Five Prime Therapeutics, Inc. (FPRX) surged 31.4% after the company announced that it has entered into an agreement with Bristol-Myers Squibb Company (BMY). Overall, the stock has gained 28.6% to date. The companies have entered into an exclusive collaboration to evaluate the safety, tolerability and preliminary efficacy of Bristol-Myers’ Opdivo, an investigational PD-1 (programmed death-1) immune checkpoint inhibitor, in combination with Five Prime’s FPA008, a colony stimulating factor-1 receptor (CSF1R) inhibitor.
The Opdivo and FPA008 combination will be evaluated in a phase Ia/Ib study for several cancer indications including non-small cell lung cancer (NSCLC), melanoma, head and neck cancer, pancreatic cancer, colorectal cancer and malignant glioma.
As per the terms of the agreement, Bristol-Myers will make a one-time payment of $30 million to Five Prime. Bristol-Myers will bear all study costs while Five Prime will conduct the study. The study is expected to start next year. If Five Prime looks for a partner for FPA008, Bristol-Myers will have a time-limited right of first refusal subject to certain conditions.
FPA008 is being developed for the treatment for rheumatoid arthritis (phase I study ongoing) and solid tumors. Opdivo is approved in Japan for treating patients with unresectable melanoma. Ono Pharmaceutical has the rights to commercialize the treatment in Japan as per an agreement with Bristol-Myers.
Opdivo is already under review in the U.S. and EU for previously treated advanced melanoma. A response from the FDA is expected by Mar 30, 2015. In the EU, the marketing application has been granted accelerated assessment status by the European Medicines Agency’s Committee for Medicinal Products for Human Use.
Opdivo is also under review in the EU for NSCLC. In the U.S., the company initiated a rolling submission for the NSCLC indication. Bristol-Myers expects to complete the rolling submission by the end of this year.
Both Bristol-Myers and Five Prime carry a Zacks Rank #3 (Hold). Some well-ranked stocks in the health care sector include AMAG Pharmaceuticals, Inc. (AMAG) and Actavis (ACT). While AMAG Pharma carries a Zacks Rank #1 (Strong Buy), Actavis carries a Zacks Rank #2 (Buy).
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