Pfizer's acquisition of Medivation lifts Clal Biotech


Medivation has signed an agreement to buy an anti-cancer drug being developed by Clal Biotech-controlled CureTech.

Pfizer is making a concerted effort in oncology, and among the beneficiaries are investors in Clal Biotechnology Industries Ltd. (TASE: CBI). The US pharmaceutical giant has decided to acquire Medivation, a Nasdaq-listed company, for $14 billion in cash. The Medivation share price leaped 21% in yesterday's trading as a result (the offer to purchase is 21% higher than the market price for the Medivation share at the end of Friday's trading).

Medivation, a biotechnology company that develops drugs for treatment of serious diseases, including cancer, signed an agreement in December 2014 with CureTech, a company controlled by Clal Biotech with a 53% stake. Under the agreement, Medivation will buy Pidilizumab, product designed to treat specific types of cancer, mainly in children.

Now, following the acquisition of Medivation, Pzifer and Medivation has said that CureTech's product can potentially fit in with other immuno-oncological treatments in Pfizer's portfolio. Furthermore, Medivation said that Pfizer is the ideal partner for bringing the product forward to the next development stages, so that it will be available as a drug for treating patients as soon as possible. The Clal Biotech share price responded with an 8.26% jump. Medivation has an oncological drug approved for marketing and two others in development, one of them being CureTech's drug.

Successful trial, but the mechanism is unclear

Last June, Clal Biotech reported the results of a small trial conducted with CureTech's product. The trial, presented at the leading cancer conference, included nine children with brainstem glioma. The current life expectancy of patients with this disease is 9-12 months, and fewer than 10% of the patients survive more than two years. The average life expectancy of the participants in the trial was 15.6 months, and one of the patients has already lived with the disease for two years, without any deterioration in his condition.

The main trial being conducted by Medivation is not on this format; it involves a particular type of blood cancer. Results from this trial are expected in another few years. Following the results from the small trial, Medivation said that the figures from the trial were contributing to optimism about the product's chances of success with solid cancers, in addition to the existing positive indications from the blood cancer trial.

In March 2016, the US Food and Drug Administration (FDA) authorized Medivation to continue the trial, after having halted it for a period of time due to questions about the mechanism through which the product worked. In the past, CureTech portrayed the product as operating through the PD-1 mechanism used by most immunotherapy drugs regarded as the hot trend in the cancer market, such as Merck's Ketruda.

Medivation said in June,"… we continue to characterize its unique and differentiated mechanism of action." This has both an advantage and a disadvantage: while in the past, the product was a late and less attractive player in a very hot, but competitive, market, it is now operating in the dark, but could very well be distinguishable from other products. In any case, if the product reaches the market, Clal Biotech, controlled by Len Blavatnik, will be entitled to receive nearly $400 million, plus royalties amounting to 5-11% of sales.

Published by Globes [online], Israel business news - - on August 23, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

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