Amgen, which aims to strengthen its cancer drug pipeline and expand its presence in Asia, is acquiring Five Prime Therapeutics in a $ 1.9 billion deal that reviews both goals.
On Thursday, Amgen announced that it had agreed to pay $ 38 in cash for each share of Five Prime, a premium of more than 70 percent over the company’s closing price on Wednesday. Five Prime develops immuno-oncology drugs and targeted cancer therapies. The jewel in the South San Francisco-based biotech pipeline is bemarituzumab (usually abbreviated as “Bema”), an antibody that is ready for Phase 3 testing in gastric cancer.
“This agreement expands our strategic need to grow our business internationally, particularly in the Asia-Pacific region, where gastric cancer is prevalent and where we previously stated that we expect sales to grow approximately 25% over the next 10 years,” said Amgen CFO Peter Griffin said on a conference call.
For Five Prime, the acquisition by California-based pharmaceutical company Thousand Oaks is a lifeline after a series of clinical and financial setbacks in recent years that have left much of biotechnology’s fortune on its lead antibody.
Stomach cancer accounts for more than a million cancer diagnoses worldwide and is the third leading cause of cancer deaths worldwide, only lung and colon cancer. Five Prime does not aim to treat all types of stomach cancer. The company developed bema to target fibroblast growth factor receptor 2 (FGFR2), a tumor growth protein that is overexpressed in an estimated 10% of gastric cancer patients.
With encouraging safety results from a small phase 1 study, Five Prime set out to move straight into phase 3 in 2019. The company began enrolling patients while also looking for a partner who could conduct the full clinical trial. According to Five Prime’s 2019 annual report, the plan was to conduct an early analysis to assess the effectiveness of the treatment. Depending on the result, the company may continue the study as a phase 3 test, terminate the study or change the design of the clinical study.
Five Prime noted in the report that even if it were approved by the Independent Data Monitoring Committee to proceed with the Phase 3 plan, conducting this study would require securing a pharmaceutical partner to pay for it. However, potential partners told the company that it was unlikely to recruit an employee without data from previously untreated patients with gastric or gastrointestinal cancer. Last year, the company abandoned its phase 3 plan and instead started a randomized phase 2 study.
Phase 2 results were released last November and showed that the Five Prime drug when combined with standard chemotherapy met the main goals of the study when compared to chemotherapy alone. The results were not without problems, however. Inflammation of the cornea and stomatitis, which is inflammation of the mouth and lips, were higher in the Bema group. In addition, more patients dropped out of the treatment group than the control arm.
David Reese, Amgen’s executive vice president of research and development, said corneal inflammation is not unexpected as the protein that bema targets is also expressed on corneal cells. This problem can be addressed with eye drops in future studies. Reese added that stomatitis was less of a driver in patients who dropped out of the study. The inflammation is a known side effect of chemotherapy, he said.
Amgen will proceed with a phase 3 test from bema. Stomach cancer is the main target, but Reese said the drug company will also look at other FGFR2b-driven cancers, such as squamous cell carcinoma of the lung, breast and ovarian cancers, and other solid tumors. Reese said Amgen will study combinations with other types of cancer drugs, such as checkpoint inhibitors and tyrosine kinase inhibitors.
The takeover by Amgen marks the latest turn on a long road for Five Prime. Founded in 2002 by Bay Area biotech veteran Lewis “Rusty” Williams, the company developed drug discovery technology that identifies proteins on cells that contribute to disease. The company used this technology to develop protein drugs that achieve these goals and used the platform to partner with larger companies such as GlaxoSmithKline, UCB and Bristol Myers Squibb.
In 2013, Williams went public with Five Prime drugs for inflammatory disease and cancer in clinical trials and raised $ 62.4 million in an initial public offering priced at $ 13 per share. Some of Five Prime’s drugs found their way into tests combined with cancer therapies from its partners. Cabiralizumab, a Five Prime antibody designed to block a protein called colony-stimulating factor-1, was tested in combination with nivolumab by BMS. However, the drug disappointed in 2017 after data from an early-stage test showed higher-than-expected toxicity.
In early 2019, Five Prime was restructured to save money. Jobs in research, pathology and manufacturing have been eliminated. Later that year, biotechnology restructured again, eliminating most of its collaborators who were involved in drug target discovery and the manufacture of therapeutic proteins. Most of the company’s laboratory equipment was auctioned last April, according to a Five Prime securities filing.
Five Prime implemented the corporate restructuring to continue to focus on the cancer drugs that had already reached clinical trials. Cabiralizumab was still one of those drugs. A little over a year ago, the antibody failed an interim study in pancreatic cancer. BMS acquired rights to this drug through an alliance that began in 2015. After Phase 2 failed, the pharmaceutical company said it would not sponsor any additional tests of this Five Prime antibody. At that point, Five Prime’s shares were trading at around $ 4.50 each.
BMS remains a partner in two other Five Prime cancer programs. SeaGen is the only remaining employee of the Company with an antibody-drug conjugate in preclinical development for an undisclosed target. In 2017, Zai Labs licensed the rights to develop and commercialize Bema in China, Hong Kong, Macau and Taiwan. The Shanghai-based company is responsible for developing and commercializing the drug in these markets. Amgen will inherit this agreement and receive a royalty on future net sales from Zai Lab.
Bema was the most advanced in clinical development among Five Prime’s partner and in-house programs. Amgen will evaluate Five Prime’s previous programs on an asset-by-asset basis, Reese said. Bema will join an Amgen pipeline that has gastric cancer drug candidates in early clinical development. AMG199 treats stomach cancer that overexpresses the protein mucin-17. AMG910 is under development for gastric cancer expressing the CLDN18.2 protein. Reese said the Five Prime drug fits in with Amgen’s strategy to develop targeted cancer therapies.
“One of our beliefs is that the future of oncology, by and large, is the marriage of immuno-oncology and precision medicine targeting specific molecular changes, and I think this fits well with this broader strategic heading and the other assets in our portfolio added.” he said.
The boards of directors of both companies have approved the transaction, which is expected to close in the second quarter of this year. If Five Prime receives a superior offer or if the company withdraws from the agreement, it must pay Amgen a termination fee of $ 76 million under the terms of the merger agreement.
Photo: Patrick T. Fallon / Bloomberg, via Getty Images