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LONDON, UK / ACCESSWIRE / November 16, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Loxo Oncology, Inc. (NASDAQ: LOXO), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=LOXO. The Company announced on November 14, 2017, that it has entered into a license, development, and commercialization agreement with Bayer Consumer Care AG wherein both the Companies will develop and commercialize Larotrectinib and LOXO-195 for the treatment of patients with TRK fusion cancers. For immediate access to our complimentary reports, including today's coverage, register for free now at:

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Both these compounds are being evaluated for the treatment of patients with cancers harboring TRK gene fusions, which are genetic alterations across a range of tumors resulting in uncontrolled TRK signaling and tumor growth. This deal could bring a total of $1.55 billion to Loxo Oncology.

How TRK Fusions Are Related to Cancer?

  • TRK fusions are basically chromosomal abnormalities that occur when one of the NTRK genes (NTRK1, NTRK2, NTRK3) becomes abnormally connected to another, unrelated gene (such as ETV6, LMNA, TPM3). The abnormality leads to uncontrolled TRK signaling, which subsequently leads to cancer.

  • Mostly TRK fusions occur in various adult and pediatric solid tumors, such as appendiceal cancer, breast cancer, cholangiocarcinoma, colorectal cancer, GIST, infantile fibrosarcoma, lung cancer, mammary analogue secretory carcinoma of the salivary gland, melanoma, pancreatic cancer, thyroid cancer, and various sarcomas.

  • TRK fusions can be diagnosed through tests such as targeted next-generation sequencing (NGS), immunohistochemistry (IHC), polymerase chain reaction (PCR), and fluorescent in situ hybridization (FISH).

About Larotrectinib (i.e. LOXO-101)

  • Larotrectinib is an oral investigational new drug for the treatment of patients with cancers that harbor abnormalities related to tropomyosin receptor kinases (TRKs).

  • An analysis of 55 RECIST-evaluable TRK fusion adult and pediatric patients was conducted wherein Larotrectinib exhibited a 75% independently-reviewed confirmed overall response rate (ORR) and an 80% investigator-assessed confirmed ORR, across different types of solid tumors.

  • The US FDA has already granted the Breakthrough Therapy Designation, Rare Pediatric Disease Designation, and Orphan Drug Designation to Larotrectinib.

  • The first filing for Larotrectinib in the US has been planned for late 2017 or early 2018, while the EU filing is expected in 2018.

About LOXO-195

  • LOXO-195 is an oral investigational new drug for the treatment of patients with cancers, who have acquired resistance to initial TRK therapy such as Larotrectinib.

  • Although drugs like Larotrectinib can cause durable responses in patients, there is always a chance for the cancer to grow again. This is referred as ?acquired resistance' wherein that cancer gets resistance to the actual therapy that was once effective.

  • This acquired resistance could be due to TRK kinase point mutations, such as those in the solvent front domain, xDFG domain, or gatekeeper region.

  • LOXO-195 has been specifically designed to address these new point mutations and thus induce a new response in the patient's cancer.

Financial Consideration

  • As per the agreement, Loxo Oncology will receive an upfront payment of $400 million.

  • In addition to that, Loxo Oncology would receive a total of $450 million in milestone payments upon Larotrectinib regulatory approvals and events of first commercial sale in major markets.

  • Besides, it would also receive an additional amount of $200 million in milestone payments upon LOXO-195 regulatory approvals and events of first commercial sale in major markets.

Terms and Conditions of the Agreement

  • According to the terms of the agreement, Loxo Oncology will lead global development activities and US regulatory activities.

  • On the other hand, Bayer will lead ex-US regulatory activities, and worldwide commercial activities.

  • On the global level, Loxo Oncology and Bayer will share development costs on a 50/50 basis. Also, both the parties will share the commercial costs and profits on a 50/50 basis in the US, where they co-promote the products.

  • Bayer has agreed to pay Loxo Oncology a sum of $25 million on achieving the milestone of a certain sales threshold in the US.

  • However, Bayer will commercialize the product outside of the US. Also, Bayer will book revenues worldwide. It will pay Loxo Oncology tiered, double-digit royalties on net sales, and sales milestones totaling $475 million.

Loxo Oncology to Get Greater Market Access

Jacob Van Naarden, Chief Business Officer of Loxo Oncology, stated that this transaction signifies a transformational collaboration for Loxo Oncology as it prepares for commercialization.

He shared that Bayer has experience of successful co-promotion with emerging biopharmaceutical Companies. Thus, he is confident that Bayer's oncology team has the global reach and expertise to compliment Loxo Oncology's existing commercial plans. He believes this collaboration would help in introducing the TRK inhibitors to more patients more quickly and efficiently.

Bayer Acknowledges the Scope of Larotrectinib and LOXO-195

Likewise, Robert LaCaze, Executive Vice President and head of the Oncology Strategic Business Unit at Bayer, acknowledged the potential of Larotrectinib and the follow-on compound LOXO-195. He believes that these agents have potential to fulfill the promise of precision medicine, where tumor genetics rather than tumor site of origin determine the treatment approach for patients.

Last Close Stock Review

At the closing bell, on Wednesday, November 15, 2017, Loxo Oncology's stock declined 4.76%, ending the trading session at $76.04. A total volume of 1.08 million shares have exchanged hands, which was higher than the 3-month average volume of 440.54 thousand shares. The Company's stock price skyrocketed 6.35% in the last three months, 68.19% in the past six months, and 161.40% in the previous twelve months. Moreover, the stock soared 136.77% since the start of the year. The stock currently has a market cap of $2.25 billion.

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