Friday, November 18, 2011

Deals of the Week Takes a Backseat to Non-Deal Newsiness

Not quite a goose-egg
Deals, Schmeals. What about Geron's stem-cell about-face? Denner's departure from Icahn's shop? And how about an IPO that wasn't underwater? Don't even get us started on MLB re-alignment or seeing Papelbon in a Phillies uniform. The news this week came thick and fast; it just didn't come for the most part in the form of alliances and M&A.

It has definitely been a big week for financings: Clovis Oncology took the prize when it took the rest of its Series A to the public markets, raising $130 million to fund its ambitions in tough-to-treat cancers. Staying private (for now) was Agios Pharmaceuticals, which raised a whopping $78 million in Series C funds to move beyond cancer metabolism (courtesy its existing venture backers and corporate partner Celgene, but also some shiny new-but-unidentified crossover types). And we haven't even mentioned molecular diagnosticians Biocartis' $100 million venture round, but at this point we'd better move on before FOTF smacks us over the back of the head with a shelf financing.

It's also been a big week for regulatory action: today's unsurprising surprise announcement from FDA Commissioner Hamburg revoking Avastin's metastatic breast cancer approval will not draw an appeal from Genentech even as it draws supporters' ire. But a couple nifty approvals for some niftily named new orphan drugs (Incyte's Jakafi and Erwinaze from EUSA Pharma) should dampen the enthusiasm of FDA-bashers. And of course there was the news that FDA may soon have some new approval mechanisms at its disposal, Progressive Approval and Exceptional Approval, as detailed in this piece from Monday's "The Pink Sheet".

Deals of the Week will take a break next week -- don't worry, you'll get your Alice's Restaurant -- as we gear up for our fourth annual Deals of the Year competition. But of course we've got a few nuggets to tide you over until December. Take a gander at...

Sanofi Pasteur/Curevac: The option-deal signed Nov. 15 between the private German biotech CureVac and Sanofi's vaccine division provides some measure of validation for the former's RNA-vaccine technology. It also gives the French drug maker rights to certain infectious disease programs, with R&D partially underwritten by Uncle Sam. On the same day Sanofi and CureVac said they were teaming up, the two companies also announced a $33.1 million, four-year R&D collaboration with further partners In-Cell-Art, a French nanotech company, and the US Department of Defense's Defense Advanced Research Projects Agency (DARPA). Because it has an option on the programs that in essence are being funded by the four-way collaboration (mainly by DARPA), Sanofi gets to kick the tires on CureVac's platform before committing significant cash. Its option rights -- based on pre-agreed license terms around vaccine programs against 'between five and ten' pre-defined pathogens -- are linked to the fulfillment of certain criteria within the DARPA-funded validation program. Pulling the trigger could cost Sanofi up to 101.5 million per pathogen in upfront and milestone payments for global marketing rights. That figure jumps to 150.5 million in the case where a prophylactic and therapeutic vaccine are developed. -- Melanie Senior

Shire/Shionogi: Shire has landed a Japanese market partner for undisclosed elements of its flagship ADHD franchise. The company said Nov. 18 it would team up with Shionogi & Co. to co-develop and co-commercialize ADHD meds in Japan, in exchange for an up-front fee and sharing future costs, though specific terms weren't released. Deal-wise, Shionogi has been more active in ex-Japanese markets this year (acquisitions in China and the US, for example) than at home, where it said earlier this year it would open a new R&D center. Compatriots like Daiichi and Ono Pharmaceuticals, which in recent months has licensed in Japanese rights to products from BMS, Merck-Serono, Servier, and KAI, have been more actively seeking out assets to sell in Japan. Shionogi has some experience in ADHD through its 2008 acquisition of Sciele Pharma, which sells Methylin for the condition. Hey, is that a goose in the back seat of an old Beamer?-- Chris Morrison

Genzyme/CFF: Genzyme (a Sanofi company) and the Cystic Fibrosis Foundation said Nov. 16 they would together work to identify "corrector" compounds that could fix malfunctioning CFTR proteins in patients with the disease's most common mutation, Delta F508. The collaboration will benefit from Genzyme's and Sanofi's extensive compound libraries, the companies said in a statement, and build not only upon past collaborations between the biotech and the CFF but also Genzyme's ongoing efforts in CF R&D. The company holds an option for global rights rights in all territories outside the US and Canada -- in all indications (except Duchenne/Becker muscular dystrophy) to PTC Therapeutics' ataluren (formerly PTC124), including CF, where the compound is in Phase III. The development of ataluren, which is being developed for a variety of genetic disorders involving nonsense mutations, was also partially funded by CFF grants. -- C.M. [Ed Note: the original version of the post misstated the territories/indications for which Genzyme has an option on PTC's ataluren. We regret the error.]

Medicis/Graceway: Medicis is buying the U.S. and Canadian pharmaceutical assets of bankrupt Graceway Pharmaceuticals for $455 million, subject to approval by Graceway’s board of directors. Graceway was founded in 2006 by private equity firm GTRC Golder Rauner and Jefferson Gregory, a co-founder and former chairman of King Pharmaceuticals. It filed for bankruptcy in September 2011. Details about the bankruptcy and other aspects of Graceway’s business are sketchy but the deal gives Medicis, a specialty pharma with projected 2011 sales of more than $730 million, a commercial portfolio with six key drugs with combined revenues of more than $125 million. The Graceway products complement Medicis’ focus on dermatology and aesthetics; they include Aldara (imiquimod) cream for basal cell carcinoma, Atopiclair for dermatoses, Maxair Autohaler (pirbuterol acetate inhalation aerosol) for bronchospasm, and Estrasorb (estradiol topical emulsion) for menopause. The deal also gives Medicis a small R&D program, including an undisclosed Phase II dermatology compound and a women’s health compound in Phase II. At the time it formed Graceway, GTRC said it would put up to $200 million into the company. Later, Graceway acquired the branded pharmaceutical business of 3M for $875 million, and rolled in with it another GTRC portfolio company focused on dermatology drugs, Chester Valley Pharmaceuticals. GTRC had formed that company in 2004 with an investment of $75 million. -- Wendy Diller

image by flickr user smohundro used under creative commons license.

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