DOTW Spies the Brandification of Generics

With workhorse blockbusters like Lipitor (atorvastatin), Zyprexa (olanzapine) and Plavix (clopidogrel) losing patent protection within six months of one another, generic drugs are at their peak this year – and that puts the generic drug industry teetering at the brink of its own generic drug cliff. Impax Laboratories Inc. hasn’t been as busy diversifying and beefing up its branded portfolio as some of its larger generic competitors, but the company’s brand side did get a boost from a deal with AstraZeneca, announced Feb 1.

Impax bought U.S. commercial rights to AstraZeneca’s migraine medication Zomig (zolmitriptan), both the tablet and nasal spray formulations, for $130 million plus tiered royalties on sales. Impax has said it wants to “transform into a specialty pharma” with a focus on CNS, but it generates most of its sales from generics. The only brand sales come from a co-promote with Pfizer for Lyrica (pregabalin; a relationship stemming from a 2008 patent infringement settlement between Impax and Wyeth).

The in-licensing deal with AstraZeneca looks to be a smart move for Impax. Zomig will keep the firm’s contract sales force occupied once the Lyrica co-promote expires in June while the company awaits word from FDA on an NDA for IPX066, an extended release formulation of carbidopa-levodopa for Parkinson’s disease. Impax submitted the NDA for IPX066 in December. Zomig offers Impax an opportunity to ramp up its contract sales group ahead of a potential launch. The sales team is made up of 64 reps, but the company plans to add 20 more to support Zomig. Eventually, the company would like to have 120 to 130 reps if IPX066 is approved. Outside the U.S., the drug is partnered with GlaxoSmithKline.

Zomig hasn’t been detailed by AstraZeneca for “several years,” Impax said, so there is an opportunity to jumpstart sales. U.S. sales were $163 million for the 12 months ended Sept. 30. About 40% of scripts come from neurologists, the physicians Impax is looking to target with IPX066. But Impax will have to act fast. The patent expiration for Zomig tablets is in May 2013, though the nasal spray has longer patent protection, out to 2021.--Jessica Merrill

Two other deals this week, both by Germany’s Stada, further highlight how the generic industry is scrambling to diversify. More discussion below in the never generic …

Stada/Grünenthal and Spirig: German generics firm Stada enhanced its presence in Central and Eastern Europe and in the Middle East by acquiring marketed brand products from Grünenthal and a generic business from Switzerland’s Spirig. The acquisitions come as the company is facing unprecedented pricing pressure in its home market. In the larger of the two deals, Stada paid Grünenthal €312 million for rights to a portfolio of more than a dozen branded products in Europe and the Middle East, mainly in pain management. The portfolio includes drugs like Tramal (tramadol), Zaldiar (tramadol plus paracetamol), and Transtec (buprenorphine patch). The deal also includes Grünenthal's newest drug, the dual-action analgesic, Palexia (tapentadol), which is currently being launched in European markets and is licensed to Johnson & Johnson for marketing in the U.S. The smaller deal saw Stada buying Spirig’s generic business in Switzerland for CHF 97 million ($106 million). Stada said the acquisitions will strengthen its presence in the CEE region, where its sales are growing more rapidly than in Western Europe. In the first nine months of 2011, Stada's sales in Western Europe increased 2% to reach €868.4 million, whereas sales in Eastern Europe grew by 23% to €333.3 million. The Grünenthal acquisition will also open up new strategic distribution channels for products from its current portfolio, which in the future can also be marketed as branded products, the company said. —John Davis

Shire/Sangamo: In a move to add to the pipeline for its growing Human Genetic Therapies division, Shire is paying Sangamo BioSciences $13 million upfront in a licensing agreement to develop therapies for hemophilia and other monogenic diseases using the California biotech’s zinc finger DNA-binding protein (ZFP) technology platform. In the deal announced Feb. 1, Shire obtains worldwide rights to ZFP compounds that will target four genes – the blood-clotting Factors VII, VIII, IX and X – in an effort to produce new therapies for hemophilia A and B. Shire also gets the right to designate three additional gene targets – ZFPs, which can be engineered to recognize any specific DNA sequence within a gene, are thought to offer targeting potential in other therapeutic areas of interest to Shire, including hematology and lysosomal storage disorders. Under the alliance, Sangamo will handle all preclinical work up to filing of INDs with the FDA and Clinical Trial Applications with the EMA. Shire will reimburse Sangamo for research-related costs and also pay regulatory, development and commercial milestones, as well as sales royalties. Platform technology licensing deals are nothing new to Sangamo, which most recently licensed its ZFP nuclease technology to Pfizer, to help the pharma genetically alter Chinese hamster ovary cell lines to enhance the efficacy of protein and antibody therapeutics in 2008. We wrote about the latest DNA editing technologies in the January 2012 START-UP.—Joseph Haas

Covance/BioPontis: Contract research organization Covance will be responsible for drug development support for investment firm BioPontis Alliance, a three-year old firm focused on early translational research and science sourced through partnerships with academia. Covance will provide discovery, preclinical, bioanalytical, CMC, clinical, central laboratory and commercial support under the arrangement. BioPontis is tapping universities to evaluate thousands of compounds with plans to whittle them down to dozens and take them from preclinical development to Phase I. Our sister publication START-UP featured BioPontis here.—Jessica Merrill

Merck KGAA/Threshold Pharmaceuticals: Only weeks before a potentially value-boosting Phase II trial in pancreatic cancer patients is expected to read out, Merck KGAA has nabbed worldwide rights to Threshold Pharmaceuticals’ TH-302, a small molecule drug candidate also in Phase III for soft tissue sarcoma. TH-302 is thought to be active in hypoxic, or low-oxygen environments that are typical of tumors. Threshold will receive $25 million up-front, with the potential of a $20 million near-term milestone if the pancreatic trial results are positive. In all the small company could see $280 million in pre-commercial milestone payments and an additional $245 million in milestones and tiered double-digit royalties based on sales of the drug. The companies will jointly develop TH-302 (largely sharing the workload evenly with Merck picking up 70% of the costs, but Threshold will continue to lead the compound’s development in the soft tissue indication in the U.S.) and Threshold retained a U.S. 50/50 co-promotion option. – Chris Morrison

Takeda/Durect: Bad news is snowballing for Durect. On the heels of a failed Phase III study of its post-operative pain drug Posidur, Takeda has backed out of a co-development and commercialization deal for the drug in Europe and other territories. Takeda said Jan. 30 it would return rights to Posidur, which it gained through its acquisition of Nycomed, last year. Posidur is a long-acting depot formulation of bupivacaine made with Durect’s patented SABER technology, designed to provide up to three days of pain relief post-surgery. However, the drug failed to show statistically significant benefits on pain intensity and use of opioid analgesics compared to placebo in the Phase III study BESST. Nycomed paid $14 million upfront for rights to the drug in a 2006 collaboration. Meanwhile, Durect says it will focus on developing the drug in the U.S., where the company is partnered with Hospira. A pre-NDA meeting with FDA to determine a path forward is expected later this year, but it looks like Durect will have a hard case to make—JM

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