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Friday, March 16, 2012

Deals of the Week Seeks the Luck of the Irish


Perhaps you’ll feast on corned beef, cabbage, potatoes and an adult beverage or two this weekend, in honor of St. Patrick’s Day. If your waistline should fluctuate a bit from the indulgence, think of Dublin, Ireland-headquartered Shire plc, a company that fattened up with one deal while trimming down its efforts in another area this week.

Shire’s recent growth has been tied to specialty business areas in which the company believes it can introduce successful drugs supported by small sales forces. Among its strong performers are two orphan drugs for lysosomal disorders, including Elaprase (idursulfase) for Hunter syndrome and Replagal (agalsidase alfa) for Fabry disease. The latter, long marketed in Europe, seemed poised for U.S. approval, thanks in part to a treatment IND that allowed its distribution in the wake of Genzyme’s manufacturing issues around Fabrazyme (agalsidase beta). But Shire’s dialogue with FDA soured as the agency requested a more arduous series of trials than Shire expected, leading the company to withdraw its BLA filing for Replagal on the afternoon of Mar. 14.

Rather than drown its sorrows, though, the company bounced back with an acquisition the following morning. Shire hopes it’s found a four-leaf clover in FerroKin Biosciences, a hematology specialist for which it paid $100 million up-front, in a deal that features an additional $225 million earn-out. FerroKin’s key asset is FBS0701, a Phase II candidate that helps rid excess buildup of iron in the blood and organs, typically found in patients who undergo frequent blood transfusions. Lawson Macartney, senior VP of Shire’s emerging business unit, told The Pink Sheet DAILY that the acquisition is part of Shire’s plan to move deeper into hematology; it already has Xagrid (anagrelide) for essential thrombocythaemia, which generated $90.6 million in revenue last year.

Shire hopes the oral capsule FBS0701 will compete with Novartis’ Exjade (deferasirox), another iron chelator delivered as an oral solution. That drug carries a black-box warning for renal and hepatic impairment and gastrointestinal hemorrhage; Shire thinks its compound can improve on Exjade's safety profile. The luckiest parties in the deal – or maybe they were just good – are FerroKin’s venture investors. They include Burrill & Co., Clarus Ventures, MP Healthcare Venture Management, and HealthCap, all of whom enjoyed a healthy exit two years after FerroKin’s $12 million Series B round.
Whether you indulge yourself or not, we hope you’ll enjoy the holiday responsibly. A-rovin’, a-rovin’, a-rovin’ we go, with the latest installment of…


Merck/Calibr: Merck renewed its commitment to academic research, and to San Diego, making a $90 million investment to create the California Institute of Biomedical Research, or Calibr. The funding, announced Mar. 15, will span seven years, and Calibr will be run by prominent Scripps chemist and entrepreneur Peter Schultz. Schultz has had his share of experience with biotechs, founding eight himself: Affymax Research Institute, Syrrx, Kalypsys, Phenomix, Symyx Therapeutics, Ilypsa, Ambrx and Wildcat Technologies. He also founded and was the institute director of the Genomics Institute of the Novartis Research Foundation in San Diego from 1999 to 2010. Backing Schultz’s leadership will be a scientific advisory board led by Harvard's Christopher Walsh, and will include Merck Research Laboratories president Peter Kim. A board of directors led by 5AM Ventures founder and managing partner John Diekman will also help run the show. The staff at Calibr, which will eventually include 100 to 150 people, as well as the board of directors and the scientific advisory board will collaborate to choose the projects that the institute will take on. Schultz estimates that once everything is up and running, the institute will handle 15 to 20 ongoing projects at any given time. Projects will be chosen from academic institutions and will be based on “novel biology.” Merck is one of many Big Pharmas trying to bridge the gap between industry and academia, including Pfizer and Bayer, which have also established similarly structured institutes in scientific hotspots around the country. – Lisa LaMotta

GlaxoSmithKline/Epistem: GlaxoSmithKline and U.K. biotech Epistem PLC announced a three-year collaboration March 9 around using Epistem’s proprietary RNA-Amp technology platform to identify biomarkers useful in development treatments for and/or treating fibrotic disease. Financial terms were not disclosed. Several companies, including Bristol-Myers Squibb and Gilead Sciences, are competing to bring the first drug therapy for idiopathic pulmonary fibrosis to market in the U.S. – worldwide, IPF is thought to offer a potential blockbuster market. As of March 2012, GSK’s pipeline lists 15 compounds in clinical development for respiratory and immuno-inflammation indications, most of them targeted at asthma or chronic obstructive pulmonary disease, but none specifically cited as a candidate for fibrotic disease. The collaboration with Epistem will focus on identifying key characteristics of diseased fibrotic tissue – RNA-Amp is a highly sensitive amplification technology that can derive gene-expression data from minimal tissue samples and/or numbers of cells. Previously, the biotech partnered in 2009 with Novartis to collaborate on development of new therapeutic candidates for epithelial conditions, including cancer and gastrointestinal disorders.—Joseph Haas

Biogen Idec/MAKScientific: Discovery firm MAKScientific LLC has signed a big partner, Biogen Idec, in a small deal that gives Biogen an option to select discovery-stage drug candidates for the treatment of multiple sclerosis and other neurodegenerative diseases. The privately-held, Boston-based drug discovery firm works in cannabinoid pathways. In the partnership, announced March 14, Biogen gains an exclusive worldwide option to select discovery-stage drug candidates for all indications worldwide. The company will pay up to $3 million if it chooses to exercise the option and an additional $31 million in milestone payments for clinical development. – Jessica Merrill

Sanofi/Pluromed: Sanofi has today announced the acquisition of Mass.-based surgical goo maker Pluromed for undisclosed terms. The deal brings Sanofi's biosurgery division Pluromed's proprietary polymer technology Rapid Transition Polymers and the FDA-approved LeGoo, a gel used during surgeries to temporarily plug blood vessels. (Conveniently for Sanofi and for our half-grasp of the language, LeGoo probably means The Goo in French.) The LeGoo goo was approved by FDA in September and in today's release Pluromed CEO Jean-Marie Vogel gives Sanofi a vote of confidence for its ability to launch the goo and drive adoption. Formerly Genzyme Biosurgery, Sanofi's biosurgery unit markets a suite of products focused on cartilage repair and osteoarthritis treatment. The deal underscores Sanofi's willingness to further diversify away from its core drugs business. -- Chris Morrison

GSK/Omega Pharma: European consumer health care products firm Omega Pharma bolstered its already broad OTC portfolio with six brands from GlaxoSmithKline, but GSK’s sluggish consumer business remains saddled with the once-prized weight-loss drug Alli. Omega Pharma will pay €470 million ($619 million) for six brands – Lactacyd feminine wash products, Abtei supplements, Solpadeine analgesics, Zantac antacid, Nytol sleep aids and the allergy drug Beconase, the firms said March 15. The combined sales of the Glaxo brands exceeded €200 million in 2011, and “will significantly strengthen Omega Pharma’s product portfolio and will create critical mass for the company in key markets including Germany, the U.K., Poland and Italy,” the Belgian firm said. Included in the deal, part of GSK’s plan to simplify its consumer business by selling 19 OTC brands worth about 10% of the firm’s total consumer business, Omega will also acquire the Big Pharma’s Herrenberg manufacturing site in Germany. GSK originally wanted to sell the brands to a single global buyer, but parceled out 17 North American OTC lines to Prestige Brands Holdings in December. GSK says it “remains in active discussions” about the sale of the few lingering brands it wants to sell outside of Europe and North America – including the beleaguered Alli, the lower-dose version of Roche’s prescription weight-loss drug Xenical that has seen sales fall steadily and sharply since its much-anticipated and briefly successful launch in 2007.—Elizabeth Crawford 

Alcon/ThromboGenics: Having previously planned to market its lead compound itself, Belgian biotech ThromboGenics has now taken a different tack, and licensed ex-U.S. commercialization rights to its vitreomacular adhesion therapy, ocriplasmin, to the Novartis eye care unit, Alcon. ThromboGenics says it still wants to build up a marketing organization in the U.S., and will work closely with Alcon on ocriplasmin's marketing in the top five European markets. However, Alcon will market the product in more than 40 countries when approved – it is awaiting approval in Europe, and is expected to be resubmitted for priority review in the U.S. shortly. The agreement between ThromboGenics and Alcon is valued at $500 million in total, with ThromboGenics receiving a hefty upfront payment of $100 million, and just over a similar amount in milestone payments, which will probably push the company into profitability this year. Ocriplasmin stops the vitreous humor from sticking and pulling on the retinal membrane at the back of the eye, which causes blurred vision and, in severe cases, macular holes and central blindness. The product also has potential in the treatment of age-related macular generation, and could be combined with a VEGF inhibitor such as Novartis's Lucentis (ranibizumab). The deal is the first in the biopharmaceuticals area to be concluded by Alcon since it was acquired by Novartis last year. - John Davis
 


Pfizer/Biocon: In our "No Deal" of the week, Pfizer walked away from a $100 million-plus investment on March 12, terminating its biosimilars partnership with Biocon Ltd., India's largest biotechnology firm, under which it would have commercialized generic versions of four diabetes drugs worldwide. Both parties said the split reflects a desire by each company to focus on "individual priorities for their respective biosimilars businesses." Pfizer said it remains committed to biosimilars development, particularly in the areas of monoclonal antibodies and recombinant proteins. Biocon will continue its effort to develop and market biosimilar versions of recombinant insulin as well as of Sanofi's Lantus, Novo Nordik's Novolog and Eli Lilly's Humalog. At the time the agreement was signed in October 2010, Pfizer, not a traditional player in the diabetes space, projected a growing diabetes market that would reach $40 billion a year for drugs and devices, with insulin products controlling about 35% of that business, or $14 billion. Pfizer was to pay Biocon $200 million up-front, with the potential for up to $150 million in development and regulatory milestones, along with potential sales royalties on the four products. As of the split, Pfizer had paid Biocon $100 million, with the other $100 million kept in escro, tied to progress on building a biosimilars manufacturing and R&D facility in Malaysia. Biocon will continue building that facility, with the funds from Pfizer. - J.H.

Thanks to Jessica Merrill, who reported on the Shire/FerroKin deal for Pink Sheet DAILY. Magically delicious leprechaun cake image courtesy of Flickr user Signature SugarArt, reproduced under Creative Commons license.

2 comments:

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David F said...

I am not sure if having a small sales-force will help in promoting new drugs. If you have a blockbuster drug which is unique and getting plenty of free press (like Viagra in the 90's)you can get by with having a smaller sales-force. It is best to save money in other areas like lowering operating costs and reducing heavy management structures.