Friday, December 23, 2011

Twas DOTW Before Christmas ...

Twas DOTW before Christmas, when all through the house
Not a creature was stirring, not even a mouse.
The term sheets were hung by the chimney with care,
In hopes that St Gilead soon would be there.

The VCs were nestled all snug in their beds,
While visions of 20x danced in their heads.
Though mamma's kerchief biz had a low market cap,
As reverse-merger shell we'd name it after a cat.

When out on the lawn--

With apologies to Clement Clarke Moore, we'll stop there. It's a long damn poem and we've got a surprising amount of deals to get to this week -- nearly enough that we almost switched to a Twelve-Days-of-Christmas theme. It was not to be, but in any case, joyous readers who haven't yet shut down your laptops for some inexplicable reason, do feel free to finish or improve upon our parody for us in the comments. And to all a good ...

AstraZeneca/Hutchison MediPharma & AstraZeneca/Astellas: Avid followers of AstraZeneca's R&D pipeline have had a rollercoaster ride this week, with the U.K. pharmaceutical company announcing early-stage deals with Hutchison MediPharma and the Astellas subsidiary Prosidion, just a day after revealing it had suffered setbacks with two late-stage compounds, olaparib and TC-5214. The approach of the company’s patent cliff and the seemingly constant misfiring of AstraZeneca's R&D engine has sparked suggestions that larger-scale M&A might be a better option for AZ than the slow slog of building a research pipeline. AZ is paying Shanghai-based Hutchison MediPharma $20 million upfront for global licensing, co-development and commercialization rights to volitinib, an IND-stage c-Met receptor tyrosine kinase inhibitor. Hutchison MediPharma will continue to lead the compound's development in China; AZ is leading and funding development elsewhere. Hutchison could receive up to $120 million in clinical development and ‘first sale’ milestones. Additional commercial milestones and up to double-digit percentage royalties on net sales sweeten the pot. AstraZeneca has made significant investments of its own in China, including an R&D facility and its recently opened global clinical operations hub. It is the second largest-selling pharmaceutical company in the country, with a turnover of more than $1 billion in 2010. Hutchison MediPharma already has discovery deals in place with a raft of other multinationals, including Johnson & Johnson, Eli Lilly, and Merck KGaA, but this is the first time it has out-licensed one of its own research programs. Hutchison MediPharma is majority owned by UK-AIM listed Chi-Med, a healthcare group primarily based in China.

AstraZeneca's second in-licensing deal this week adds to the company's already significant efforts in the diabetes area. It picked up an option to acquire two of Prosidion's early-stage diabetes assets, PSN821 and PSN842. Both are potentially first-in-class GPR119 receptor agonists – the GPR119 receptor regulates incretin and insulin secretion, and in preclinical studies the compounds have lowered blood glucose, reduced food intake and reduced body weight. Financial terms were not revealed, other than to say AstraZeneca has paid a non-refundable fee, and will make upfront and milestone payments if it decides to exercise the option after Phase IIa. -- John Davis

Amgen/Watson: Amgen has finally tipped its hand regarding its biosimilar strategy after playing both sides of the issue for years. The Big Biotech and Watson Pharmaceuticals announced on December 19th an alliance to build an oncology biosimilars business focused on monoclonal antibodies. Amgen will make pre-commercial investments, taking the lead in R&D, manufacturing, and initial commercialization; while Watson will contribute $400 million to the venture along with its expertise in commercialization and life cycle management in highly competitive markets. The partners come late to the biosimilars party but still in time for the second wave of more complex biologics, most notably MAbs, projected to lose exclusivity post-2016. Watson, with its lower cost structure and competitive culture will take over commercialization if and when a certain level of maturity and competition sets in. How that level will be defined will be flexible, based on geographic and product characteristics. Neither company would disclose specifics as to how commercial responsibilities will evolve over time. Amgen’s proprietary oncology drugs are excluded from the deal, although both parties agreed that that provision could be revisited later. Should Amgen reverse that decision, Watson will have right of first refusal to negotiate a deal on those drugs. Importantly, Watson is free to develop biosimilar versions of Amgen’s drugs independent of the deal, either on its own or with partners. The deal allows both parties to pursue the biosimilar market together and independent of the alliance, an arrangement that could pit them against each other in the future. Amgen enters the biosimilars field in the context of a weak late-stage pipeline, competitive pressures, a mixed record on recent launches, and the recent departure of its CEO and head of R&D. -- Mike Goodman

Takeda/Intellikine: In one of two deals this week around inhibitors of phosphoinositide-3 kinase (PI3K), Takeda added to its US biotech holdings by purchasing Intellikine for $190 million upfront. In the deal announced Dec. 21, the Japanese pharma’s Millennium unit will take over global development responsibility for Intellikine’s two anti-cancer clinical programs. Intellikine, founded in 2007 and backed with $41 million in venture capital funding, also could earn up to $120 million in milestone payouts tied to potential clinical development events. With the acquisition, Millennium/Takeda also go into business with Infinity Pharmaceuticals, which paid $13.5 million upfront last year for a license to INK1197, a dual PI3K delta/gamma-selective inhibitor for inflammatory conditions. Now called IPI145, that compound moved into a pair of Phase I trials this past October. Driving the buyout were INK128, an mTOR C1/2 inhibitor slated to enter Phase II next year, and INK1117, a selective inhibitor of PI3K alpha, which entered clinical testing in September. -- Joseph A. Haas

Merck/Exelixis: In the other PI3K inhibitor deal this week, Merck on Dec. 21 paid $12 million upfront for an exclusive worldwide license to Exelixis’ PI3K-delta R&D program, including lead compound, XL499. Phase I-ready, the compound has shown potential application in preclinical study in rheumatoid arthritis, allergic asthma and hematologic malignancies, Exelixis says. Under the deal, Exelixis, whose internal focus is on the development of Phase III dual MET/VEGF inhibitor cabozantinib in multiple cancer indications, could earn regulatory and development milestones of up to $239 million from Merck, along with sales-performance milestones and royalties on net sales should any of its PI3K molecules reach the market. -- J.A.H. UPDATE: Exelixis announced via 8-k on Friday that it had parted ways with partner Sanofi -- the two companies had been working in the PI3k space since 2009.

ImmunoGen/Lilly: Despite a licensing deal with Eli Lilly & Co. announced on Dec. 20, ImmunoGen CEO Dan Junius says that the company’s first priority is still its wholly-owned pipeline (which currently has one compound in the clinic and another in IND), a stance the company announced in early 2011. Yet, in an interview Junius acknowledges that partnerships – like the one with Lilly – help the company “leverage its resources and affords ImmunoGen a scale that would not be possible otherwise." ImmunoGen will receive a $20 million upfront in exchange for the rights to an undisclosed number of licenses to ImmunoGen’s TAP (Targeted Antibody Payload) technology. The TAP technology will be used with Lilly’s monoclonal antibodies to develop antibody-drug conjugates (ADC) for the treatment of cancer. ImmunoGen will potentially receive $200 million in milestones for each target that is developed under the collaboration, as well as royalty payments. Any compounds that result for the collaboration will be added to Lilly's cancer portfolio, which includes Alimta (pemetrexed) and Gemzar (gemcitabine), which has seen declining sales since going generic. ADC technology, which allows a monoclonal antibody to carry a therapeutic payload that can target a specific tumor type, has become a hot area in the oncology space. Look for a new feature on the next generation of ADC drugs and drug developers in the next START-UP. -- Lisa LaMotta

Agenus/NewVac: Massachusetts-based Agenus announced Dec. 19 that it has signed a development and commercialization agreement with Russia’s NewVac, a subsidiary of ChemRar High Tech Center, whereby NewVac will commercialize Agenus' Oncophage in Russia and other CIS countries. Oncophage (HSPPC-96; vitespen) is a non-cell based protein pharmaceutical that uses a patient’s own tumor cells to activate an immune response through recognition of their cancer’s unique antigens. The vaccine is currently approved in Russia for the treatment of renal cell carcinoma in the adjuvant setting; a population of about 5,000 to 6,000 people. Agenus currently manufactures the vaccine in Lexington, Mass. NewVac will build a manufacturing facility in Russia where it will begin to make the product itself, and Agensus will get an unspecified royalty on sales. NewVac also will begin studying Oncophage in other indications – specifically melanoma, ovarian cancer and lung cancer. It will be responsible for all costs of development, but Agenus will again receive royalties. Agenus (nee Antigenics) has been having a tough time over the last few years as its stock price dipped below $1 after the failure of Oncophage to meet certain endpoints in renal cancer in a pivotal trial and the rejection of the drug by European authorities. Despite the trial failure, the company had enough clinical evidence to pursue approval in Russia. -- L.L.

Metamark/Janssen: Privately held Metamark Genetics has inked a deal with Johnson & Johnson subsidiary Janssen Biotech for its cancer diagnostic platform. The Massachusetts-based company will get an undisclosed upfront, as well as $365 million in potential milestone payments and royalties on products associated with the companion dx -- no small feat for a diagnostics play. Metamark's Prognosis Determinants platform is meant to identify specific cancer targets that may play a casual in promoting tumor progression. -- L.L.

BMS/Gladstone: Bristol-Myers Squibb and the Gladstone Institutes in San Francisco are teaming up for three years to investigate novel targets in Alzheimer's disease, the groups said Thursday, December 22. The partnership will focus on tau-mediated dysfunction. Tau is one protein in the brain implicated in Alzheimer's; normally it provides internal structure to healthy neurons, but as neurons die, the tau aggregates into clumps, or "tangles," in the brains of Alzheimer's patients, although it's unclear if the tangles are a cause or an effect of the pathology of the disease. Other companies such as TauRx and Allon Therapeutics have investigated tau-related interventions, but most clinical development in Alzheimer's has focused on amyloid beta (a-beta), the protein that aggregates into tell-tale plaques in the brains of victims. BMS and Gladstone did not disclose terms of their three-year discovery-stage collaboration. They have a common bond: Gladstone president R. Sanders "Sandy" Williams is on the BMS board of directors. The next year should be a big one in Alzheimer's research, with data due from high-profile Phase III trials of bapineuzumab, an anti-a-beta treatment developed by Elan and now mainly in the hands of Johnson & Johnson and Pfizer. Bristol's most advanced Alzheimer's treatment is in Phase II trials. -- Alex Lash

Viropharma/Meritage: Viropharma has paid $7.5 million up-front, and could pay $12.5 million more in development milestones, for the right to acquire Meritage Pharma at pre-set terms. We love a good option-to-buy around here. As we've seen before, they don't always work out, but as in the case of the recently abandoned Actelion/Trophos option, they can provide a good way to both finance development of a rare- or orphan-disease drug candidate as well as set up investors with a tidy if not home-run return. To wit, Meritage is pursuing development of oral budesonide against eosinophilic esophagitis, a chronic inflammatory condition for which no drug is approved. Phase IIb data from a pediatric study were presented in May 2011 at the DDW conference. The company, which emerged from the rubble of the once-promising pediatric specialty play Verus Pharmaceuticals, is narrowly focused around oral budesonide and backed by $30.5 million from Domain Associates, Laterell Venture Partners and the Vertical Group. Like Verus (and a large handful of other biotechs) it's the brain-child of founder, chairman and prolific entrepreneur Cam Garner. Following the completion of additional Phase II work, and once FDA has agreed on a Phase III plan for oral budesonide, Viropharma can opt to pay $69.9 million plus earn-outs to acquire the program. --CM

Baxter/Momenta: Baxter and Momenta said on Dec. 22 that they would team up to develop and commercialize follow-on biologics (that's biosimilars to some of you). Momenta gets $33 million up-front and up to $470 million $391 million in potential future milestones, $28 million in potential option fees, plus royalties. The deal adds Baxter to current Momenta partner Sandoz, which sells Momenta's generic Lovenox and hopes to one day sell its generic Copaxone as well, and comes on the heels of a flurry of activity in the biosimilars space. Besides Amgen/Watson, above, two weeks ago Biogen got together with Samsung Biologics in a biosimilars JV. Now that everyone's into the pool, expect to see a lot of splashing around. As a November feature in IN VIVO describes, for several recent entrants, the biosimilars game isn't just about creating copies; it's about promoting and branding a new kind of hybrid proposition where the innovation isn't in the molecule, but in how you make it, position it, and support it. In this sense biosimilars reflect the broader payor-driven push away from scientific novelty toward a focus on value. --CM & MS

No comments: