Merck & Co Makes Biggest Oncolytic Virus Bet Since Amgen in 2011

February 21, 2018 Merck & Co makes biggest oncolytic virus bet since Amgen in 2011

Jacob Plieth

You might have expected commercial failure and the lack of convincing clinical data to have deterred big pharma from oncolytic viruses. But you’d have been wrong, as Merck & Co today showed when it bought the Australian biotech Viralytics for $394m.

The massive share price premium – 184% – suggests that this was an asset Merck had to own, though in the current environment a deal of this size hardly moves the needle. Things were different when Amgen paid $424m for Biovex in 2011, and other big pharmas have quietly continued to pursue oncolytic viruses, most likely attracted by their potential as combination treatments (see table below).

A good recent example was Pfizer buying a majority stake in the private company Ignite Immunotherapy in December 2016, including the promise of full R&D funding and a full buyout option. The stated aim of that deal was to use oncolytic viruses in combination with immune checkpoint inhibitors.

Keytruda combo

A similar focus lies behind Merck’s Viralytics acquisition. The two companies were already studying Viralytics’ Cavatak in combination with Merck’s Keytruda in phase I studies against bladder cancer (Keynote-200), melanoma and NSCLC.

A separate Cavatak combo, with Bristol-Myers Squibb’s Yervoy in 18 melanoma subjects, yielded promising data at last year’s AACR meeting: unconfirmed remission rates were 60% in checkpoint therapy-naive and 38% in experienced patients, with “surprisingly” only one serious treatment-related adverse event.

Cavatak is a formulation of a common cold coxsackievirus, which like other oncolytic viruses is supposed to infect and kill cancer cells preferentially. Other oncolytic viruses include vesicular stomatitis, herpes simplex and reovirus, some with viral virulence and functional genes deleted, and others with gene insertions; for instance, Amgen’s Imlygic expresses GM-CSF.

Selected oncolytic virus projects

Project Company Note

Marketed

Imlygic Amgen HSV-1, genetically modified to express GM-CSF

Oncorine Shanghai Sunway Biotech Adenovirus type 5; sold in China

Phase III

Copenhagen strain vaccinia poxvirus, genetically modified to Pexa-Vec Transgene/Sillajen express GM-CSF

Reolysin Oncolytics Biotech Reovirus

Phase II

DS-1647 Daiichi Sankyo 3rd-generation HSV-1

TG1042/ ASN- Transgene/Ascend Adenovirus-interferon-γ 002

TG6002 Transgene Oncolytic vaccinia virus expressing the suicide gene FCU1

Cavatak Merck & Co (Viralytics) Coxsackievirus A21 GL-ONC1 Genelux Selected oLnacboolryatoicr yv sirturasi np GroLjVe-c1ths68

Marabex Turnstone Biologics/Abbvie Bioselected from rhabdovirus isolates

Orca Therapeutics/VCN ORCA-010 Adenovirus serotype 5 Biosciences

ParvOryx Oryx Parvovirus H-1

LOAd703 Lokon Pharma Adenovirus that introduces expression of CD40L & 4-1BBL

PV701 Wellstat Group Replication-competent Newcastle disease virus strain

MV-NIS Vyriad Edmonston strain of measles virus

ONCOS-102 Targovax Adenovirus serotype 5

Seprehvir Sorrento HSV-1

Enadenotucirev Psioxus Non-naturally occurring Group B adenovirus

CG0070 Cold Genesys Common cold adenovirus modified to express GM-CSF

Telomelysin Oncolys Biopharma Adenovirus that introduces expression of hTERT promotor

Phase I

JX-929 Sillajen Biotherapeutics Western Reserve strain of oncolytic vaccinia virus

VSV Cancer AstraZeneca/Omnis Vesicular stomatitis virus Project

Ad-VirRx 007 Multivir Adenovirus overexpressing Adenovirus Death Protein

Preclinical

Psioxus/Bristol-Myers Enadenotucirev additionally encoding CD80 & CD3 Ab NG-348 Squibb fragment

Viratherapeuics/Boehringer Vesicular stomatitis virus pseudotyped with lymphocytic VSV-GP Ingelheim choriomeningitis virus glycoprotein

WO-12 Western Oncolytics/Pfizer Oncolytic vaccinia virus expressing undisclosed genes

Ignite Immunotherapy Undisclosed Undisclosed, IV delivery (Pfizer)

Source: EvaluatePharma.

However, Imlygic has shown how far the oncolytic virus approach still is from living up to its early promise. Amgen’s $424m acquisition of its originator, Biovex, included another $575m in future milestones, yet Imlygic, launched for melanoma in 2015, barely generated sales of $50m last year.

In fact, most companies now accept that oncolytic viruses only have promise in combination, as shown by studies like that of Imlygic and Yervoy. Another major problem of the approach is the need for cumbersome intratumoural injections, and work is increasingly geared towards developing systemically available viruses.

At roughly the same time that Pfizer bought Ignite, Bristol handed over $50m to Psioxus to develop NG-348, an armed oncolytic virus; this deal yielded Psioxus a $15m milestone a year later.

Earlier, big pharma interest was seen when Astrazeneca licensed Omnis Pharmaceuticals’ lead, a vesicular stomatitis virus-based asset. And Boehringer Ingelheim’s 2016 tie-up with Viratherapeutics was worth €20m ($25m) up front (Setbacks fail to stifle oncolytic virus business development, December 13, 2016).

With the industry increasingly looking at ways of making “cold” tumours immunogenic – witness Bristol’s recent $1.9bn deal with Nektar – there can be little doubt as to what piqued Merck’s interest in Viralytics: early findings from the Keynote-200 study of Cavatak and Keytruda suggested upregulation of PD-L1 expression.

Keynote-200 is set to yield its next update in the second quarter. Perhaps Merck thought it wise to strike while it could still justify the price. Study Trial ID Keynote-200 NCT02043665