By Jonathon Fendelman, Senior Practice Executive, Campbell Alliance
The Celgene/Quanticel tie-up announced November 4, typifies a trend we’ll be discussing in greater detail at the coming Therapeutic Area Partnerships meeting: the trend of partnering early in oncology. Under the terms of the agreement, Celgene will commit $45 million to Quanticel during the initial three-and-a-half-year alliance term, with the ability to extend the collaboration in exchange for additional funding. Celgene will also take an equity stake in Quanticel and retains an exclusive option to acquire the company.
As IN VIVO Blog outlined in this post, Quanticel will utilize its platform to conduct single-cell genomic analysis of patient tumor samples and to identify predictive biomarkers for Celgene’s investigational drugs. Quanticel will also perform its own drug discovery, and via the acquisition option, Celgene retains the ability to access those pipeline candidates.
The upshot? As competition for good assets strengthens, pharmas are beginning to lock up rights to assets long before proof-of-concept data are in hand. To put some numbers on the trend, Campbell Alliance used Elsevier’s magic eight ball – also know as Strategic Transactions-- to identify the total number of alliances year-to-year with upfront payments of more than $10 million. We were only interested in deals centered on assets (as opposed to those centered around the resolution of patent disputes or R&D support, for example).
What does this have to do with oncology deal making? In 2008 and 2009, 24% of the alliances were for oncology products. 2010 saw a slight downward blip, with only eight of the 62 deals, or 13%, in this therapeutic area. But oncology deals appear to have bounced back in 2011, with 28% of the 42 deals year-to-date involving cancer medicines.
We see a clear enthusiasm for early-stage oncology deals. In the context of this enthusiasm, we anticipate any new oncology deals will also center on early-stage products, particularly compounds that work by a novel mechanism of action. Such assets offer the differentiation payers are more likely to reimburse for upon approval.