Opko Health Inc (OPK)

[tomsylver]

ESMO 2014 Congress, opko health, Rolapitant, tesaro

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ESMO is Europe’s leading medical oncology society, providing a professional network for its members and working with national societies across Europe and around the world.

Madrid, Spain - 26 Sep - 30 Sep 2014

The theme for ESMO 2014 is ‘Precision Medicine in Cancer Care.’ Whether you are a medical or surgical oncologist or a radiation oncologist, immunologist or pathologist, practicing precision medicine means we are all working towards a common goal – improved patient outcomes. This is the ultimate goal of ESMO 2014.

Attendees can expect detailed exploration of the practical, political, and financial issues that stand between our ideals and the reality of implementing optimal care for every person suffering from cancer.

ESMO 2014 Congress ( http://www.esmo.org/Conferences/ESMO-2014-Congress?hit=ehp )

IFEMA – Feria de Madrid, Madrid, Spain, 26-30 September 2014
Press briefing 1
Saturday, 27 September 2014, 8:15-9:00 (CEST)

47LBA
Phase 3 (P04832) trial results for rolapitant, a novel NK-1 receptor antagonist, in the prevention of chemotherapy-induced nausea and vomiting (CINV) in subjects receiving cisplatin-based chemotherapy.

(Martin R. Chasen, Elizabeth Bruyere HospitalDivision Of Palliative Care, Canada)

* ESMO-2014-Daily-Press-Briefing-Schedule-Saturday ( http://opkodd.files.wordpress.com/2014/09/esmo-2014-daily-press-briefing-schedule-saturday.pdf )

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Uncle’s DD Note#

CINV

Rolapitant

Rolapitant is potentially a best-in-class supportive care product for Chemotherapy-induced nausea and vomiting (CINV). Characteristics include:

* Single dose
* Rapid onset
* Long-acting (5 day activity as opposed to 1 or 2 days for other treatments)

Acquisition of Rolapitant

* In October 2009, OPKO acquired Rolapitant, a potent and selective competitive antagonist of the NK-1 receptor, in addition to other neurokinin-1 (NK-1) assets from Schering Plough Corporation.
* In December 2010, OPKO exclusively out-licensed the development, manufacture, and commercialization of Rolapitant to biopharmaceutical company TESARO, Inc.

Clinical Development

Rolapitant has completed Phase 3 clinical development for CINV. Two phase 3 trials of rolapitant that together enrolled a total of 1,070 patients receiving highly emetogenic chemotherapy (HEC) and met the primary endpoint of a higher rate of complete response in the delayed phase. The results indicated that protection from CINV was maintained over the full five day at-risk period in both trials. One additional phase 3 trial of rolapitant that enrolled 1,369 patients receiving moderately emetogenic chemotherapy (MEC) successfully achieved the primary endpoint of higher rate of complete response in the delayed phase. a New Drug Application (NDA) is on track for mid-2014.

License Agreement with TESARO

* Under terms of the license with TESARO, OPKO is eligible to receive up-front and milestone payments of up to $121 million.
* OPKO is also entitled to double-digit tiered royalties on sales of the licensed product, a share of future profits from product commercialization in Japan, and an option to market the product in Latin America. ( http://investor.opko.com/releasedetail.cfm?ReleaseID=536635 )
* OPKO has also acquired an equity position in TESARO.

Market Opportunity

* U.S. market opportunity of approximately $1.25 billion
* 6.6 million annual CINV patient treatments in 2011
* NCCN and ASCO guideline recommendations could lead to 70% penetration by the NK-1 class
* Merck-EMEND® (Aprepitant) is currently the only NK-1 receptor antagonist on the market Strong IP portfolio with U.S. exclusivity expected through 2028

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.