Friday, January 22, 2010

DotW: Extraordinary Measures

The biopharma industry got glamorous this week with the debut of Extraordinary Measures, a ripped-from-the-headlines biopic based on John Crowley, now CEO of Amicus Therapeutics, and his attempts to develop a life-saving medicine for his two children suffering from the rare, inheritable enzyme deficiency called Pompe disease. New York Times film critic A.O. Scott didn't pan the flick, noting it rises above some of its made-for-TV trappings. (He wasn't quite so kind for the other science-focused pic of the week, Creation, about the life and times of Charles Darwin.)

Genzyme, which developed a FAQ sheet related to its ties to Extraordinary Measures and its "Special Medicine," got a little sliver of spotlight, and not the kind that comes with PDUFA dates, Form-483s, and its aging Allston Landing manufacturing plant. Also basking a bit were the biotech execs who mingled with celebs at the film's January 21 red carpet premiere, according to back-and-forth reports from some of our favorite Twitterati.

Speaking of extraordinary measures, Alcon's minority shareholders seem ready to go the distance, even in a protracted legal battle, to wrest a better deal from Novartis. We're certain Merck and Inspire Pharmaceuticals both suffered extraordinary disappointment after the Phase III failures of their respective HIV and dry eye disease drugs. Meanwhile, Pfizer and Teva are rumored to be duking it out for ownership of RatioPharm.

Most extraordinary of all, though, was the crash-and-burn of health care reform. In an amazing turnabout, Democratic hopeful Martha Coakley lost the race for the late Ted Kennedy's Massachusetts Senate seat to Republican Scott Brown. The result: as our own Mike McCaughan notes, in a surreal twist that proves truth really is stranger than fiction, the unthinkable status quo -- leaving our health care system as-is -- suddenly became a very possible reality.

As we ponder who gets to play the movie versions of Brown (how about this guy from The Wire?) and Coakley (Susan Sarandon?), it's time to wrap up the news in another edition of...

Ipsen/Inspiration Biopharmaceuticals: Ipsen's decision to align itself with hemophilia player Inspiration Biopharmaceuticals was an interesting--if not also inspired--choice. It's the latest twist in the big sibling/little sibling concept dealmaking, only here we see concretely the value to the bigger party. Ipsen has agreed to pay $85 million for a 20% stake in Inspiration and gets an option tied to development milestones to acquire another 47% for $174 million. In exchange, Ipsen receives $50 million in convertible notes and offloads development of OBI-1, a recombinant porcine factor VIII compound currently in late Phase II trials that the French pharma in-licensed from long-term partner Octagon in 2008. (Ipsen also gets a 27.5% share of future OBI-1 sales--if it doesn't swallow up Inspiration first.) Ipsen is deviating from the strategy its management professed in 2008, where unlocking OBI-1's full value was clearly tied to the French group's "direct commercialization" of the medicine. Now Ipsen seems to think that marketing of OBI-1 is best left to a company with in-house hemophilia expertise and a portfolio of products. Many from Inspire's management team hail from Baxter, and the biotech has three other hemophilia programs built on recombinant protein manufacturing technology. But Ipsen's decision also parallels a tack it took in 2006 when it scooped up a partial stake in Tercica as part of a plan to become a global endocrinology player. Two years later Ipsen bought out its partner for an additional $400 million to deepen its footprint in the U.S. and Canada. One other interesting twist to the deal: project financier Celtic Pharma also won big in the process, garnering its first exit. Recall Celtic had an equity stake in Inspiration and a direct interest in that firm's lead compound, IB1001, a novel recombinant Factor IX drug. -- Carlene Olsen and EFL

Novartis/GenVec: Novartis's small deal with gene therapy developer GenVec in the hearing loss space is another example of its desire to diversify into areas of unmet medical need, says "The Pink Sheet" DAILY. The Swiss drugmaker pays a modest $5 million up-front and buys $2 million in GenVec common stock for the biotech's preclinical, gene-based "atonal therapy" program, which is designed to restore hearing loss and balance function by stimulating the regeneration of sensory hair cells in the ear. In addition to the up-front and the validation of a deal, GenVec stands to gain $214 million in milestone and royalty payments if products are commercialized. Novartis also picks up full development control--and cost--of the gene therapy program, and will manage the collaboration via its New Indications Discovery Unit, a group charged with exploring opportunities in diseases outside the drugmaker's current R&D strategy. Drugs aimed at stopping or reversing hearing loss certainly fit that description. Devices currently dominate the hearing loss/balance market and IN VIVO Blog is aware of only a few other companies attempting to play in this space: Quark Biotech, Auris Medical, and Otonomy. On a much smaller scale, one might see Novartis' move as reminiscent of its decision to take over specialty ophthalmic player Alcon, especially if Novartis follows its toe-dipping GenVec deal by taking a more significant stake in another player with consumer or device offerings. -- Emily Hayes

Alcon/Sirion Therapeutics: While Alcon's minority shareholders gear up for the Novartis fight, the specialty eye company is trying to show that it's business as usual, at least when it comes to alliances. This week Alcon purchased U.S. rights for two FDA-approved topical eye-care products, the corticosteroid Durezol and the antiviral Zirgan. In addition, Alcon purchased global rights, excluding Latin America, for Zyclorin, a Phase III 0.1% cyclosporine solution for dry eye and other ocular surface disease. Terms of the transaction were undisclosed. The news emphasizes again the premier position Alcon--and now Novartis thanks to its at least 77% ownership stake in the company--plays in ophthalmology. Alcon has been among the most active deal makers in the ophtho space in recent months, despite claims from big drug makers that this specialist market is of primary interest. Among Alcon's notable deals: its take-out of device marker Optonol, its earn-out heavy purchase of EsbaTech, and its licensing/option-to-buy agreement with Potentia Pharmaceuticals. The Sirion deal adds to Alcon's bucket of late stage/marketed assets, while shifting the VC-backed biotech's focus to its much earlier stage clinical assets, especially the Phase II fenretinide, an oral vitamin A-binding protein antagonist being developed to treat the dry form of age-related macular degeneration. For more on Sirion, which raised $27.7 million from a syndicate of 17 investors in October 2009, check out this story from the July '09 issue of START-UP.--EFL

Axxam/Juvenile Diabetes Research Foundation/National Multiple Sclerosis Society: It seems to be the first collaboration of its kind. Two nonprofits--the JDRF and the National MS Society's venture philanthropy group Fast Forward--have teamed up with the Bayer spin-out Axxam of Milan, Italy, to hunt for drugs targeting a specific ion channel, Kv1.3, whose misregulation in certain immune cells has been implicated in both diabetes and multiple sclerosis. Financial terms of the agreement weren't disclosed, but Fast Forward's president Timothy Coetzee told "The Pink Sheet" DAILY that the two patient advocacy groups will invest equally in the project, with Axxam also kicking in funding. Under the agreement, Axxam will use its high-throughput screening technology to analyze its chemical library in search of compounds that modulate Kv1.3 ion channels in T cells. Apparently Axxam first reached out to JDRF and proposed the two groups review the Italian firm's compound library for diabetes candidates. JDRF then took the proposal to Fast Forward and suggested pooling resources since the work would be around a target implicated in both diseases. -- Joseph Haas

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