Ariad Narrows Geographic Reach To Maximize Commercial Resources

The biotech has been streamlining its operations through licensing deals and changing its R&D strategy to better reflect its new geographic makeup – moves that could make it attractive to buyers.

Ariad Pharmaceuticals Inc. has been cleaning up its act in hopes of becoming a takeout target, but has plans in the meantime to more than double the patient populations it serves in case no acquirer swoops in with a buyout opportunity.

The Cambridge, Mass biotech has been contributing to news flow over the last couple of months as it sold off its European operations, cut costs, announced a strategic review of its assets and presented positive data for its lead pipeline product.

The latest news coming out of the company is the rolling New Drug Application Ariad has initiated for its cancer drug brigatinib. The biotech announced June 17 that it has begun the process and hopes to have the anaplastic lymphoma kinase (ALK) inhibitor on the market by early 2017. The company has already filed the first section of its NDA, including the non-clinical section that includes pharmacology and toxicology.

Ariad is seeking approval of brigatinib for patients with ALK+ non-small cell lung cancer (NSCLC) who are resistant to Pfizer's Xalkori (crizotinib). Brigatinib already has FDA breakthrough therapy designation and orphan drug status. Ariad hopes to position the ALK inhibitor as a best-in-class compound, though the ALK inhibitor class continues to grow.

Ariad said during an investor meeting held June 17 that it is hoping for accelerated approval and will be ready to commercialize the product by year-end. The company presented data from the ALTA study at the recent American Society of Clinical Oncology meeting that showed brigatinib demonstrated progression-free survival of 12.9% in post-crizotinib patients and showed an intracranial objective response rate (ORR) of 67% in measurable patients, which could turn into a competitive advantage.

"Following FDA approval, we will accelerate our efforts to drive awareness of the data, the clinical benefit-risk profile, and to ensure physicians [can] appropriately select patients, build experience with their own patient populations, resulting in increasing confidence. In addition to the product, we will ensure that we wraparound services both for the physician and the patient to make it easy to start and continue brigatinib therapy, and we will continue to investigate brigatinib, particularly with a reference in earlier line setting," said Jennifer Herron, who joined the company three weeks earlier as chief commercial officer.

Doubling Down

Ariad's strategy is to double the patient population of brigatinib and its already-marketed cancer drug Iclusig (ponatinib) by adding earlier lines of therapy.

"The key point here is that currently the total adjustable market of Iclusig is between 1,000 and 2,000 patients. If we are able to move into that second line through OPTIC 2L, we are able to more than double that eligible patient population," new CEO Paris Panayiotopoulos said. "For brigatinib, [it's a] similar story in a sense of lines of treatment. So when you combine second and third line, you get approximately 4,000 patients or just below that. And by going into the first-line setting, we can more than double that eligible patient population as well."

Ariad has initiated the ALTA-1L study testing brigatinib in the first-line setting, which is expected to report out next year. The company is also conducting the OPTIC and OPTIC-2L studies to expand Iclusig's patient population, which will also report out next year. Ariad has a cost-sharing agreement on the OPTIC trials with Incyte Corp., which recently licensed the European rights to Iclusig and bought out Ariad's EU infrastructure for $140m upfront, royalties and $135m in potential milestones (Also see "Deal Watch: Mylan Counts On A Renaissance For Expansion" - Pink Sheet, 16 May, 2016.).

Ultimately, Ariad believes that Iclusig has the potential to serve more than 18,000 patients in the US and thousands more in the rest of the world. In an effort to cater to the larger patient population, Ariad has doubled its US sales force – although the company would not report the exact number of reps.

Domestic Deep Dive

Interestingly enough, the deal with Incyte also included a provision that would allow any potential acquirer to terminate the license in exchange for a financial payment and royalties, setting Ariad up nicely to be taken out hassle-free.

With the Incyte deal, Ariad also became a US-only company. "Our operations will be limited to the US and we will continue to take the cost disciplined approach that we've been taking already to keep ourselves lean, streamlined, and making very quick and good decisions moving forward," said Panayiotopoulos. "The US drives the majority of global profits in oncology, driven by approximately 50% of global sales. But also the fact that here, we are a single country with a single language, with a single healthcare system, with a single regulatory system. So it makes operations much more efficient than it does in other parts of the world," he explained.

Since signing the pact with Incyte, Ariad has also struck regional deals with Pint Pharma to distribute Iclusig in Latin America and with Biologix to distribute Iclusig in the Middle East and North Africa. Both will provide Ariad with further royalty revenue streams.

"In terms of ex-US, we have already proved that with the Incyte transaction, with the Biologix transaction, and the Pint transaction, we can have ex-US revenues that are very efficient with minimal costs and still maintain that partnership and strategic optionality moving forward," Panayiotopoulos noted.