Opko Health Inc (OPK)

[tomsylver]

OPKO Strategic Investment Tesaro New Frontiers in the Fight Against Cancer

Video: ( http://www.youtube.com/watch?v=_v-ouUQu1k8 )

Uncle’s DD Note#

Tesaro 10-K Annual Report ( http://ir.tesarobio.com/secfiling.cfm?filingID=1104659-14-19488&CIK=1491576 )
Licensing with (Opko) Mar 14, 2014

Licensing Agreements

License for Rolapitant

In December 2010, we entered into a license agreement with OPKO to obtain an exclusive, royalty bearing, sublicensable worldwide license, to research, develop, manufacture, market and sell rolapitant. The license agreement also extends to an additional, backup compound, SCH900978, to which we have the same rights and obligations as rolapitant, but which we are not currently advancing. Under the OPKO license we are obligated to use commercially reasonable efforts to conduct all preclinical, clinical, regulatory and other activities necessary to develop and commercialize rolapitant.

Rolapitant In-License

In December 2010, the Company entered into a license agreement with OPKO Health, Inc., or OPKO, to obtain an exclusive, royalty-bearing, sublicensable worldwide license to research, develop, manufacture, market and sell rolapitant. The license agreement also extended to an additional, backup compound, SCH900978, to which the Company has the same rights and obligations as rolapitant, but which the Company is not currently advancing. Under the OPKO license the Company is obligated to use commercially reasonable efforts to conduct all preclinical, clinical, regulatory and other activities necessary to develop and commercialize rolapitant. Under the terms of the OPKO license, the Company paid OPKO $6.0 million upon signing the agreement and issued 1,500,000 shares of its Junior Preferred Stock. At the time of the license transaction, the fair value of Junior Preferred Stock was determined to be $630,000. The Company is also required to make development milestone payments to OPKO of up to an aggregate of $30.0 million if specified regulatory and initial commercial sales milestones are achieved. In addition, the Company is required to make additional milestone payments to OPKO of up to an aggregate of $85.0 million if specified levels of annual net sales of rolapitant are achieved. If commercial sales of rolapitant commence, the Company is required to pay OPKO tiered royalties on the amount of annual net sales achieved in the United States and Europe at percentage rates that range from the low teens to the low twenties, which the Company expects will result in an effective royalty rate in the low teens. The royalty rate on annual net sales outside of the United States and Europe is slightly above the single digits. If the Company elects to develop and commercialize rolapitant in Japan through a third-party licensee the Company will share equally with OPKO all amounts received by it in connection with such activities under the Company’s agreement with such third party, subject to certain exceptions and deductions. OPKO also retains an option to become the exclusive distributor of such products in Latin America, provided that OPKO exercises that option within a defined period following specified regulatory approvals in the United States. The Company is responsible for all preclinical, clinical, regulatory and other activities necessary to develop and commercialize rolapitant. There were no ongoing clinical trials for rolapitant at the time of its acquisition. As of the date of acquisition, none of the assets acquired had alternative future uses, nor had they reached a stage of technological feasibility. As no processes or activities that would constitute a “business” were acquired along with the license, the transaction was accounted for as an asset acquisition by recording the entire purchase price as acquired in-process research and development expense of $6.6 million. As of December 31, 2013, the Company has not made any additional milestone payments under this license agreement.

The license with OPKO will remain in force until the expiration of the royalty term in each country, unless OPKO has cause to terminate the license earlier for our material breach of the license or bankruptcy. We have a right to terminate the license at any time during the term for any reason on three months’ written notice to OPKO.

* OPKO 10-K Filed 3/3/2014 ( http://investor.opko.com/secfiling.cfm?filingID=944809-14-3&CIK=944809 )

NK-1 Program

In November 2009, we acquired rolapitant and other neurokinin-1 (“NK-1”) assets from Schering Plough Corporation. In December 2010, we exclusively out-licensed the development, manufacture and commercialization of our lead NK-1 candidate, rolapitant, to TESARO, Inc. (“TESARO”). Rolapitant, a potent and selective competitive antagonist of the NK-1 receptor, has successfully completed phase 2 clinical testing for prevention of chemotherapy induced nausea and vomiting, or CINV, and post-operative induced nausea and vomiting (“PONV”). In December 2013, TESARO announced successful achievement of the primary endpoint in each of two phase 3 trials of Rolapitant for prevention of chemotherapy-induced nausea and vomiting. Under the terms of the license, we are eligible to receive up-front and milestone payments of up to $121 million, double digit tiered royalties on sales of licensed product, as well as a share of future profits from the commercialization of licensed products in Japan, and an option to market the products in Latin America. In addition, we acquired an equity position in TESARO.

TESARO

In December 2010, we entered into a license agreement with TESARO, Inc. (“TESARO”) granting TESARO exclusive rights to the development, manufacture, commercialization and distribution of rolapitant and a related compound (the “TESARO License”). Under the terms of the TESARO License, we are eligible for payments of up to $121.0 million, including an up-front payment of $6.0 million, which has been received, and additional payments based upon achievement of specified regulatory and commercialization milestones. In addition, TESARO will pay us double digit tiered royalties on sales of licensed products. We will share future profits from the commercialization of licensed products in Japan with TESARO and we will have an option to market the products in Latin America. In connection with the TESARO License, we also acquired an equity position in TESARO. We recorded the equity position at $0.7 million, the estimated fair value based on a discounted cash flow model.

Neither we nor our related parties have the ability to significantly influence TESARO and as such, we accounted for our investment in TESARO under the cost method until June 2012 on which date, TESARO had an initial public offering. As a result of the initial public offering, we determined TESARO had a readily determinable fair value and we changed the accounting for our investment in TESARO from a cost method investment to an investment, available for sale. We record changes in the fair value as an unrealized gain or loss in Other comprehensive loss and determine the cost using the specific identification method. Refer to Note 18.

Edison Updates

* Edison Tesaro Rolapitant June 10 2014 Update ( http://opkodd.files.wordpress.com/2014/06/edison-tesaro-rolapitant-june-10-2014-update.pdf )
* Tesaro Tranformative deal for the long run March 26 2014 Update ( http://opkodd.files.wordpress.com/2014/03/tesaro-tranformative-deal-for-the-long-run.pdf )
* Building a cancer pipeline February 21 2014 Update ( http://opkodd.files.wordpress.com/2014/08/building-a-cancer-pipeline-february-21-2014.pdf )

CNBC

* Tesaro: Video Next big thing in biotech? Monday, 13 Jan 2014 ( http://video.cnbc.com/gallery/?video=3000235277 )
* Tesaro: Video Robyn Karnauskas Biotech buys right now Tuesday, 8 Jul 2014? ( http://video.cnbc.com/gallery/?video=3000290599 )

Biotech Beat Down (Robyn Karnauskas on CNBC Fast Money) ( http://video.cnbc.com/gallery/?video=3000290599 )

Robyn Karnauskas Deutsche Bank biotechnology director, shares her large and small cap pick Tesaro

TESARO (tsro) Small cap pick off the radar screen. Three reasons we like the stock.

Number 1#, they already have a drug that has good data, they are going to launch the drug next year, rare for Biotech.

Number 2#, they have new data on a drug for Ovarian Cancer, we think that drug will work. People think it’s a $200 Million Dollar Drug, we think it’s a $3 Billion Dollar Drug coming into next year.

Number 3#, Rare and SmallCap Biotech, really good management team that have been in other companies before and sold companies. We know they can execute.

Karnauskas also has a buy rating on Tesaro (TSRO_) with a $72 price target. She reasoned that the stock could climb 120% in the next 12 months based on strong management, solid drugs in its pipeline and being a possible takeout candidate.

Robyn Karnauskas,
Robyn Karnauskas returned to Deutsche Bank as Director in April 2010. She provides lead equity research coverage of the biotechnology sector in North America. Ms. Karnauskas’ return further demonstrates Deutsche Bank’s commitment to maintaining the firm’s solid track record in providing fundamental and thoughtful research in the biotech sector and throughout its broad health care platform. Ms. Karnauskas rejoins Deutsche Bank after a brief time at Morgan Stanley. Prior to that, she was Vice President and lead coverage Analyst on small and mid-cap biotech stocks at Deutsche Bank. She played an integral part in Deutsche Bank’s number one Institutional Investor-ranked biotech franchise and was named Institutional Investor’s “Up and Comer” Biotech Analyst in 2009. Ms. Karnauskas originally joined Deutsche Bank from Bear Stearns in 2008. She holds a Ph.D. in cancer biology from the University of Chicago and a B.S. in biology from the Massachusetts Institute of Technology.

Paradigm

Paradigm ( http://www.paradigmdx.org/about/ ) is a non-profit corporation established to bring cutting-edge diagnostics and biomarker driven clinical trials to benefit cancer patients.  Through Next-Gen Sequencing, and other biomarker analysis, Paradigm is able to provide information about the genomic and proteomic landscape of a patient’s cancer, as well as potential therapies based on the specific characterization of the patient’s tumor; thus, personalizing each patient’s course of treatment.  Paradigm’s analysis provides physicians and industry partners with more precise information about the specific cancer pathways in the patient and associations between the pathways and the specific drugs available that can impact the cancer to allow for more effective decision-making.  Paradigm provides custom analysis as well as a broad-spectrum analysis covering 114 genes with over 500 nucleotides of interest including Next-Gen Sequencing for DNA mutations, DNA copy number variation, DNA chromosomal inversions, deletions, translocations and mRNA expression. The analysis is driven by supporting data and literature and provides more choices for  the patient’s care than currently available on the market.

Molecular profiling ( http://www.mayoclinic.org/diseases-conditions/cancer/expert-blog/molecular-profiling/bgp-20056382 ) is a method of testing that looks at each person's cancer tumor and studies the genetic characteristics as well as any unique biomarkers. The information gathered is used to identify and create targeted therapies that are designed to work better for a specific cancer tumor profile.

At the ASCO 2013 Meeting, Brian Van Tine, M.D., Ph.D., from the Washington University School of Medicine discusses the latest news surrounding molecular profiling.

Paradigm Announces Molecular Profiling Collaboration with TESARO, Inc.

Collaboration will enhance clinical trials by identifying proteomic and other predictors of response to targeted cancer therapies. ( http://www.paradigmdx.org/paradigm-announces-molecular-profiling-collaboration-with-tesaro-inc/ )

Ann Arbor, MI and Phoenix AZ, August 20, 2014

Paradigm, a non-profit corporation established to bring cutting-edge next-generation sequencing and proteomic diagnostics and biomarker driven clinical trials to cancer patients, today announced a collaboration with TESARO, Inc. Paradigm will use its advanced molecular capabilities to characterize patient tissue samples from clinical trials to better predict which patients may be sensitive or resistant to TESARO’s TSR-011. This may lead to more successful clinical trial outcomes as well as enable Paradigm to develop and commercialize potential diagnostic products.

Robert J. Penny MD, PhD, CEO of Paradigm noted “Paradigm is utilizing decades of know how in successfully working with the pharmaceutical and diagnostic industry and merging those with our unique academic research abilities to craft personalized interrogations for clinical trial selection and provide accelerated translational treatment decisions in patient care.”