Portfolio Manager Thomas Vandeventer of Tocqueville Asset Management says TESARO Inc (NASDAQ:TSRO) has been a very successful name this year, largely due to the company’s PARP inhibitor drug.
It really woke up in April this year, even after the big correction in health care stocks in the first quarter, when the Janssen pharma division of Johnson & Johnson (NYSE:JNJ) inked a deal with TESARO in which they invested $35 million in the company’s PARP platform. Janssen also agreed to an additional $415 million in milestone payments. And they bought $50 million of stock when the agreement was announced at $44.50.
Now today, TESARO just issued an additional 1.75 million shares in the public market at $135 a share. So just on the initial investment that Johnson & Johnson made, they’ve actually tripled their money at today’s secondary offering price.
Vandeventer adds:
PARP inhibitors are the newest best thing in the chain of innovation in oncology. PARP is a family of proteins, which perform very important functions in the cell, and probably the most important is what we call DNA repair. The PARP protein plays an important role in what is called single-strand repair. PARPs show activity in monotherapy versus tumors with existing DNA repair defects.
You may have heard of BRCA1 and BRCA2 mutations. PARP proteins enable a mutation, a mutated cell or gene, to repair itself to continue to generate more mutations, thus tumor growth is enabled. So PARP inhibition is a very interesting area that’s being studied in solid tumors.
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