- Swiss drugmaker Roche will pay Blueprint Medicines $675 million in cash for rights to pralsetinib, an experimental targeted therapy the biotech has been developing for tumors with abnormalities in a gene known as RET.
- Through the deal — the second between the two companies since 2016 — Roche will also buy $100 million in Blueprint shares at $96.57 apiece, a roughly 26% premium to the stock's Monday closing price. Blueprint could receive another $927 million in conditional payments tied to development to pralsetinib as well as to a second-generation RET-targeting drug.
- Blueprint has been considered a potential buyout target ever since Eli Lilly bought rival targeted cancer drugmaker Loxo Oncology. But the Roche deal, which centers on Blueprint's most advanced drug, suggests the biotech aims to remain independent.
Over the past few years, Blueprint has looked like a redux of Loxo, which developed several drugs for rare, genetically defined cancers and then was acquired at a premium by Lilly.
Blueprint and Loxo even targeted the same rare type of tumor — marked by alterations in the RET gene — with their therapies. Loxo, now under Lilly's control, won U.S. approval of its drug Retevmo in May. Blueprint's pralsetinib could follow later this year.
Their paths appear to have diverged on Tuesday, however. The Roche collaboration "provides us with a clear pathway to financial independence," CEO Jeff Albers said in a Tuesday morning conference call.
Blueprint plans to use the cash from the deal to build its sales teams and invest in drug research, including a program for systemic mastocytosis in early clinical testing. The company reported $375 million in cash at the end of the first quarter.
Blueprint already has one drug on the market, Ayvakit, for a small subset of patients who have gastrointestinal stromal tumors, or GIST, and haven't responded to multiple treatments. But Ayvakit doesn't earn Blueprint much — sales totaled $3.45 million last quarter — and the drug failed a trial in broader set of GIST patients.
Pralsetinib, by contrast, represents Blueprint's biggest opportunity for near-term revenue, along with its efforts to expand Ayvakit into systemic mastocytosis. The company aims to test pralsetinib in earlier lines of treatment and ask for a "tissue agnostic" approval, meaning regardless of where a patient's tumor originated, chief business officer Kate Haviland said on the conference call.
Blueprint will now split any U.S. profits on pralsetinib with Roche, which will sell the drug outside the U.S. and China. The involvement of Roche, the world's top cancer drugmaker by sales, could help Blueprint take on competition with Eli Lilly, should pralsetinib win approval.
Roche also runs a sizable diagnostic business, which could help in marketing a cancer drug for a tumor type that's only found in 1% to 2% of lung cancer patients, and between 10% and 20% of patients with a type of thyroid cancer.
There's no Food and Drug Administration-approved test for RET abnormalities, so local laboratory tests, such as those available at major cancer centers, are currently used to confirm an alteration in the gene.
Pralsetinib is under review in the U.S., Europe and elsewhere for RET fusion-positive non-small cell lung cancer and thyroid cancer, as well as RET mutation-positive medullary thyroid cancer. CStone Pharmaceuticals holds Chinese rights to pralsetinib.
Blueprint and Roche started working together in 2016, when the biotech got $45 million to start developing targeted cancer drugs that could be useful in immunotherapy regimens. The first tumor target emerged from that work late last year.
The deal marks another bet on targeted cancer drugs for Roche, meanwhile. The company bought Ignyta for $1.7 billion in 2017 for a drug that was later approved under the brand name Rozlytrek for cancers characterized by fusions in the TRK gene. And the pharma acquired Foundation Medicine, a developer of tumor profiling tests, in 2018.