional clinically significant, immune-mediated adverse reactions were identified: hypophysitis, diabetic ketoacidosis, hypopituitarism, Guillain-Barré syndrome, and myasthenic syndrome. Based on the severity of adverse reaction, withhold OPDIVO, administer high-dose corticosteroids, and, if appropriate, initiate hormone- replacement therapy.

Embryofetal Toxicity

Based on its mechanism of action, OPDIVO can cause fetal harm when administered to a pregnant woman. Advise pregnant women of the potential risk to a fetus. Advise females of reproductive potential to use effective contraception during treatment with OPDIVO and for at least 5 months after the last dose of OPDIVO.

Lactation

It is not known whether OPDIVO is present in human milk. Because many drugs, including antibodies, are excreted in human milk and because of the potential for serious adverse reactions in nursing infants from OPDIVO, advise women to discontinue breastfeeding during treatment.

Serious Adverse Reactions

In Trial 1, serious adverse reactions occurred in 41% of patients receiving OPDIVO. Grade 3 and 4 adverse reactions occurred in 42% of patients receiving OPDIVO. The most frequent Grade 3 and 4 adverse drug reactions reported in 2% to <5% of patients receiving OPDIVO were abdominal pain, hyponatremia, increased aspartate aminotransferase, and increased lipase.
In Trial 3, serious adverse reactions occurred in 59% of patients receiving OPDIVO. The most frequent serious adverse drug reactions reported in ≥2% of patients were dyspnea, pneumonia, chronic obstructive pulmonary disease exacerbation, pneumonitis, hypercalcemia, pleural effusion, hemoptysis, and pain.

Common Adverse Reactions

The most common adverse reactions (≥20%) reported with OPDIVO in Trial 1 were rash (21%) and in Trial 3 were fatigue (50%), dyspnea (38%), musculoskeletal pain (36%), decreased appetite (35%), cough (32%), nausea (29%), and constipation (24%).

CYRAMZA® (ramucirumab) Hepatocellular Carcinoma Data Published by The Lancet Oncology

On June 19, 2015 Eli Lilly reported that The Lancet Oncology has published results of the Phase III REACH trial that evaluated CYRAMZA (ramucirumab) as a second-line treatment for people with hepatocellular carcinoma (HCC), also known as liver cancer (Press release, Eli Lilly, JUN 19, 2015, View Source [SID:1234505463]).

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While the REACH trial’s primary endpoint of overall survival favored the CYRAMZA arm, it was not statistically significant. However, encouraging single-agent CYRAMZA activity was observed, with meaningful improvements in key secondary endpoints as well as within certain patient subgroups.

The global, randomized, double-blind REACH trial compared ramucirumab plus best supportive care to placebo plus best supportive care as a second-line treatment in patients with HCC after being treated with sorafenib in the first-line setting. Median overall survival (OS) was 9.2 months on the ramucirumab arm compared to 7.6 months on the placebo arm (HR 0.866; 95% CI: 0.717-1.046; p=0.1391). While the median OS was not statistically significant, a prespecified subgroup of patients with an elevated baseline of alpha-fetoprotein (AFP) ≥400 ng/mL showed a greater survival improvement with ramucirumab treatment. Median OS in this subgroup of patients was 7.8 months in the ramucirumab arm compared to 4.2 months in the placebo arm (HR 0.674; 95% CI 0.508-0.895; p=0.0059).

"Advanced liver cancer carries a poor prognosis with limited treatment options. Several phase III studies to date have not been able to demonstrate improved survival in the second-line setting following sorafenib failure," said Andrew X. Zhu, M.D., director of Liver Cancer Research at Massachusetts General Hospital Cancer Center and principal investigator of the REACH trial. "Further analyses from the REACH study have identified AFP as a potential marker for selecting patients with advanced hepatocellular carcinoma who may benefit from ramucirumab treatment."

The REACH study analyses presented at the Gastrointestinal Cancers Symposium earlier this year concluded that a greater reduction in the risk of death in patients with progressively higher baseline AFP values warrants further investigation. Based on these findings, Lilly will soon begin enrollment in REACH-2, a new Phase III trial to evaluate the benefit of ramucirumab treatment in advanced liver cancer patients with an elevated baseline AFP (ClinicalTrials.gov identifier: NCT02435433).

"Globally, a high unmet need exists in second-line hepatocellular carcinoma, and currently there are no therapies approved in the U.S., EU or Japan to treat patients in this setting," said Richard Gaynor, M.D., senior vice president, product development and medical affairs for Lilly Oncology. "We are encouraged by the efficacy seen overall in the REACH study, especially in specific subpopulations, and we hope to confirm those results with the new CYRAMZA Phase III trial."

The safety data in the REACH study were consistent with results from previous single-agent ramucirumab studies and the safety information included in the U.S. Prescribing Information for ramucirumab. The most common (≥5% incidence) clinical grade ≥3 adverse events occurring more frequently in patients on the ramucirumab arm compared to the control arm were hypertension (12% vs. 4%), asthenia (fatigue) (5% vs. 2%), and malignant neoplasm progression (6% vs. 4%). The safety profile of ramucirumab in patients with elevated baseline AFP > 400 ng/mL was consistent with that observed in the overall safety population.

Ramucirumab has been granted Orphan Drug Designation for treatment of hepatocellular carcinoma in the U.S. and EU. Orphan drug status is given – in the U.S. by the FDA’s Office of Orphan Products Development (OOPD) and in the EU by the European Commission – to medicines that have demonstrated promise for the treatment of rare diseases.

About the REACH Trial
REACH is a global, randomized, double-blind Phase III study of ramucirumab plus best supportive care compared to placebo plus best supportive care as a second-line treatment in patients with hepatocellular carcinoma who have been previously treated with sorafenib in the first-line setting. Initiated in 2010, the study enrolled 565 patients across 27 countries; as defined in the trial protocol, the primary analyses are focused on patients with a Child-Pugh score of < 7 (Child-Pugh Class A only). The primary endpoint (also referred to as the major efficacy outcome measure) of the REACH trial was overall survival and key secondary endpoints (also referred to as the supportive efficacy outcome measures) include: progression-free survival; overall response rate; time to progression; and safety.

TFS to acquire US pharmaceutical partners to capture downstream revenues from product sales

On June 18, 2016 TFS Corporation Limited ("TFS", "Company", ASX: TFC), the world’s largest owner and manager of commercial Indian sandalwood plantations, reported it has entered into share purchase agreements to acquire US-based pharmaceutical partners ViroXis Corporation ("ViroXis") and Santalis Pharmaceuticals ("Santalis", together "the Acquisitions") (Press release, TFS, JUN 18, 2015, View Source [SID1234517229]).

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TFS Chief Executive Officer Frank Wilson said, "The Acquisitions will extend TFS’s soil to oil strategy by expanding the Company’s vertically integrated business model. TFS will benefit from direct ownership of the pharmaceutical companies which exclusively develop and sell products containing TFS-grown and processed Indian sandalwood oil to the high-value pharmaceutical sector."

"While TFS previously benefited from pharmaceutical product development through oil sales, with these Acquisitions we will also capture all of the future product earnings, including product royalties and licence fees, generated by ViroXis and Santalis, thereby significantly enhancing our own earnings," Mr Wilson said.

"We have been directly involved over the last five years in successfully building the first mover advantage established by ViroXis and Santalis. These transactions will allow us to work even closer with the product development teams and accelerate the establishment of a range of sandalwood-based dermatological products. With increased control of the formulation we also expect to generate additional revenue from our oil sales."

Santalis has already licensed a range of dermatological products that contain TFS-grown Indian sandalwood oil to Nestle-owned Galderma, a global dermatological company. The acne product Benzac Acne Solutions, which is the first to have been commercialised by Santalis, successfully debuted on US shelves earlier this year and is already available in around 25,000 stores through major US retail chains. Following these Acquisitions, each sale of the Benzac Acne Solutions range will directly generate royalty revenues for TFS in addition to existing oil sales.

"Over time we expect a series of products containing TFS’s Indian sandalwood oil to be distributed by pharmaceutical companies to worldwide markets," Mr Wilson said.

Transaction summary
Subject to certain conditions to completion, TFS will pay minimum consideration of US$23.4 million for the issued shares in ViroXis and Santalis it does not already own (100% and 50% respectively), payable by US$1.5 million in cash and US$21.9 million in TFS shares.

The scrip component of the minimum consideration will involve the issuance of around 15.3 million TFS shares at a price of AU$1.85 per share. TFS anticipates issuing around 12.6 million shares in July 2015 and the remaining 2.7 million shares in the period between 10 September 2015 and 31 July 2016. Around 9.1 million of the 12.6 million shares expected to be issued in July 2015 will be subject to lock up provisions (which range between six and thirty months).

The shares issued pursuant to the Acquisitions will be made utilising the Company’s available placement capacity under ASX listing rule 7.1.

The total maximum consideration payable by TFS consists of fixed minimum payments of US$23.4 million and contingent payments over time of up to US$221.5 million. The contingent consideration only becomes payable when the acquired companies achieve significant operating and commercial milestones (from the launch or approval of new pharmaceutical products containing Indian sandalwood oil) and significant operating cash inflows.

The structure of the Acquisitions is designed to ensure that the founders of ViroXis and Santalis, who will continue to operate the businesses, are closely aligned to the ongoing and long-term success of the companies and their products. Both founders will sign new employment contracts on completion.

"Total consideration is directly linked to ViroXis and Santalis successfully developing and selling additional pharmaceutical products to the healthcare market, as has been achieved with the Benzac range. We have structured the transaction with minimal upfront cash outlay, flexibility with cash and scrip payments, incentives to generate additional revenue and profit, and lock-up provisions, to provide maximum value to TFS shareholders," Mr Wilson said.

Since 2010, ViroXis and Santalis have invested over US$17 million in the development and commercialisation of pharmaceutical products containing Indian sandalwood oil.

The Acquisitions do not impact TFS’s previous guidance for FY15 of NPAT of at least $90 million. After absorbing transaction costs, TFS continues to expect cash EBITDA to increase year-on-year by approximately 10%. On a stand-alone basis, and excluding any benefit from higher Indian sandalwood oil sales, the Acquisitions are expected to be EPS dilutive in FY16.

Further details on the key terms of the transactions are provided in Appendix One.

Background on ViroXis and Santalis
ViroXis is a bio-pharmaceutical company focused on developing and commercialising innovative, proprietary, botanical pharmaceuticals derived from sandalwood oil, exclusively for viral conditions. ViroXis was cofounded by its Chief Executive Officer Ian Clements, who has more than 20 years of experience in the pharmaceutical and biotechnology industries.

Santalis is focused on developing and commercialising sandalwood products targeting all possible conditions outside of viral skin diseases (dermatological conditions such as acne, eczema, psoriasis, redness and sensitive skin). Santalis was founded in 2010 and is a 50-50 joint venture with TFS. Santalis is led by Chief Executive Officer Paul Castella, who co-founded Santalis with Mr Clements and was also a co-founder of ViroXis. Dr Castella has a Ph.D. in molecular biology and has founded and managed numerous biotechnology companies with a successful record of product development, regulatory approval and commercialisation.

ViroXis CEO Ian Clements said: "I am delighted we have reached this agreement with TFS, with their ongoing support enabling us to extend and accelerate development of products using Indian sandalwood oil to treat viral skin infections, such as common skin warts and Molluscum contagiosum."

Santalis CEO Paul Castella added: "We have achieved great success to date through our landmark agreements with Galderma and we will be able to build on this by working even more closely with TFS in developing and marketing our pipeline of dermatological products containing Indian sandalwood oil. Santalis successfully developed the Benzac acne products, which have now launched across the US, and is well advanced with numerous other products, including for eczema."
Further details on ViroXis and Santalis are provided in Appendix Two.
APPENDIX ONE
TRANSACTION DETAILS
Transaction details The minimum purchase price is US$23.4 million (ViroXis: US$18.4 million, Santalis: US$5.0 million).

The maximum purchase price over time is US$244.9 million (ViroXis: US$154.9 million, Santalis: US$90.0 million) if all milestones, base earn out thresholds and incentive and final earn out thresholds are met through to the eight year anniversary of completion.

The contingent consideration has been structured as follows:
Minimum purchase price
The fixed minimum purchase price for ViroXis is US$18.4 million, comprising cash of US$1.5 million and stock of US$16.9 million.
The fixed minimum purchase price for Santalis is US$5.0 million comprised fully of stock.
The TFS shares will be issued at AU$1.85 per share, being the volume weighted average price for TFS shares for the 30 trading days to 17 June 2015.
In relation to the fixed minimum purchase price, a total of 15.3 million shares is expected to be issued within the following time-frames and be subject to the following lock up periods: Stock issued in July 2015 and subject to no lock up period: 3.5 million Stock issued in July 2015 and subject to lock up period of between 6 and 30 months: 9.1 million Stock issued between September 2015 and July 2016 and subject to no lock up period: 2.7 million

Milestone payments
The purchase price for ViroXis will increase by a maximum of US$26.0 million if the following milestones are achieved within certain periods in up to five years after completion:
1. US$2.0 million on the launch of an over-the-counter ("OTC") product
2. US$4.0 million on the enrolment of the first patient in a Phase 3 FDA trial for a skin indication
3. US$4.0 million on the enrolment of the first patient in a Phase 3 FDA trial for a second skin indication
4. US$8.0 million on FDA approval of a prescription product for a skin indication
5. US$8.0 million on FDA approval of a prescription product for a second skin indication

The purchase price for Santalis will increase by a maximum of US$20.0 million if the following milestones are achieved in the five years after completion:
1. US$5.0 million on the launch of a new OTC product
2. US$2.5 million on the enrolment of the first patient in a Phase 3 FDA trial for a skin indication
3. US$2.5 million on the enrolment of the first patient in a Phase 3 FDA trial for a second skin indication 4. US$5.0 million on FDA approval of a prescription product for a skin indication
5. US$5.0 million on FDA approval of a prescription product for a second skin indication
If FDA approval of a prescription product (milestones 4 and 5 above) is granted between five and eight years post completion, then 50% of the relevant milestone payment will be payable.

All milestone payments are payable in stock and/ or cash, at TFS’s election and in such proportions as TFS determines.
Base earn out payments
The purchase price for ViroXis will increase by a maximum of US$50.0 million based on the level of aggregate net cash flow ("NCF") generated by the business in the five years post completion. The base earn out payment thresholds are:
No earn out payment Less than US$4.3 million US$5.0 million NCF equal to or greater than US$4.3 million and less than US$8.6 million US$15.0 million NCF equal to or greater than US$8.6 million and less than US$12.8 million US$35.0 million NCF equal to or greater than US$12.8 million and less than US$17.1 million US$50.0 million NCF equal to or greater than US$17.1 million

The purchase price for Santalis will increase by a maximum of US$31.0 million based on the level of aggregate net cash flow ("NCF") generated by the business in the five years post completion. The base earn out payment thresholds are:
No earn out payment Less than US$2.5 million US$5.0 million NCF equal to or greater than US$2.5 million and less than US$5.0 million US$10.0 million NCF equal to or greater than US$5.0 million and less than US$7.4 million US$20.0 million NCF equal to or greater than US$7.4 million and less than US$9.9 million US$31.0 million NCF equal to or greater than US$9.9 million

All base earn out payments are payable in stock and/ or cash, at TFS’s election and in such proportions as TFS determines.

Incentive earn out payments
The purchase price for ViroXis will increase by an incentive earn out payment equal to 20% of the NCF in excess of US$10.0 million for each of the three years ending on the six, seven and eight year anniversaries of completion. The incentive earn out payment is capped at US$60.7 million.

The purchase price for Santalis will increase by an incentive earn out payment equal to 20% of the NCF in excess of US$10.0 million for each of the three years ending on the six, seven and eight year anniversaries of completion. The incentive earn out payment is capped at US$37.5 million.

All incentive earn out payments are payable in stock and/ or cash, at TFS’s election and in such proportions as TFS determines.
Final earn out payments
The purchase price for ViroXis will increase by a final earn out payment equal to 20% of the amount, if any, that aggregate NCF for the 8 year period after completion exceeds US$111.9 million, subject to the maximum purchase price cap for all purchase payments of US$154.9 million.
The purchase price for Santalis will increase by a final earn out payment equal to 20% of the amount, if any, that aggregate NCF for the 8 year period after completion exceeds US$111.7 million, subject to the maximum purchase price cap for all payments of US$90.0 million.
All final payments are payable in stock or cash, at TFS’s election and in such proportions as TFS determines.

Put and call mechanism: Santalis In accordance with the terms of the Santalis share purchase agreement, Mr Clements and Dr Castella will initially retain some of their Santalis shares following completion of the Acquisitions (which is expected to be in July 2015).

There are put and call options in place between TFS and Mr Clements and Dr Castella which are exercisable prior to 31 July 2016. These options require TFS to acquire the retained shares on the same terms as TFS acquired the balance of the shares at completion and TFS expects to exercise its call option within this timeframe.

Additional requirements
Further to the purchase prices, TFS will provide minimum funding support to ViroXis and Santalis for product development and other costs. The costs to TFS will be US$2.5 million per year for five years for each of ViroXis and Santalis (total of US$25 million over 5 years).