Novartis Plans to Acquire Endocyte to Expand Expertise in Radiopharmaceuticals

Earlier this month Swiss-based Novartis announced that it has entered into an agreement and plan of merger with Endocyte, a US-based biopharmaceutical company focused on developing targeted therapeutics for cancer treatment. The planned merger will expand Novartis’ expertise in radiopharmaceuticals and build on commitment to transformational therapeutic platforms.

Targeted therapies
Endocyte uses drug conjugation technology to develop targeted therapies with companion imaging agents, including 177Lu-PSMA-617, a potential first-in-class investigational radioligand therapy for the treatment of metastatic castration-resistant prostate cancer (mCRPC). The company’s lead drug, 177Lu-PSMA-617 targets the prostate-specific membrane antigen (PSMA), present in the majority of patients with mCRPC, and has shown promising Phase II data.

?Since acquiring exclusive worldwide rights to develop and commercialize PSMA-617 agents in 2017, the entire Endocyte team, along with our partners, have worked tirelessly to build a leading radioligand [therapy] portfolio and create value for patients and shareholders alike. We are thrilled that Novartis recognizes the potential for 177Lu-PSMA-617 to change the treatment landscape for men with metastatic castration-resistant prostate cancer (mCRPC), as well as the broader role that radioligand [therapy] may potentially play in the treatment of cancer,? said Mike Sherman, president and CEO of Endocyte.

?The global reach and expertise of Novartis in developing and commercializing radioligand [therapy] therapies will be critical in efforts for patients to benefit from these therapies as quickly as possible,? Sherman added.

The investigational drug currently included in the Phase III global VISION clinical trial in men with mCRPC, a disease with limited treatment options and significant unmet medical need.

If completed, the Endocyte acquisition would expand the Novartis radioligand therapy platform with both a potential near-term product launch and early-stage clinical development programs. The deal would also enable Novartis to harness its research and development expertise to investigate the potential development of 177Lu-PSMA-617 for use in earlier lines of prostate cancer therapy.

“Novartis has a strong legacy of addressing unmet needs with transformative therapies and is building a leadership capability in new, technology-driven platforms that address some of the world’s most complex health challenges, including cancer,”said Liz Barrett, Chief Executive Officer of Novartis Oncology.

“Today’s announcement about the proposed acquisition of Endocyte builds on our growing capability in radiopharmaceuticals, which is expected to be an increasingly important treatment option for patients and a key growth driver for our business. We are also excited about the opportunity to break into the prostate cancer arena with a near-term product that has the potential to make a meaningful impact for patients in great need of more options,” Barrett added.

Clinical trial
In a Phase II study, 50 patients with PSMA-positive mCRPC treated with 177Lu-PSMA-617 showed a median prostate specific antigen (PSA) progression free survival (PFS) of 7.6 months (p<0.0001).[1] Median overall survival for the first cohort of 30 patients enrolled was 13.5 months (p=0.0201).[1]

VISION is a global, prospective, open-label, multi-center, randomized Phase III trial of 177Lu-PSMA-617 in combination with best supportive care versus best supportive care alone. The trial is currently enrolling patients with mCRPC. In September, the US Food and Drug Administration (FDA) agreed to radiographic progression-free survival (rPFS) as an alternative primary endpoint to OS in the trial.

The Endocyte pipeline includes additional investigational RLTs, including 225Ac-PSMA-617 in preclinical studies for the treatment of mCRPC.

Radioisotopes
Radiopharmaceuticals such as 177Lu-PSMA-617 are innovative medicinal formulations containing radioisotopes that are used clinically for both diagnosis and therapy.

Through the acquisition of Advanced Accelerator Applications (AAA), Novartis acquired Lutathera? (lutetium Lu 177 dotatate / INN: lutetium (177Lu) oxodotreotide) – the first ever approved Peptide Receptor Radionuclide Therapy – for the treatment of somatostatin-receptor positive gastroenteropancreatic neuroendocrine tumors (GEP-NETs), an orphan disease.

In addition to these agents, also expects to have an Investigational New Drug application submitted in the fourth quarter of 2018 for its adaptor-controlled CAR T-cell therapy which will be studied initially in osteosarcoma.

Transaction Details
The transaction would be in the form of a merger of Endocyte and a newly formed Novartis subsidiary. Under the terms of the agreement and plan of merger, upon closing, holders of Endocyte common stock would receive US $ 24.00 in cash per share. This offer represents a premium of 54% percent to Endocyte?s closing price of US $ 15.56 on October 17, 2018.

The offer was unanimously approved by the board of directors of Endocyte and values Endocyte’s equity at US $ 2.1 billion.

Closing of the transaction is expected in the first half of 2019 and is subject to customary closing conditions, including the approval of Endocyte’s stockholders and receipt of regulatory approvals. Until closing, Endocyte will continue to operate as a separate and independent company.

The acquisition of Endocyte is planned to be funded through available cash.

Reference
[1] Hofman, M. [177Lu]-PSMA-617 radionuclide treatment in patients with metastatic castration-resistant prostate cancer (LuPSMA trial): a single-centre, single-arm, phase 2 study. The Lancet Oncology. 2018 Jun;19(6):825-833
[2] Endocyte Investor Presentation October 2018


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