Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Inovio's Game-Changing 2013

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Roche (NASDAQOTH: RHHBY  )  paid Inovio (NASDAQ: INO  ) a small $10 million payment in September and promised up to another $412 million in milestones to lock up Inovio's promising INO-5150 and INO-1800 pre-clinical drugs. Those drugs have put up intriguing results in animal studies and the deal paves the way for human trials in 2014. 

Seeking and destroying cancer cells
In pre-clinical studies, monkeys treated with Inovio's 5150 saw prostate antigen response, suggesting an opportunity to treat prostate cancer. And INO-1800 eliminated liver cells in mice, suggesting it may offer hope as a treatment for hepatitis B and liver cancer. Roche thinks those results are promising enough to speculate the drugs may increase the efficacy of other drugs in Roche's cancer pipeline.

To foster that effort, Roche is taking over development of the two drugs from Inovio, including the costs associated with bringing them into human trials.

The move reflects the high hopes held by Roche, and competitors Merck (NYSE: MRK  ) and Bristol-Myers Squibb (NYSE: BMY  )  that immunotherapy treatments targeting PD-1 and PD-L1 receptors can help T-cells in our immune system better identify and destroy invading cancer cells. 

Lining up for immunotherapies
The Inovio deal isn't the first immunotherapy partnership struck by Roche. The company announced in June that it's linking up with Immunocore, another pre-clinical player.  In the Immunocore deal, Roche agreed to pay up to $300 million or more if Immunocore's compounds are successful.

That prompted GlaxoSmithKline  (NYSE: GSK  ) to sign a licensing pact with Immunocore in July, agreeing to pay Immunocore $212 million if it can hit pre-clinical milestones. Glaxo offered another $300 million in milestone payments, as well as royalties, if compounds covered by the deal ever make it to market.

Cozying up with Inovio isn't surprising
The need to protect Roche's market leading cancer franchise gives Roche a vested interest in ushering along promising pre-clinical oncology drugs from Inovio and Immunocore. Roche's blockbuster cancer drugs Herceptin and Avastin -- acquired in its 2009 purchase of Genentech -- accounted for a third of Roche's global revenue last year.

That oncology leadership position is being challenged by promising PD-1 drugs in mid-stage trials at Merck and Bristol-Myers.

Merck hopes its MK-3475 can offset faltering sales tied to patent expiration of its multi-billion drug Singulair. Merck is studying MK-3475 in eight programs targeting a range of cancer, including advanced melanoma. MK-3475's success in a phase 1b trial for that indication prompted the FDA to grant MK-3475 breakthrough status earlier this year, which may accelerate the drug's march through additional trials.

Meanwhile, Bristol has 25 studies under way for its drug nivolumab, including a promising phase 3 trial combining the drug with its potential blockbuster drug Yervoy in advanced melanoma. Updated results from an earlier phase 1 study showed 53% of patients treated with the combination cocktail responded.

Capturing the big opportunity
Excitement over Inovio and immunotherapy is big enough for analysts to consider the approach the next big breakthrough in battling cancer. Citigroup analyst Andrew Baum estimates that immunotherapy cancer drugs could generate $35 billion in sales within a decade, according to a report in May.

For that reason investors will want to keep a close eye on Inovio in 2014. The Roche deal frees up Inovio's balance sheet to develop its cervical cancer vaccine VGX-3100, which has shown promise in phase 1 trials and is currently in phase 2. And the partnership gives Inovio access to the global leader in oncology, which could be very valuable in accelerating drugs into trials next year.

Another top stock idea
There's a huge difference between a good stock, and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Read/Post Comments (0) | Recommend This Article (11)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2762927, ~/Articles/ArticleHandler.aspx, 10/1/2016 8:31:02 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 11 hours ago Sponsored by:
DOW 18,308.15 164.70 0.91%
S&P 500 2,168.27 17.14 0.80%
NASD 5,312.00 42.85 0.81%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/30/2016 4:05 PM
BMY $53.92 Up +0.05 +0.09%
Bristol-Myers Squi… CAPS Rating: ****
GSK $43.13 Up +0.23 +0.54%
GlaxoSmithKline CAPS Rating: ***
INO $9.32 Up +0.06 +0.65%
Inovio Pharmaceuti… CAPS Rating: **
MRK $62.41 Up +0.50 +0.81%
Merck and Co. CAPS Rating: ****
RHHBY $30.97 Down -0.04 -0.13%
Roche Holding Ltd.… CAPS Rating: *****