Perspective Therapeutics' CEO announced this week that two I noticed that I was getting paid the most at different industry gatherings.
The Richland, Wash.-based company has nearly quadrupled in value this year to $833 million, fueled by the radiopharmaceutical craze. It's no surprise that CEO Thijs Spoor received attention from investors attending the event, one of which praised the disruptive potential of nuclear medicine.
“There's been a lot of interest from institutional investors,” Spoor said in an interview.
Eli Lilly, Bristol-Myers Squibb and AstraZeneca have spent a combined nearly $8 billion over the past six months acquiring companies that develop radiopharmaceuticals like RayseBio. At least two deals had multiple bidders, according to regulatory filings.
These treatments have the potential to destroy tumors while leaving healthy cells relatively intact. Instead of delivering radiation from outside the body, drugs are injected directly to the tumor, minimizing damage to other tissues.
Morgan Stanley predicts the radiopharmaceutical market will grow from approximately $7 billion in 2022 to $39 billion by 2032.
One such drug is already on the shelves of pharmacies. His Pluvicto, developed by Novartis AG, is approved for certain types of prostate cancer and has been shown to help some patients live longer without worsening the disease. The treatment was first on the market last year with full-year sales of $980 million, and Novartis expects it to be a multi-billion dollar blockbuster.
Jefferies analyst Andrew Tsai said in an interview that the drugs are backed by “very meaningful” scientific data and there is scope for drugs other than Purvict to become standard of care.
Research is progressing rapidly, and RayzeBio is enrolling patients in advanced clinical trials for tumors that grow in the intestine or pancreas. Another drug being developed by privately held Radiomedics won breakthrough therapy designation from U.S. regulators in February.
rising tide
Lilly gained interest last October when it entered the field with a deal to buy Point Biopharma, which is developing an anti-tumor therapy for prostate cancer that competes with Pluvicto.
Since then, Clarity Pharmaceuticals, an Australian-based developer of next-generation therapeutic and imaging products, has soared 136%, with its flagship product Actinium Pharmaceuticals showing promise for older patients with leukemia. The company rose 58%. . Private companies such as Abdera Therapeutics, Mariana Oncology, and OncoInvent are also gaining traction.
Perspective Therapeutics is developing drugs that are expected to treat melanoma and other conditions. According to CEO Spur, the company has recently received an increase in inquiries from pharmaceutical companies. “A lot of them are saying we want to learn more and they're trying to move up the learning curve,” he said.
One of the challenges for the broader sector is production. Radioactive isotopes may need to be produced in nuclear reactors, and the number of donors is limited. Strict regulatory requirements for manufacturing further limit companies' options. And once the product is manufactured, it needs to reach patients within a few days.
That's why a key aspect of AstraZeneca's deal to acquire Fusion Pharmaceuticals was to gain access to Target's manufacturing and supply chain capabilities. Susan Galbraith, Astra's executive vice president of oncology research and development, said in an interview at the time of the deal that Fusion already has access to the radioactive metal actinium through contracts with major suppliers.
Jefferies' Tsai said access to manufacturing was key in all three recent deals. His first two also sparked bidding wars, highlighting the growing attractiveness of the radiopharmaceutical sector.
Many bidders
Lilly wasn't Point BioPharma's only candidate. Point's board believed six additional companies could be interested in bidding, according to regulatory filings. One submitted an offer to the point and eventually raised it before Lily's offer won.
Two months later, Bristol-Myers faced off against two bidders for RaysBio, each offering a premium of more than 40%. Bristol-Myers was successful with a final offer valued at more than twice the target price.
Some analysts caution that despite the hype, the size of the deal remains relatively small and the potential revenue from specific products is uncertain. For Astra & Fusion, “future returns, if any, may be a long way off,” said Susannah Streeter, head of money markets at Hargreaves Lansdown.
Meanwhile, Spoor expects the types of deals that will be completed to change.
“Some of the early acquisitions seem to be infrastructure-focused,” he said. In the future, companies with “novel mode of action assets protected by strong patents” may be targeted.
