Blog Coverage Shire PLC Terminates Collaboration Agreement with Momenta Pharma for M923

LONDON, UK / ACCESSWIRE / September 28, 2016 / Active Wall St. blog coverage looks at the headline from Shire PLC (NASDAQ: SHPG). Shire and Momenta Pharmaceuticals Inc. (NASDAQ: MNTA) announced on September 27, 2016, that former had ended a five-year agreement for collaboration with Momenta Pharma for the development and commercialization of a proposed biosimilar of HUMIRA (adalimumab). Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

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According to the press release issued by Momenta, that “based on a comprehensive portfolio assessment, following the acquisition of Baxalta,” Shire has decided to terminate the collaboration agreement for the development and commercialisation of M923. The original collaboration agreement was signed in 2011 between Momenta Pharma and Baxalta. Since Shire acquired Baxalta, it would have to abide by the terms of the original agreement. According to the terms, the agreement will terminate only after twelve months of the notice and hence Shire will have to continue funding the M923 program till then.

Shire will immediately start the process of transferring to Momenta Pharma all ongoing clinical, regulatory, and commercialization data with regards to M923. Due to the termination, Momenta Pharma would regain all the global and development rights to M923.

Craig Wheeler, President and CEO of Momenta Pharma stated on the matter:

“We view Shire’s decision as a significant opportunity for us to capture additional value from this program for the Company and its shareholders. We remain very excited about the potential for our biosimilar HUMIRA candidate.”

The history of the companies’ involvement in the agreement

Baxalta came into existence in July 2015, as a result of the spin off by Baxter International’s global biopharmaceutical business – Baxter BioScience. Shire had announced the merger with Baxalta in January 2016 for $32 billion, which was finalized in June 2016. The combined entity became one of the top leader in rare diseases and other specialized disorders. Baxalta became a subsidiary of Shire and was focused on products in specialty areas of hematology, immunology, and oncology. Baxalta now under Shire continued with the development and clinical trials for the various drugs including M923.

The Original drug HUMIRA (adalimumab)

HUMIRA is the highest selling TNF (tumor necrosis factor) blocker medicine approved for the treatment of rheumatoid arthritis, chronic plaque psoriasis, Crohn’s disease, ankylosing spondylitis, psoriatic arthritis, and polyarticular juvenile idiopathic arthritis. Humira is a flag ship product of AbbVie Inc. with approximate sales of $ 14 billion in 2015.

The Biosimilar – M923

M923 is a biosimilar of HUMIRA and is currently in the Phase III trials in patients with chronic plaque psoriasis. The trials are to study the safety, efficacy, and immunogenicity of M923 in comparison to HUMIRA. M923 was developed in collaboration by Momenta Pharma and Baxalta Incorporated vide an agreement in 2011. The pivotal clinical trial for M923 was started in October 2015.

Future Outlook

Shire has a vision of double-digit, top-line revenue growth with a goal to achieve total revenue in excess of $20 billion by 2020. Its focus is on development of drugs for rare diseases and nearly 65% of its revenues, after the Shire-Baxalta merger, come from this stream. Biosimilars were not a part of Shire’s vision.

Apart from HUMIRA biosimilar, Shire has also returned rights of CHS-0214 (etanercept) another biosimilar for Enbrel (etanercept), an Amgen Inc. product. CHS-0214 (etanercept) was being developed by Baxalta in collaboration with Coherus BioSciences. Coherus will regain rights to CHS-0214 etanercept in Europe, Canada, Brazil, the Middle East and other territories.

As far as Momenta Pharma is concerned, it will need to gear up fast as competition from other companies who are working on biosimilars for HUMIRA heats up. The US FDA has given its approval for Amgen’s biosimilar for HUMIRA – Amjevita (adalimumab-atto). If approved, Amgen expects to launch the drug by 2018. In July 2016 Samsung Bioepis’ HUMIRA biosimilar – SB5 has been accepted for review by the European Medicines Agency. SB5 will be marketed by Biogen. In March 2016, Merck Group was in the late stage trials for its HUMIRA biosimilar – MSB11022. In India, Zydus Cadila has already launched a HUMIRA biosimilar product – Exemptia in 2014.

Stock Performance

Shire stock prices have been rising since July 2016, and on Tuesday, the stock closed the trading session at $200.22, slightly up 0.57% from its previous closing price of $199.09. A total volume of 1.21 million shares have exchanged hands, which was higher than the 3-month average volume of 1.19 million shares. Shire’s stock price advanced 5.08% in the last month, 17.17% in the past three months, and 18.91% in the previous six months. The stock is trading at a PE ratio of 31.80 and has a dividend yield of 0.40%.

Momenta Pharma’s share price, which has been on a bearish track has been slowly regaining its pace, finishing yesterday’s trading session at $11.86, advancing 1.89%. A total volume of 323.11 thousand shares exchanged hands. The stock has advanced 15.93% and 33.11% in the last three months and past six months, respectively.

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