Dive Brief:
- Biogen has snagged exclusive, worldwide rights to ALKS 8700, an oral monomethyl fumarate prodrug, from developer Alkermes plc. For Biogen, this both increases its multiple sclerosis portfolio and brings a potential competitor to its Tecfidera (dimethyl fumarate) in house.
- ALKS 8700 is in Phase 3 for relapsing multiple sclerosis. Biogen will reimburse Alkermes for half of the 2017 ALKS 8700 development costs, beginning with a $28 million upfront payment for expenses already incurred. Beginning Jan. 1, Biogen will pay all development expenses related to ALKS 8700.
- Alkermes could receive milestone payments up to $200 million, beginning with an initial payment of $50 million, and mid-teens royalties on worldwide net sales of ALKS 8700. Alkermes is planning a new drug application for 2018.
Dive Insight:
Alkermes Plc's ALKS 8700 is a monomethyl fumarate prodrug that is converted into the active form in the body, and Alkermes will use the 505(b)(2) regulatory pathway to apply for approval to the Food and Drug Administration. This allows the company to reference Biogen’s Tecfidera (dimethyl fumarate), which is metabolized into monomethyl fumarate. The pathway includes pharmacokinetic bridging studies to establish bioequivalence to Tecfidera, along with data from the two-year EVOLVE-MS-1 safety study. EVOLVE-MS-2, a head-to-head study comparing the gastrointestinal tolerability of ALKS 8700 and Tecfidera, is expected to readout in the first half of 2018.
"This deal is a win for both sides," wrote Evercore ISI analyst Umer Raffat in a note to clients. Raffat said the deal takes the pressure off the mid-2020s Tecfidera patent cliff for Biogen, allowing it to use ALKS 8700 for lifecycle management. According to the analyst, there are already 25 or more generic versions of Tecfidera underway. For Alkermes, the tie-up with Biogen allows it to monetize ALKS 8700 more quickly without having to go through the 30-month wait or Paragraph IV certification.
"This collaboration has the potential to provide important benefits to patients with multiple sclerosis and immediately increases the value of ALKS 8700 to Alkermes," said Alkermes CEO Richard Pops. "In Biogen’s hands, we believe that patients will have broader and more rapid access to this important medicine. Meanwhile, we will focus our growing commercial capabilities on our expanding portfolio of medicines in psychiatry, including addiction, schizophrenia and depression."
Jefferies analyst Michael Yee also sees the deal as a win for Biogen, potentially eliminating a competitor to its best-selling multiple sclerosis drug.
"ALKS-8700 has shown low-single digit discontinuation rates versus Tecfidera which is about 15-20% in real-world settings. Based on conversations with docs, the single-biggest issue that holds back Tecfidera use and strips away perhaps 10-15% of revenue that they should be getting. The first month of the [Phase 3] study was presented at ECTRIMS 2017 showing low discontinuation and no serious GI adverse events," said Yee, noting the better tolerability of ALKS 8700 versus Tecfidera.
The deal is a win for Alkermes as well, notes analysts. "We think it was prudent to sell rights to ALKS 8700 given the SG&A expense Alkermes would have incurred to sell the product especially as a new entrant going up against the Biogen MS marketing machine which would have been an uphill battle. We believe that the improved GI-associated AEs could differentiate ALKS 8700 from Tecfidera although it's unclear the share it would take given Tecfidera is well-entrenched," wrote Jefferies' Biren Amin.