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Cancer drug once bought for US$7m may now fetch US$18b

NEW YORK — An overlooked drug bought by a biotech company for a mere US$6.6 million (S$8.94 million) a decade ago could become one of the biggest selling cancer treatments ever.

Photo: Getty Images

Photo: Getty Images

NEW YORK — An overlooked drug bought by a biotech company for a mere US$6.6 million (S$8.94 million) a decade ago could become one of the biggest selling cancer treatments ever.

Those high expectations have its maker, Pharmacyclics, considering selling itself in a deal that could be worth as much as US$18 billion.

The Sunnyvale, California-based company has attracted interest from companies including Johnson & Johnson and Novartis AG, Bloomberg reported yesterday (Feb 25). Cancer is one of the most lucrative areas of drug development, and Imbruvica is an easy-to-use pill that costs around US$100,000 a year, avoids certain serious side effects of chemotherapy, and patients can stay on it for long periods of time.

The drug has also made a billionaire of Chief Executive Officer Robert W. Duggan. Duggan owns 13.5 million shares, or 18 per cent, of Pharmacyclics. The stock constitutes the bulk of his US$3.2 billion net worth, according to the Bloomberg Billionaires Index. He amassed most of the shares at a cost of US$42 million between 2004 and 2011, when he used his holdings to take a board seat and eventually control of the company.

The drug is projected to join the ranks of other top-selling oncology drugs, with US$4.2 billion in estimated sales in 2019, according to an average of estimates by analysts.

Imbruvica “certainly has the potential of Gleevec-like revenue,” said Mr Brian Druker, director of the Knight Cancer Institute at Oregon Health & Science University, referring to Novartis AG’s US$4.75 billion drug for chronic myeloid leukemia. “It’s a big deal and the responses have been impressive” in chronic lymphocytic leukemia, one of its main uses.

A BARGAIN

While the drug is now approved for both mantle cell lymphoma and chronic lymphocytic leukemia, at the time its promise wasn’t obvious, said Mr Druker.

“There was no slam dunk there,” said Mr Druker. “It was risk taking and vision and believing in something and getting into patients and seeing what happens.”

Gleevec, which Mr Druker pioneered, attacks the main gene mutation that causes CML, or chronic myeloid leukemia. In CLL, it wasn’t clear that a pathway blocked by Imbruvica would prove crucial in slowing down tumors until it was tested in people, he said.

In one 391 patient study, Imbruvica significantly delayed progression of the disease and lowered the death rate by more than half in patients who had failed other therapies or relapsed.

‘MAJOR ADVANCES”

“It is one of the major advances in CLL treatment in the past couple of years,” said Mr Jae Park, an adult leukemia doctor at Memorial Sloan Kettering Cancer Center. “It is not a cure, but it is relatively easily tolerable.” That’s important because many cases of CLL occur in older patients, and some cases can progress very slowly.

Like Gleevec, the number of people on the drug has potential to grow greatly over time, as patients using the drug live longer and if it ends up replacing chemotherapy as an initial treatment for CLL, said Mr Brian Skorney, an analyst at Robert W. Baird. The sales trajectory of Imbruvica “has really blown away every other oncology launch with the exception of Avastin,” made by Roche Holding AG, he said.

Pharmacyclics got the drug in 2006, when it bought a group of drugs for US$2 million in cash, and 1 million shares. Mr Duggan took control two years later, ousting then-CEO and co-founder Richard Miller and three other board members after an experimental cancer drug failed. Mr Duggan ordered researchers to focus on a new series of experimental treatments, one of which became Imbruvica.

INVESTOR HISTORY

A sale of Pharmacyclics would be in keeping Mr Duggan’s investment history. The billionaire has invested in and then sold half a dozen businesses starting in the late 1960s, including Cookie Muncher’s Paradise, a bakery business that is now part of Panera Bread, and MAG International BV, an eastern European billboard company he sold in 2006 to JCDecaux SA.

Mr Duggan is also a member of the Church of Scientology. He’s one of the organisation’s largest donors, with gifts of at least US$20 million, including some Pharmacyclics shares. Mr Duggan confirmed membership in the organization in 2013 while declining to confirm his giving.

“I feel it is an honor and personal obligation to share my financial success with Scientology,” he wrote in a 2013 e-mail to Bloomberg News. BLOOMBERG

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