Puma Biotech Expands Neratinib Agreement With Pfizer

Development stage biopharmaceutical company Puma Biotech announced that it has expanded its licensing agreement for the investigational drug neratinib with its partner Pfizer.

Neratinib is under development by Puma for the treatment of patients with HER2-positive breast cancer and those with non-small cell lung cancer (NSCLC). The drug is also being investigated in breast cancer and other solid tumors with a HER2 mutation. In fact, earlier this week the company released results from its Phase 3 clinical trial that showed the drug blocked the return of breast cancer in some women. Neratinib also improved disease-free survival by 33 percent vs. placebo.

Several clinical trials initiated by Pfizer were in progress at the time Puma licensed neratinib from the company. The partners’ original license agreement limited the amount of external expenses Puma would incur in completing these trials, which have been since transferred to Puma. This limit was reached in the last quarter of 2012. The original agreement also stipulated that Pfizer will shoulder costs for the trials above the predetermined limit for Puma until the studies were completed.

The new agreement now allows Puma to be solely responsible for all costs of the clinical trials, approximated at $30 million. The company said it expects a significant percentage of the costs will take place this year and gradually taper off as the trials progress towards their completion.

Puma CEO and President Alan H. Auerbach said, “We are pleased to enter into this amendment to the licensing agreement for neratinib. By assuming responsibility for the expenses associated with the ongoing legacy clinical trials, and by fixing the royalty rate for the drug at a reduced rate, we believe that we have significantly improved the potential value of the drug.”

The original agreement dictates that Puma is obliged to pay Pfizer incremental annual royalties pegged at between 10 to 20 percent of sales upon the commercialization of neratinib. With the amendment, the company will pay Pfizer annual royalties on net neratinib sales at a fixed rate in the low to mid-teens.

The company’s shares took off and tripled this week after the positive results of its Phase 3 trial of the investigational drug in breast cancer were posted.