Rova-T: the story of AbbVie’s multi-billion dollar failure
Richard Staines discusses what has become one of the worst deals in pharma’s history – AbbVie’s purchase of Stemcentrx and its lung cancer drug Rova-T.
Rova-T was supposed to be the cancer drug that would bolster AbbVie’s revenues as revenues from the $20bn a year Humira (adalimumab) begin to dry up thanks to cheaper competitors.
Bought into the fold through the $5.8 billion acquisition of Stemcentrx in 2016, Rova-T – short for rovalpituzumab tesirine – had a great name and some tasty looking results from an early-to-mid stage trial in previously treated patients with small cell lung cancer (SCLC).
The data had already caused a stir ahead of that year’s American Society for Clinical Oncology (ASCO), and hungry for shiny-looking drug candidates to stuff its pipeline, AbbVie’s CEO Richard Gonzalez took a huge bet that Rova-T would be the next big thing in oncology.
Rova-T had a convincing-looking mechanism of action, consisting of an antibody that locks onto the DLL3 expressed on the surface of cancer cells, and a tesirine poison payload that would act on cancer cells but would in theory leave healthy tissue untouched.
It’s not hard to imagine AbbVie’s management team presented with PowerPoint decks showing overall response rates of 44% in patients with high expression of the protein DLL3, perhaps with the usual pictures of shrinking tumours in a rat from the preclinical development phase.
Perhaps shortly after this came the sales forecasts, which at the time were in the region of $5 billion per year at peak.
It wasn’t a Humira, but AbbVie was realistic enough to accept that it was unlikely to find another cash cow like the inflammatory diseases monolith, the gift that kept on giving after the company span out from Abbott in 2013.
Instead the strategy was to put together a new crop of blockbusters that together would offset the revenues lost as Humira succumbed to biosimilar competition, and leave the company with a more manageable patent cliff once the inflammatory diseases drug lost exclusivity later in the century.
Perhaps driven by a fear of missing out on the next cancer blockbuster, and the hype surrounding it, Gonzalez’s team swooped and snapped up Silicon Valley-based Stemcentrx in a deal worth around $10 billion.
Paying a hefty $5.8 billion up front, plus around $4 billion in “biobucks” milestone payments on attainment of development targets, the scale suggested that AbbVie’s management team were completely convinced of the drug’s potential.
There were other potential drugs in Stemcentrx’s pipeline – but it was clear from the outset that they thought Rova-T would be the star of the show.
The size of the deal served only to increase the hype around Rova-T, with Stemcentrx’s management team led by CEO and founder Brian Slingerland becoming biotech superstars.
There was also a further dash of glamour thanks also to backing from the Silicon Valley entrepreneur Peter Thiel, who would one point was rumoured to be president Trump’s choice to run the FDA.
Which made it all the more disappointing when the deal began to unravel around two years after the acquisition.
Cancer drugs are often approved by the FDA on the basis of mid-stage results, but Rova-T surprisingly and disappointingly fell short of the mark in phase 2 results announced in March 2018.
The TRINITY trial showed a lacklustre overall response rate of only 16% in third line SCLC, even though patients had a high expression of DLL3.
AbbVie said then that it would not seek accelerated approval based on those results, holding out for something more encouraging from the MERU and TAHOE trials in first and second line SCLC respectively.
But things kept going south in December 2018 when the Rova-T failed to improve overall survival compared with standard chemotherapy in the TAHOE trial in second line disease.
The data even showed shorter OS in the Rova-T arm, leading some to suggest that there could be an issue with the cytotoxic element of the drug, tesirine.
Assuming the worst, AbbVie took an impairment charge a few weeks later of $4 billion as doubts also spread about the other drugs that came in with Rova-T that also used the same cytotoxic agent.
The nail in the coffin came late last week with MERU trial in first line maintenance use in SCLC, after it showed no benefit compared with placebo following a planned interim analysis.
At the same time AbbVie announced that it would finally cut its losses and end development of Rova-T and focus on other pipeline assets instead.
The full post-mortem will come at a forthcoming medical meeting when AbbVie announces full details of the results.
But there are some obvious conclusions that can be drawn from the information we already have.
Despite the trend towards trying to approve on mid-stage data, it’s still very easy to get carried away on early data.
AbbVie will no doubt have done some homework when it decided to gamble so much money on a drug in early stage development, and the phase 1 data certainly looked compelling.
Phase 1 data should always be treated as exploratory, even in these days when there is so much talk about “de risking” in clinical trials.
There’s always an element of luck involved in drug R&D, and even without the benefit of hindsight, AbbVie’s move to buy Stemcentrx outright looked bold at best.
In many cases big pharma companies like to hedge their bets, perhaps with deals that pay out on attainment of certain development milestones.
AbbVie did do this, with Stemcentrx shareholders eligible for up to $4 billion in milestone payments, but the sum paid up front was eye-watering.
Option deals are also common, and are another good way to ensure a return on investment by freezing out competitors while also ensuring that the purchasing company’s interests are protected.
AbbVie’s management team will likely be wishing they had taken this approach during the talks with Stemcentrx’s management team.
Perhaps Stemcentrx’s CEO Slingerland pushed for a buyout, feeling he had a strong hand with the cash-rich big pharma looking to buy its way out of trouble once Humira’s patent expired.
Or maybe Gonzalez and his team were willing to take the risk after their $21 billion acquisition of Pharmacyclics, which gave AbbVie a 50% share in revenues from the blood cancer drug Imbruvica (ibrutinib).
That looked like a better deal despite the high price tag as revenues are strong – but it still meant sharing profits with an arch-rival.
We’ll never know for sure but from the outside it looks as if this desire for exclusivity, and the conviction that Rova-T was going to transform lung cancer, was what drove AbbVie to disaster.
This has gone down as one of the worst deals in pharma’s history – but luckily for AbbVie, the vast amounts of cash available from Humira means it has been able to build a pipeline of drugs that could go on to be blockbusters.
One of these, Rinvoq (upadicitinib), was approved in rheumatoid arthritis last month, and could generate revenues in excess of $2 billion in five years’ time according to some forecasts.
AbbVie will be hoping for more news like this ahead of 2023, when biosimilars finally begin to bite into Humira in the US.
The company said it will now focus on its other pipeline drugs, hoping that by that time, Rova-T will be another forgotten case of a pharma company’s fear of missing out.