Industry Trend Analysis - Varuby's EC Approval Will Further Amplify Interest In Tesaro - JUNE 2017

BMI View: This approval further s Tesaro ' s position as a major player in the growing chemotherapy-induced nausea and vomiting drugs market, and marks the company ' s expansion into Europe . Blockbuster sales are ahead for Tesaro and the firm is a likely acquisition prospect.

Tesaro has further increased its attractiveness as a potential acquisition target with the EC approval of Varuby (oral rolapitant tablets) for the prevention of delayed nausea and vomiting associated with highly and moderately emetogenic cancer chemotherapy in adults. This follows the March 27 2017 swift FDA approval of the company's PARP inhibitor Zejula (niraparib) for the maintenance treatment of adult patients with recurrent epithelial ovarian, fallopian tube, or primary peritoneal cancer who are in a complete or partial response to platinum-based chemotherapy. Varuby will be Tesaro's first commercial product in Europe, with commercial launches expected to begin on a country-by-country basis by the end of Q217. An MAA for niraparib is under review by the EMA.

Tesaro: Blockbuster Sales Ahead
Forecast Annual Product Sales (USDmn)
Source: Bloomberg, BMI

Rising Cancer Incidence Driving CINV Market

The World Health Organization notes that cancer is one of the leading causes of morbidity and mortality worldwide, with approximately 14mn new cases in 2012, and the number of new cases is expected to rise by about 70% over the next two decades. A rising incidence of various types of cancer is likely to result in an increasing number of patients undergoing chemotherapy and drive the chemotherapy-induced nausea and vomiting (CINV) drugs market.

Affecting 70-80% of patients undergoing chemotherapy, CINV is one of chemotherapy's most debilitating side effects, often attributed as a leading cause of premature discontinuation of cancer treatment. It is categorised into three main phases: the acute phase occurs within 24 hours of chemotherapy administration, the delayed phase occurs from 24 to 120 hours after chemotherapy administration, and the overall phase encompasses zero through 120 hours after administration. Acute-phase CINV is mediated primarily by peripherally released serotonin that binds to 5-HT 3 receptors in the vagal afferent neurons. Delayed-phase CINV is caused primarily by binding of substance P to the central neurokinin-1 (NK-1) receptors [1].

As noted by Heron Therapeutics, most chemotherapy agents cause some degree of nausea and vomiting. However, the chemotherapy agents that cause the worst degree of nausea and vomiting are categorised into two groups: moderately emetogenic chemotherapy (MEC) and highly emetogenic chemotherapy (HEC); 30-90% of patients undergoing MEC and more than 90% of patients undergoing HEC experience vomiting without preventative treatment.

Varuby Targets Delayed CINV

Up to 50% of patients undergoing highly or moderately emetogenic chemotherapy experience delayed CINV, even when prescribed a 5-HT 3 receptor antagonist and a corticosteroid. Blocking both 5-HT 3 and NK-1 receptors has been shown to offer better control of nausea and vomiting than inhibiting 5-HT 3 receptors alone. Varuby is a selective and competitive antagonist of human substance P/NK-1 receptors that is rapidly absorbed and slowly eliminated, with a plasma half-life of seven days. Adding a single dose of Varuby to an anti-emetic regimen, including a 5-HT 3 receptor antagonist and corticosteroid, within two hours prior to each chemotherapy cycle as part of combination therapy further improves prevention of delayed CINV.

A single 180mg dose (two tablets) of Varuby is to be administered within two hours prior to initiation of each chemotherapy cycle, but at no less than two-week intervals, as part of combination therapy. Results from three global Phase III trials of Varuby demonstrated a significant reduction in episodes of vomiting or use of rescue medication during the 25 to 120-hour period following administration of emetogenic chemotherapy, including cisplatin, carboplatin and anthracycline/cyclophosphamide-based regimens. In addition, patients who received Varuby reported experiencing less nausea that interfered with normal daily life and fewer episodes of vomiting over multiple cycles of chemotherapy. Tesaro is working with the appropriate national authorities in the European countries to support reimbursement and availability of Varuby to ensure that patients who may benefit from the drug have access to it.

New Drugs Also Driving Market Growth

As well as a rising cancer incidence, new and more efficacious therapeutic solutions to treat CINV are also contributing to the growth of the global CINV drugs market. Oral rolapitant was approved by the FDA on September 1 2015 and is marketed by Tesaro in the US under the brand name Varubi. According to Tesaro, for the month of December 2016, Varubi achieved greater than 40% market share in the oral NK-1 market in the US, which represents the market-leading position in the category. Other new entrants include Helsinn's Akynzeo, an oral fixed-dose combination of netupitant, a highly selective NK-1 receptor antagonist, and palonosetron, a 5-HT 3 receptor antagonist, for the prevention of CINV (FDA-approved in October 2014); and Heron's Sustol (granisetron) extended-release injection (FDA-approved in August 2016).

Tesaro's pipeline also includes intravenous (IV) rolapitant. In January 2017, it was announced that the FDA had issued a complete response letter regarding the rolapitant IV NDA for the prevention of delayed nausea and vomiting associated with initial and repeat courses of emetogenic cancer chemotherapy. The Agency requested additional information regarding the in vitro method utilised to demonstrate comparability of drug product produced at the two proposed commercial manufacturers for rolapitant IV that were included in the NDA. Tesaro planned to address the FDA's questions expeditiously and complete this application, which it expected to enable approval in H117.

Tesaro's Attraction Increases

Biotechs are a sought-after acquisition target and Tesaro is increasing its attractiveness, now with two marketed products in the oncology arena and expansion into the European market. While Zejula may have been the third PARP inhibitor to be approved, which is a disadvantage, it was the first to be approved that does not require BRCA mutation or other biomarker testing, and Tesaro is aiming to build a robust niraparib franchise by assessing activity across multiple tumour types and by evaluating several potential combinations of niraparib with other therapeutics. The company also has numerous agreements: Johnson & Johnson has claimed exclusive rights to nirparib in prostate cancer, which highlights the interest by big pharma.

[1] Highlights in CINV From the 2016 MASCC/IS Annual Meeting. Clinical Advances in Hematology & Oncology; August 2016, Volume 14, Issue 8, Supplement 10

Tesaro Outperforming
Relative Share Price Versus NASDAQ Biotechnology Index
Source: Bloomberg, BMI