Friday, December 09, 2011

Deals of the Week Ponders 13 Ways Of Looking At A Mockingbird

Like mockingbirds, biosimilars are emerging as some of the pharma industry's best mimics, but are different indeed from their patented predecessors -- and the business models they're evoking differ from those of traditional generics. Biologic copies of compounds losing patent exclusivity are poised to become big business. But, as IN VIVO's Melanie Senior noted in this November feature story, for a biosimilar to garner market share, its owners still need not only to provide compelling evidence of bioequivalence, but also to innovate in pricing, market, positioning, production and support. That's potentially making the biosimilar a bird of a different feather altogether.

As this week's dealmaking news whirled in the autumn winds, Biogen Idec became the latest pharma to forge an agreement around biosimilars, in this case with Korea's Samsung. This week's Pink Sheet explores the deal, which creates a Korea-based joint venture with $300 million in commitments from its parent companies. Just $45 million, or 15%, will come from Biogen, while Samsung will hold the remaining stake based on its $255 million investment.

As the IN VIVO feature explains, pharmas including Merck, Pfizer, Novartis and Teva that have already gotten into biosimilars have various ways of looking at the drug mimicry market. Biogen still may still be of multiple minds (three, perhaps, if the Stevens poem is any guide), as the JV won't be launched formally for another three months. Samsung, however, has already flown into the fray, pushing ahead with a biosimilar of Biogen's own Rituxan (rituximab) for rheumatoid arthritis and certain cancers, and has set up a contract manufacturing organization as part of a separate joint venture with Quintiles, which would provide services to any drugs that come out of the Biogen deal.

Samsung insists the Biogen JV won't develop any biosimilars for Biogen drugs, calling into question whether it will continue to pursue the Rituxan descendant now that the new arrangement is in place. Likely, it'd be far behind others: At least nine companies are already developing Rituxan biosimilars; one, Dr. Reddy's Laboratories, has already launched a product in Peru, Vietnam and the Middle East, while Korean biosimilar specialist Celltrion said last week it would begin trials on a Rituxan follower it's developing with Roche.

Others in Asia, such as Korea-based Hanwha and China's 3SBio, are continuing to develop biosimilars, and Japan's Kyowa Hakko Kirin and Fujifilm said last month that they would begin clinical trials on biosimilars beginning next year. Competition seems to be heating up, particularly in the Far East, for a subset of drugs that Morgan Stanley's David Risinger said in a research note could result in a mid-to-late-decade surge of interest in the U.S. With apologies to the great Wallace Stevens, the river is flowing; the mockingbird must be flying.

Biosimilars mark the edge of one of many circles. Read all about the others in this week's installment of...

J&J/Pharmacyclics: Sunnyvale, Calif.-basedsmall-molecule drug developer Pharmacyclics has partnered one of its most advanced programs, the Phase II cancer treatment PCI-32765, with Johnson &Johnson’s Janssen Biotech division. The arrangement brings Pharmacyclics an up-front payment of $150 million, but milestone payments could add $825 million to the deal’s value. An inhibitor of Bruton’s tyrosine kinase, thought to be useful in fighting hematological malignancies, PCI-32765 acts on the B-cellantigen receptor pathway. It’s currently being studied in chronic lymphocytic leukemia, non-Hodgkin lymphoma and multiple myeloma. The two companies will split development costs 60/40 in favor of Janssen, including the bills for multiple Phase III trials. If the drug is approved, Pharmacyclics will lead U.S. commercialization initiatives, while Janssen will take the lead outside the U.S.; the two will share profits and losses equally. The two companies will also create a shared governance structure to oversee development and commercialization. – Paul Bonanos 

AstraZeneca/Guangdong BeiKang: Biogen aside, at least one other pharma made a deeper move into Asia this week as well. A day after saying it would lay off 24% of its U.S. salesforce due to a “challenging environment,” AstraZeneca PLC indicated it would continue to invest in higher-growth markets like China by acquiring injectable generics maker Guangdong BeiKang Pharmaceutical Company Ltd. for an undisclosed amount. The deal gives AZ a portfolio of medicines for infections while demonstrating its commitment to selling locally manufactured, high-quality branded generics in China. Although the company also successfully sells several innovative therapies in China, including lung cancer treatment Iressa (gefitinib), AZ, like many multinationals, has focused primarily on the branded generics market segment thus far. The British pharma says the deal is part of a strategy to increase access and affordability of medications to Chinese patients, particularly ones who are currently underserved. The company appears to be reaching for rural areas and second-tier markets beyond the major cities along China's eastern seaboard; in a statement, it noted that 800 million Chinese citizens have limited access to treatments available more broadly in larger hospitals in China's major cities. AZ previously invested $200 million on a new plant in Taizhou, China, to manufacture intravenous and oral solid dosage branded generics.- Joshua Berlin 

AstraZeneca/MedicalResearch Council - AZ announced a separate deal closer to home as well. AZ and the U.K.’s Medical Research Council announced a collaboration Dec. 5 in which 22 compounds discovered by the pharma will be made available free of charge to U.K.-based academic researchers. MRC will manage the programon AZ’s behalf and solicit proposals to study the compounds in orderto explore new treatment opportunities. MRC will award grants totaling up to £10 million for projects of up to three years, the council explained in a call for proposals published on its website. AZ moved the compounds into clinical development but then de-prioritized them for varying reasons, a company spokesman explained. “The compounds will fall into two categories: those deemed suitable for both studies in patients and in preclinical models, and those likely to be restricted to preclinical research,” he said. If a researcher chosen by MRC succeeds in producing research AZ would like to continue, the pharma holds the right to collaborate with MRC researchers working on the company or take back the intellectual property it provided through collaboration. New IP developed by the researchers will be the property of the researchers. Perhaps the best-known of the compounds AZ is providing for the research is zibotentan (AZD4054), an endothelin A receptor antagonist, which the company advanced into Phase III in prostate cancer. It was among the late-stage programs the company said it had halted in 2010 due to poor Phase III results or rejection from regulatory bodies.—Joseph Haas 

BMS/J&J: Bristol-Myers Squibb and Johnson & Johnson plan to conquer the $30 billion hepatitis C market through an interferon-free combo of their respective compounds, Bristol’s NS5A replication complex inhibitor daclatasvir and J&J subsidiary Tibotec Pharmaceuticals’ NS3 protease inhibitor TMC435. The combo will be tested in a Phase II study of patients with genotype 1 hepatitis C, slated for early 2012, on their own and in conjunction with one or both parts of the current standard of care –ribavarin and pegylated-interferon. Terms of the collaboration were undisclosed. The tie-up follows news that Gilead has bought out biotech Pharmasset for $11 billion in an effort to get its hands on its mid-stage HCVcompound PSI-7977. Interferon-free combo regimens are thought to be the next frontier of treatment for the liver disease, since the current standard of care has severe side effects. Both daclatasvir and TMC-435 are being tested in combination with Pharmasset’s PSI-7977. - Lisa LaMotta 

Momenta/Virdante: Antibody developer Virdante Pharmaceuticals raised at least $30 million across multiple tranches of a Series A round during 2008 and 2009, but now has sold key intellectual property to publicly traded biotech Momenta Pharmaceuticals for just $4.5 million, and appears to be shutting down. The sale includes $47 million in potential milestones -- roughly the amount its Series A investors were said to have committed if the final tranche of Virdante's Series A round appeared. Momenta gets Virdante's Sialic Switch technology, originally developed at Rockefeller University and thought to allow regulation of anti-inflammatory protein activity. Virdante's Web site was unresponsive late Thursday, and the company was said to be winding down operations; its investors included Thomas McNerny & Partners, Osage Partners, MedImmune Ventures, Clarus Ventures, Venrock and Biogen Idec Ventures. - Paul Bonanos

Many thanks to Joseph Haas and Melanie Senior for their biosimilars reporting.

Mockingbird photo -- "my luckiest picture," according to Flickr user andymw91 -- reproduced under Creative Commons license.

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