– Shire to Acquire Dyax for $5.9million and some possible extras.
– Angioedema market has treatments for attacks, but not prophylactic products for the prevention of HAE attacks.
– A primary reason for the acquisition, but not the only one, is getting to Dyax’s prophylactic Hereditary Angioedema (HAE) product.
– What will be the outcome of Biocryst’s lead HAE prophylactic drugavoralstat?
-Will Biocryst be able to compete in this market?
– – – – – – – – –
Shire (SHPG) – is acquiring the biotech firm Dyax (DYAX) for $5.9 billion to expand its portfolio of drugs treating a rare life-threatening disorder known as hereditary angioedema. In yesterday’s premarket trading, DYAX moved up more than $9, trading around $36.60 a 33% premium over its closing price on Friday.
Dyax shareholders will also receive $4 a share related to a non-tradable contingent value right in case its late-stage drug candidate DX-2930 for the treatment of hereditary angioedema, secures regulatory approval.
Lessons to Learn
Why the acquisition?
This is the question that jumps and should always jump into our mind during each and every announcemenf an acquisition. So, what could be the motive for Shire/Dyax unification?
It is obvious that the major motive is Dyax’ drug DX-2930 for the prophylaxis of hereditary angioedema (HAE). The Phase 1B data demonstrate a >90% reduction in HAE attacks compared to placebo in 300m /400mg arms in patients with > 2 angioedema attacks in 3 months time prior to study entry. DX-2930 is the lead investigational drug in Dyax’ pipeline. The drug has proven to be a highly potent long-acting human monoclonal antibody inhibitor of plasma kallikrein (pKal). Its patent might offer protection until beyond 2030.
During the pre-specified, primary efficacy interval of six weeks (Day 8 to 50), the HAE attack rate was reduced by over 90% with the DX-2930 combined 300mg and 400mg arms, with 0 attacks in the 300mg group, and 0.045 attacks per week in the 400 mg group compared to 0.37 attacks per week in the placebo group.
DX-2930 was well tolerated at all dose levels with no evidence of dose-limiting toxicity up to 400 mg. The most common adverse events were, injection site pain, and headache, which were not appreciably higher in the DX-2930 arms compared with placebo. No deaths or patient discontinuations occurred due to an adverse event and no evidence of dose-limiting toxicity were observed. There was no safety signal in treatment-emergent adverse events, clinical laboratory results, vital signs, or electrocardiograms.
The FDA granted DX-2930 Fast Track, Breakthrough Therapy and Orphan Drug designation. The investigational product has also received Orphan Drug status in Europe. It is expected to enter Phase 3 clinical trials by year-end 2015.
If approved for the prevention of Type 1 and Type 2 HAE, DX-2930 could be marketed in 2018 and could generate estimated annual global sales of up to $2.0 billion.
Although DX-2930 is definitely the main reason for acquisition, other reasons also attracted the firm, including, bringing to Shire Dyax’s well-established proprietary phage display antibody generation technology. This technology is what made it possible discovering, designing and developing of HAE drugs. Dyax technology could be very valuable in boosting Shire’s rare diseases discovery capabilities. Dyax’ acquisition will also bring Shire early-stage antibody pipeline programs that comprise drugs for autoimmune diseases, diabetic macular edema and thrombosis (or prevention of thrombosis that are complications of some diseases such as atrial fibrillation).
Furthermore, the acquisition of DX-2930 expands and extends Shire’s industry-leading HAE portfolio (FIRAZYR and CINRYZE) and in advancing its leadership position in rare diseases.
Prohost Observations and Comments
Dyax’ acquisition gave us the opportunity to investigate the HAE market, which has changed from “yet to find treatments” to “having a number of specific treatments” that meant to treat the HAE attacks only. No prophylactic treatments have yet reached the market, which is badly needed. That’s why Shire’s top motivation for acquiring Dyax was getting to its prophylactic HAE drug DX-2930.
Are there any other investigational prophylactic HAE drugs?
BioCryst (BCRX) has two investigational prophylactic HAE drugs: Avoralstat, which is the firm’s lead drug and BCX7353, which is Biocryst second generationdrug. Avoralstat, is a novel, selective inhibitor of plasma kallikrein aimed at preventing the HAE attacks. In January 2016, the final trial results will be announced and the firm will be ready to file NDA for FDA approval and file also for the European approval.
Great news?
It is early for reaching this conclusion. We are confident that Biocryst will be ready and willing to file the NDA to the FDA. We are not sure, however, that the FDA might be ready to accept it without having with it a necessary carcinogenicity study that the firm has yet to conduct. The study is known to take two years to complete.
So, if the FDA refuses the firm’s request for deferring the study, Biocryst will not be able to file for approval until 2018. This scenario would cause the drug to lose its advantage of reaching the market two years prior to Shire/Dyax’ drug DX-2930, which is expected to be approved and marketed in 2018.
Biocryst, we believe, is scientifically and technologically solid firm and will not drop dead because of the two years of delay. In addition, the firm has its second generation drug, BCX7353 that it also designed as a prophylactic for HAE attacks. This product is in phase 2 clinical trials, reaching there after amassing proof of concept and promising results from its preclinical and phase 1 studies. The data from these studies confirmed the superiority of BCX7353 over its first-generation drug avoralstat with once a day oral regimen vs. three times a day for avoralstat.
BCX-7353 is also expected to be granted approval in 2018, or 2019. It will still be able to compete well against the injectable drug belonging to Shire/Dvax. If this will be the case, Biocryst lead drug avoralstat. would have no role to play in the prophylactic HAE market space.
We love Biocryst and believe it will have a big role to play in advancing treatments for many difficult-to-treat rare diseases. Important, though, is that at this time, we wait for the FDA decision on differing the carcinogenicity study before we buy the stock, or further accumulate it. In case the FDA accepts Biocryst’s request for the deferral, the stock will stage a rally. Otherwise, the short investors are patiently waiting around the corner to vigorously act against BCRX.
Prohost Forward-Looking: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are our ‘opinions’ and we may be wrong. We may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to our thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.
News & Comments
November 3, 2015
Dyax Acquisition and Biocryst Future
– Shire to Acquire Dyax for $5.9million and some possible extras.
– Angioedema market has treatments for attacks, but not prophylactic products for the prevention of HAE attacks.
– A primary reason for the acquisition, but not the only one, is getting to Dyax’s prophylactic Hereditary Angioedema (HAE) product.
– What will be the outcome of Biocryst’s lead HAE prophylactic drugavoralstat?
-Will Biocryst be able to compete in this market?
– – – – – – – – –
Shire (SHPG) – is acquiring the biotech firm Dyax (DYAX) for $5.9 billion to expand its portfolio of drugs treating a rare life-threatening disorder known as hereditary angioedema. In yesterday’s premarket trading, DYAX moved up more than $9, trading around $36.60 a 33% premium over its closing price on Friday.
Dyax shareholders will also receive $4 a share related to a non-tradable contingent value right in case its late-stage drug candidate DX-2930 for the treatment of hereditary angioedema, secures regulatory approval.
Lessons to Learn
Why the acquisition?
This is the question that jumps and should always jump into our mind during each and every announcemenf an acquisition. So, what could be the motive for Shire/Dyax unification?
It is obvious that the major motive is Dyax’ drug DX-2930 for the prophylaxis of hereditary angioedema (HAE). The Phase 1B data demonstrate a >90% reduction in HAE attacks compared to placebo in 300m /400mg arms in patients with > 2 angioedema attacks in 3 months time prior to study entry. DX-2930 is the lead investigational drug in Dyax’ pipeline. The drug has proven to be a highly potent long-acting human monoclonal antibody inhibitor of plasma kallikrein (pKal). Its patent might offer protection until beyond 2030.
During the pre-specified, primary efficacy interval of six weeks (Day 8 to 50), the HAE attack rate was reduced by over 90% with the DX-2930 combined 300mg and 400mg arms, with 0 attacks in the 300mg group, and 0.045 attacks per week in the 400 mg group compared to 0.37 attacks per week in the placebo group.
DX-2930 was well tolerated at all dose levels with no evidence of dose-limiting toxicity up to 400 mg. The most common adverse events were, injection site pain, and headache, which were not appreciably higher in the DX-2930 arms compared with placebo. No deaths or patient discontinuations occurred due to an adverse event and no evidence of dose-limiting toxicity were observed. There was no safety signal in treatment-emergent adverse events, clinical laboratory results, vital signs, or electrocardiograms.
The FDA granted DX-2930 Fast Track, Breakthrough Therapy and Orphan Drug designation. The investigational product has also received Orphan Drug status in Europe. It is expected to enter Phase 3 clinical trials by year-end 2015.
If approved for the prevention of Type 1 and Type 2 HAE, DX-2930 could be marketed in 2018 and could generate estimated annual global sales of up to $2.0 billion.
Although DX-2930 is definitely the main reason for acquisition, other reasons also attracted the firm, including, bringing to Shire Dyax’s well-established proprietary phage display antibody generation technology. This technology is what made it possible discovering, designing and developing of HAE drugs. Dyax technology could be very valuable in boosting Shire’s rare diseases discovery capabilities. Dyax’ acquisition will also bring Shire early-stage antibody pipeline programs that comprise drugs for autoimmune diseases, diabetic macular edema and thrombosis (or prevention of thrombosis that are complications of some diseases such as atrial fibrillation).
Furthermore, the acquisition of DX-2930 expands and extends Shire’s industry-leading HAE portfolio (FIRAZYR and CINRYZE) and in advancing its leadership position in rare diseases.
Prohost Observations and Comments
Dyax’ acquisition gave us the opportunity to investigate the HAE market, which has changed from “yet to find treatments” to “having a number of specific treatments” that meant to treat the HAE attacks only. No prophylactic treatments have yet reached the market, which is badly needed. That’s why Shire’s top motivation for acquiring Dyax was getting to its prophylactic HAE drug DX-2930.
Are there any other investigational prophylactic HAE drugs?
BioCryst (BCRX) has two investigational prophylactic HAE drugs: Avoralstat, which is the firm’s lead drug and BCX7353, which is Biocryst second generationdrug. Avoralstat, is a novel, selective inhibitor of plasma kallikrein aimed at preventing the HAE attacks. In January 2016, the final trial results will be announced and the firm will be ready to file NDA for FDA approval and file also for the European approval.
Great news?
It is early for reaching this conclusion. We are confident that Biocryst will be ready and willing to file the NDA to the FDA. We are not sure, however, that the FDA might be ready to accept it without having with it a necessary carcinogenicity study that the firm has yet to conduct. The study is known to take two years to complete.
So, if the FDA refuses the firm’s request for deferring the study, Biocryst will not be able to file for approval until 2018. This scenario would cause the drug to lose its advantage of reaching the market two years prior to Shire/Dyax’ drug DX-2930, which is expected to be approved and marketed in 2018.
Biocryst, we believe, is scientifically and technologically solid firm and will not drop dead because of the two years of delay. In addition, the firm has its second generation drug, BCX7353 that it also designed as a prophylactic for HAE attacks. This product is in phase 2 clinical trials, reaching there after amassing proof of concept and promising results from its preclinical and phase 1 studies. The data from these studies confirmed the superiority of BCX7353 over its first-generation drug avoralstat with once a day oral regimen vs. three times a day for avoralstat.
BCX-7353 is also expected to be granted approval in 2018, or 2019. It will still be able to compete well against the injectable drug belonging to Shire/Dvax. If this will be the case, Biocryst lead drug avoralstat. would have no role to play in the prophylactic HAE market space.
We love Biocryst and believe it will have a big role to play in advancing treatments for many difficult-to-treat rare diseases. Important, though, is that at this time, we wait for the FDA decision on differing the carcinogenicity study before we buy the stock, or further accumulate it. In case the FDA accepts Biocryst’s request for the deferral, the stock will stage a rally. Otherwise, the short investors are patiently waiting around the corner to vigorously act against BCRX.
Prohost Forward-Looking: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are our ‘opinions’ and we may be wrong. We may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to our thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.
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