Deals of the Week: Prime Time For Parkinson's

Parkinson’s disease is about to receive plenty of media attention. Most of that will come as NBC’s The Michael J. Fox Show makes its debut Sept. 26, returning its star to center stage in a sitcom that deals with neurodegenerative disease. But here at Deals of the Week, we’re pointing our camera at a small but potentially influential Big Pharma bet on a company whose early progress in Parkinson’s is funded by the foundation that bears Fox’s name.

Biogen Idec and Amicus Therapeutics revealed a tie-up this week that will fund continued research on the link between the glucocerebrosidase, or GCase, enzyme and Parkinson’s. Known primarily for its research in rare lysosomal disorders such as Fabry disease and Pompe disease, Amicus specializes in repairing lysosomal enzyme function related to protein instability and misfolding. There’s a connection between those disorders and Parkinson’s: Scientists have known since the late 1990s about a connection between Gaucher disease, another lysosomal storage disorder, and Parkinson’s; mutations in the GBA1 gene cause Gaucher, and are a known risk factor for Parkinson’s. And indeed, Amicus’s continued research on a first-generation Gaucher product showed early promise in treating Parkinson’s as well.

The Michael J. Fox Foundation, one of the best-known Parkinson’s charities, has funded preclinical research on Amicus’s AT3375 since 2006. Beginning with a predecessor compound, AT2101, Cranbury, N.J.-based Amicus learned that pharmacological chaperones could be used to stimulate GCase activity, prevent buildup of alpha-synuclein – a protein associated with Parkinson’s – in mice’s brains, and improve motor function. That led to the development of AT3375, a more potent and selective next-generation product, and a series of MJFF grants.

The Biogen Idec deal includes discovery, development and commercialization of new molecules that address GCase activity. The companies didn’t disclose specific terms, but said Biogen Idec will own the candidates, fund the projects, and reimburse Amicus for its employees’ time, while Amicus can receive milestone payments and “modest” royalties if a product succeeds in the clinic and is commercialized.

It’s the latest among several Parkinson’s deals for Biogen Idec, including its 2010 purchase of an alpha-synuclein-targeting compound from Neurimmune Holdings. The pharma has also invested in neurodegeneration start-up Knopp Biosciences, most recently in November 2012.

Overall, the Parkinson’s field is still dominated by generic drugs. In light of some recent discoveries, it's possible that both symptomatic and disease-modifying treatments could reach the market within several years, though none will imminently. The clinical failure of Merck’s Phase III candidate preladenant in May raised some doubts about one class, adenosine A2A agonists.

But if the Biogen/Amicus deal is a modest step forward, it’s still another sign that a pharma will commit capital to an early-stage Parkinson’s project with a lot yet to prove. Other recent alliances include a couple of university deals. AstraZeneca partnered with Tufts University in a broader neuroscience pact in July. And last year, Bristol-Myers Squibb licensed a group of metabotropic glutamate receptor 4 modulators from Vanderbilt Center for Neuroscience Drug Discovery. Plus, watch for coverage of Civitas Therapeutics’s latest venture funding, another bet on Parkinson’s disease that’s likely to be featured in Deals of the Week’s cousin, Financings of the Fortnight, next week. --Paul Bonanos

Which other deals are ready for prime time? We'll do our best Don Pardo voice to introduce...

Biogen Idec/Isis: Biogen has been an active dealmaker lately, and struck another partnership with a familiar ally. In a move that capitalizes on the already-existing relationship, Biogen teamed with Isis Pharmaceuticals for a fourth partnership – one that broadens their discovery work in antisense technology and raises the stakes financially. The two companies announced what Isis refers to as ‘Biogen 4’ on Sept. 9. The broad, six-year strategic research collaboration will use Isis’s antisense technology to discover and advance compounds that treat neurological conditions. Biogen will pay $100 million upfront – the payment will be reflected in its third quarter R&D expenses – and Isis is eligible to receive as much $220 million in milestone payments, as well as royalties and clinical trial expenses. Once targets are validated the team can choose to utilize Isis’ antisense technology or opt to develop a small molecule or biologic. Should antisense be chosen, Isis will receive an additional $10 million milestone payment and have the opportunity to earn an additional $250 million in pre-commercial milestone payments. If not, Isis still will receive a $5 million milestone and have the potential for another $85 million in milestones. The strategic relationship builds on three earlier collaborations inked in the last two years, including one around a Phase II program to develop a treatment for spinal muscular atrophy. –Lisa LaMotta 

Merck/AstraZeneca: AstraZeneca’s in-licensing of Merck's MK-1775 for study in certain types of ovarian cancer is the UK drug maker’s latest move to build a dynamic oncology portfolio and highlights its keen focus on the DNA damage response area and efforts to induce cancer cell death. Under the Sept. 11 deal, Merck will receive $50 million upfront, and will be eligible for undisclosed development and regulatory milestone payments, as well as tiered royalties. MK-1775 is currently in Phase IIa clinical studies in combination with standard of care therapies for treating patients with P53-deficient ovarian cancer. WEE1 helps to regulate the cell-division cycle and WEE1 inhibitor MK-1775 is designed to cause certain tumor cells to divide without undergoing the normal DNA repair processes, ultimately leading to cell death. For AstraZeneca, the addition of WEE1 inhibitor MK-1775 gives it yet another agent that targets tumor-specific DNA damage response dependencies, such PARP inhibitor olaparib and first-in-class AZD6738. Preclinical evidence suggests that MK-1775 can enhance anti-tumor properties in conjunction with DNA damage-inducing chemotherapy agents.  AstraZeneca intends to study the compound in a range of solid tumor cancer types as part of a concerted push in oncology, part of a larger turn-around plan. Merck will continue to focus on its later stage oncology candidates, MK-3475 and vintafolide. In the spring, FDA granted breakthrough status to MK-3475, or lambrolizumab, a PD-1 specific monoclonal antibody for the treatment of advanced malignancy. Vintafolide is a treatment for a variety of tumor types expressing folate receptors, including ovarian and lung cancers, which Merck licensed from Endocyte Inc. in April 2012. It is paired with a radio-labeled imagingn agent to identify high-responding patients whose tumors express folate receptors. – Sten Stovall

Roche/Inovio: Roche announced a deal Sept. 10 to license two preclinical assets, one of which will be used as a potential combination with other cancer immunotherapy candidates in the Swiss pharma’s pipeline. Its partner, Inovio Pharmaceuticals gets $10 million upfront in exchange for rights to INO-5150 for prostate cancer and INO-1800 for hepatitis B, as well rights to use an electroporation delivery technology for the two candidates. Both candidates are multi-antigen DNA immunotherapies well into preclinical work. Inovio CEO Joseph Kim said ‘5150, which targets both prostate-specific antigen and prostate-specific membrane antigen, could move into clinical development before the end of the year. In a release, Roche said it plans to use ‘5150 in combination with cancer immunotherapies in its pipeline in hopes of developing next-generation approaches to treating a variety of cancers. Roche also gets an option to license additional back-up vaccine candidates that Inovio will discover and develop, as well as an exclusive license for use of the biotech’s Cellectra electroporation technology in the development of ‘5150 and ‘1800. In addition to the upfront payment, Roche also will finance the remaining preclinical work for the two candidates. Inovio could earn development and commercial milestones up to $412.5 million for the two programs and up to double-digit tiered royalties on product sales. – Joseph Haas

Cellceutix/PolyMedix: One company’s loss may be another’s gain. In this case, Cellceutix is taking advantage of PolyMedix’s bankruptcy to acquire the company’s assets at an affordable price and strengthen its own portfolio. Cellceutix said Sept. 9 it will acquire the Phase II antibiotic brilacidin and eight other compounds previously in development at PolyMedix for $2.1 million in cash and 1.4 million shares of Cellceutix stock, in a deal orchestrated in bankruptcy court. Financially distressed PolyMedix filed for Chapter 7 bankruptcy protection April 1, after it ran into trouble in May 2012 while testing a different product, PMX-60056, in development for reversing the anticoagulant activity of unfractionated heparin in patients undergoing percutaneous coronary intervention procedures. Brilacidin will be Cellceutix’s latest-stage compound in clinical development, and the company said it is anxious to begin Phase III trials testing the first-in-class defensin mimetic. The question now for Cellceutix is if it will be able to succeed where PolyMedix failed and turn brilacidin and other molecules in the portfolio into valuable late-stage drugs. - Jessica Merrill

GSK/Suntory: By arranging the sale of its iconic drink brands Lucozade and Ribena to Suntory Beverage & Food of Japan for net proceeds of £1.3 billion ($2.11 billion), GlaxoSmithKline has disposed of two valuable non-core assets, freeing itself to focus on its late-stage drug and vaccine pipeline. The Sept. 9 divestment had been expected after GSK in April said it had put Lucozade and Ribena on the auction block. Introduced in 1927 and 1937 respectively, the two drinks deliver strong cash flow and together generate annual sales of around £600 million ($915 million). Both drinks are well-loved in Glaxo’s home country, but lack global reach, especially in the emerging markets that are now becoming the focus of the British drugmaker's consumer health business. Proceeds from the sale will be used to reduce GSK’s debt. SBF, the number 4 supplier of soft drinks globally in 2012, will get global rights to the two brands and GSK’s Coleford, UK, manufacturing site in the Forest of Dean. Most employees at the site and those working on Lucozade and Ribena in commercial and R&D functions will transfer to SBF. In Nigeria, GSK will continue to manufacture and distribute Lucozade and Ribena under license. The deal is part of a number of housekeeping moves set in motion early in 2013 by GSK’s chief executive Andrew Witty. They include hiving off some 50 medicines, including stomach acid treatment Zantac (ranitidine), migraine medication Imitrex (sumatriptan) and anti-nausea treatment Zofran (ondansetron), into a separate global established products portfolio. - S.S.

Bayer/Broad Institute: MIT and Harvard-backed cancer research center The Eli & Edythe L. Broad Institute turns 10 this year, and is solidifying its status as a key partner for pharmas. Its latest ally is Bayer: the German giant inked a five-year oncogenomics deal under which the pair will attempt to discover new drugs that target genomic alterations selectively. The two didn’t release financial terms of the Sept. 10 deal, but the early-stage collaboration gives Bayer an exclusive option to license the compounds discovered jointly, at the pre-clinical stage. Bayer and the Broad Institute will share their compound libraries, screening platforms, and expertise, and establish a joint steering committee to decide which candidates to pursue. Established in 2003 with a $200 million gift, the Broad Institute was enlarged in 2008 when its namesake benefactors donated another $400 million. The Cambridge, Mass.-based Institute struck a two-year antibiotics research deal with AstraZeneca in September 2012, and a multi-year agreement with Roche to explore repurposed drugs in December 2012. It also granted NanoString Technologies Inc. rights to a genetic signature implicated in liver disorders, invented by Broad Institute CSO Todd Golub, in April. – P.B.

Deals Of The Week Wonders: Who Will Buy Onyx?

When was the last time biotech had a really juicy, successful, high-stakes bidding war? Likely the $10.2 billion Pharmasset acquisition by Gilead Sciences announced in late 2011, which since has played out quite nicely for the latter. Not only did that deal help drive Gilead shares up by about 150% since the deal announcement, but it also tipped off the start of a very long bull-run for the sector.

If Onyx Pharmaceuticals attracts a bevy of bidders, garners a tidy premium for shareholders, and proves a strong asset for an acquirer, its activities could help bolster a flagging biotech stock market. Mostly in June, the NASDAQ Biotechnology Index has shed almost all of a tidy 9% it gained in the first few weeks of May.

If a competitive Onyx acquisition plays out, a deal could come in the fall. That would coincide perfectly with a roster of large-cap clinical and regulatory milestones – which together might breathe life back into a biotech rally that’s getting very long-in-the-tooth.

For now, Wall Street seems certain that the biotech will attract a flock of suitors, culminating in a deal. In fact, Onyx shares are trading well above Amgen’s $120 per share bid, which Onyx publicly confirmed on June 30 that it had rejected. It hired Centerview Partners to contact other potential acquirers, but said it already had interest from undisclosed third parties. Onyx shares closed at $133.52 on July 3, giving the biotech a $9.7 billion market cap.

Potential bidders could include a number of pharmas with existing oncology franchises that need to bolster their bottom lines, such as Pfizer and Merck & Co. Also in line could be established players in the multiple myeloma (MM) market including Celgene and Takeda, in addition to likely pharma players betting on MM monoclonal antibodies such as Bristol-Myers Squibb and Johnson & Johnson. J&J is partnered with Takeda on MM treatment Velcade (bortezomib).

Onyx investor Oliver Marti of Columbus Circle Investors expects to see more than a half-dozen potential suitors emerge, with an acquisition taking about three months to play out. He expects other companies ultimately will prove more aggressive than Amgen, although he does expect Amgen to raise its bid. Marti thinks $140 per share would be an acceptable price.

Amgen has done only a handful of billion-dollar deals. In 2001, Amgen acquired inflammation company Immunex for $17.9 billion in cash and stock. That’s its only deal for more than a couple billion dollars. Since then, it’s done four deals in the roughly $1 billion to $2 billion range including $2.2 billion for antibody play Abgenix  in 2005, $1.3 billion in a stock swap for gene expression regulation company Tularik  in 2004, up to $1 billion in cash and milestones for cancer vaccine company BioVex  in 2011 and $1 billion in cash for antibody company Micromet in 2012, according to Elsevier’s Strategic Transactions database.

“Pfizer and Bayer are natural candidates, Takeda could be a player as well,” added Dallas Webb of BB Biotech, also an Onyx investor. He anticipates the next round of bids will start at $130 and “depending on the number of bidders should go north of that.” He expects more clarity within the next month on the acquisition process.

Various analysts have pegged a likely Onyx per-share sale price in the roughly $135 to $148 range. On top of that, there could be a contingent value right, particularly for oral MM proteasome inhibitor oprozomib. Gene Mack of Brean Capital proposed a $135 buyout share price, with a CVR of about $30 tied to oprozomib approvals in relapsed/refractory and newly diagnosed MM patients, as well as sales milestones based on up to $2 billion.

Pfizer and Bayer are major Onyx partners. Kidney and liver cancer drug Nexavar (sorafenib) as well as colorectal cancer and gastrointestinal stromal tumor treatment Stivarga (regorafenib) both resulted from the Bayer partnership. Bayer evenly splits Nexavar profits globally with Onyx, excluding Japan, and pays Onyx a 20% net royalty on Stivarga global net sales. The partners recently submitted in the U.S. and EU for Nexavar to treat thyroid cancer.

Onyx co-promotes Stivarga under a fee-for-service arrangement, Bayer has the right to terminate the Stivarga co-promote under a change-of-control agreement. But the Nexavar and Stivarga royalties would survive a change-of-control. Onyx was savvy enough to add that to an October 2011 renegotiation of its Bayer partnership, likely in preparation for a clean acquisition down the road.

Wall Street is skeptical that Bayer would buy Onyx in its entirety, although it may seek to fully capture Nexavar and Stivarga rights. Analyst Tim Race of Deutsche Bank, who covers Bayer, noted in a June 28 call that Bayer long has maintained that buying its biotech partners usually is too expensive and that, given its full pipeline, it doesn't need a major new product at this time. He added that Bayer is very hard-nosed about price and likely to walk away from a high valuation. In addition, Bayer would need to raise debt, a move that would damage its credit rating – something Race sees Bayer as unlikely to do.

Onyx partner Pfizer may be a more likely bidder, as the big pharma has made building an oncology franchise a top priority. Onyx and Pfizer have a partnership dating back to 1995 for high-profile Phase III breast cancer candidate palbociclib (formerly PD-991), which recently received breakthrough therapy designation from FDA.

Onyx stands to earn an 8% royalty on palbociclib should the compound get to market. That revenue stream could amount to almost a half-billion in 2026, when analysts expect the drug could generate around $6 billion in sales. If Pfizer really believes in this product, it might be motivated to capture all the palbociclib upside and also add likely blockbuster multiple myeloma drug Kyprolis (carfilzomib).

Existing MM competitors also are likely Onyx acquirers. Celgene's revenue is underpinned largely by MM immunomodulator Revlimid (lenalidomide), which increasingly is being used and tested in combination with Onyx’s Kyprolis. Takeda and J&J market MM proteasome inhibitor Velcade (bortezomib), which Takeda gained when it bought Millennium Pharmaceuticals Ltd.. With the same mechanism of action as Kyprolis and a 2017 patent expiry, Takeda likely needs a replacement. For now, it’s focused on developing its own oral MM proteasome inhibitor, MLN9708.

BMS and J&J also have bets on MM monoclonal antibodies, which are expected to bear fruit in the next few years. AbbVie and Bristol are partnered on Phase III elotuzumab, while Genmab and Janssen Biotech, a unit of J&J, have Phase I/II daratumumab. Daratumumab has Fast Track and Breakthrough Designations for fourth-line MM. These are likely to be used sequentially or in combination with Kyprolis, making Onyx a potentially good fit.

Speculation already has started about which biotech with potential oncology blockbuster companies could be next for a potential take-out. Mark Schoenebaum of ISI Group suggested Ariad Pharmaceuticals, Seattle Genetics and Medivation.

A long Onyx sale saga is likely just at the beginning of unfolding. While DOTW waits for the next shoe to drop, take a look at some actual deals in this week's edition of …

Pfizer/Bioventus: Pfizer will license worldwide rights to its bone morphogenic protein (BMP) portfolio to orthopedic biologics specialist Bioventus. In return, Pfizer will receive an upfront payment, milestones and royalties. Financial terms were not disclosed. The products include a BMP in development and an rhBMP-2 in unspecified indications. The rh-BMP-2 product appears to have entered Pfizer’s portfolio with its acquisition of Wyeth; Wyeth’s pipeline as of May 2009 described a BMP-2 program with indications in fracture repair and hip osteoporosis. Pfizer has agreed to undertake certain early development work for the BMP asset in soft-tissue indications and will manufacture the rhBMP-2 for Bioventus. Bioventus was spun out of U.K. device firm Smith & Nephew with funding from Essex Woodlands in 2012. The company recently has retained the services of BMP experts John Wozney and Howard Seeherman. It plans to soon open a research laboratory in Boston to develop and commercialize the BMP assets. With this deal, Pfizer continues to cull and prioritize its portfolio. The BMP agreement follows a spate of out-licensing in the wake of the Wyeth acquisition, including the CTLA-4 monoclonal antibody tremelimumab to AstraZeneca PLC and the irreversible TKI neratinib to newly formed Puma Biotechnology, both in October 2011. -- Mike Goodman

Merck/Xencor: Xencor already has a string of big pharma partners, but the small California-based biotech is hoping to get the financial flexibility to bring its own internal programs forward. Its latest deal brings the company one step closer to its goals.Xencor announced on July 2 that it has granted Merck a license to a Xencor Fc engineering patent for a monoclonal antibody for use in an undisclosed product that Merck is already working on. The New Jersey pharma also has an option to license the same intellectual property for future products. Merck paid an undisclosed upfront and agreed to pay annual maintenance fees, as well as milestone payments and sales royalties on any products that result. “Merck found an antibody that they needed that we had already patented,” said Xencor CEO Bassil Dahiyat. “They needed it for a use that we hadn’t thought of until they called us,” he added. The companies did not disclose what product the patent applies to or how it would be used. -- Lisa LaMotta

Avanir/OptiNose: CNS-focused Avanir Pharmaceuticals is licensing a proprietary intranasal delivery system from OptiNose for use in developing and commercializing a fast-acting, dry-powder inhaled form of sumatriptan for acute migraine. In the deal announced July 2, Avanir is paying $20 million upfront to license OptiNose’s Breath Powered delivery system; Avanir said it should be ready to file an NDA by early 2014 for AVP-825, the resulting drug/device combination product. The two companies will share development costs and work together on putting together the NDA submission. Avanir will assume responsibility for regulatory, manufacturing, supply-chain and commercialization activities for the product. OptiNose could earn up to $90 million in clinical, regulatory and commercial milestones related to ‘825, as well as tiered royalties on North American sales. Avanir says ‘825, if approved, would the first and only fast-acting, dry-powder inhalable version of sumatriptan for migraine. In a Phase III clinical trial, the OptiNose device demonstrated rapid absorption and provided relief using approximately 80% less drug than is contained in the most commonly prescribed oral sumatriptan product, the company added. -- Joseph Haas

Deals Of The Week Notes Bayer's Partnerships Are Paying Off

Bayer Healthcare’s pharmaceuticals division has certainly had its ups and downs, and some ultra-tense relationships with partners—notably the very public lawsuit Onyx Pharmaceuticals filed against it, which the partners settled in October 2011.

 

News announced in recent days however, puts Bayer in a very different position. The company's pharma business is flourishing, based on its partnerships--as well as the fortunate position it is in because it lacks any big drugs going off patent. Bayer's alliance with the Norwegian biotech Algeta ASA, now more than three years old, is at a turning point. On Feb. 13, FDA granted priority review for the investigational oncology drug radium-223 dichloride (formerly Alpharadin), for which Bayer and Algeta submitted an NDA (and an MAA in Europe) in December.

That drug would be indicated, initially, for chemotherapy-naïve castration-resistant prostate cancer patients with bone metastases. CRPC is one of the more crowded areas of oncology, but radium-223 demonstrates a survival benefit that other bone-targeted agents haven’t shown. 

Also kicking in are sales of Eylea, the drug for wet age-related macular degeneration that Bayer licensed from Regeneron in 2006, after Regeneron’s partner Sanofi decided not to pursue ophthalmology indications for the compound. (The oncology version of the drug is Zaltrap, which received approval in the US in August.)  Bayer has exclusive ex-US rights for all eye indications to the drug, which it launched late in 2012 in Australia and Japan, and which it is slowly rolling out across Europe as payers make reimbursement decisions. The partners have a 50-50 arrangement, both on sales and profits. 

For a variety of reasons, Eylea has been an immediate hit in the US, where Regeneron launched it in November 2011, and where it is the third most successful drug launch ever, according to Robert Terifay, SVP commercial, who briefed analysts on Eylea’s status on an earnings call on Feb. 14. Bayer believes the ex-US market presents a similar opportunity and is in the process of rolling out the drug globally. 

The German health care company reports full year 2012 financials on Feb. 28, but  Regeneron executives, without giving away much detail, said they’re pleased with Eylea’s ex-US performance so far. Eylea’s sales ex-US for the fourth quarter, its first on the market outside of the US, were $19 million. EU decisions on two additional indications, diabetes macular edema and central retinal venous ocolusion are also expected in 2013, Deutsch Bank analysts estimate these are smaller opportunities, each worth less than $500 million in Bayer's territories.

In addition, Bayer is in the midst of a global launch of the Factor Xa inhibitor Xarelto, which it developed internally, and which it licensed in 2005 to Johnson & Johnson to develop and sell in the US. The drug is currently approved in Europe for a range of indications, including venous thromboembolism prevention in orthopedic surgery and for stroke prevention following atrial fibrillation. It is pending approval in Europe for acute coronary syndrome, which analysts see as a long shot.  And FDA granted Bayer approval of Stivarga, an oral multi-kinase inhibitor, in September, for metastatic colorectal cancer. The drug is pending review in the EU.  

Many of the deals now bearing fruit were signed before the company’s current head of global business development and licensing, Nigel Sheail, joined it from Roche in November 2011 and certainly before he undertook a reorganization that consolidated business development functions across the healthcare subsidiary into one unit, with the aim of fostering a focus on integrated care across Bayer’s diverse health care subsidiaries. In an interview published in IN VIVO in September 2012, Sheail outlined where he sees health care heading and provided some insights into his business development priorities. His efforts have yet to prove themselves, but meanwhile Bayer has some solid launches to buttress the cash flow- and importantly, no patent cliff before it.  

Bayer’s overall stock is trading in the 90s, close to a 52-week high, partly because of the performance of its pharma division. Even though its chairman, Joerg Reinhardt, has left to become chairman of rival Novartis, and its former chief marketing officer, and global head of strategic planning, Flemming Ornskov, is settling in at Shire PLC, where he assumes the top spot in May, its near-to-mid-term future looks more secure than many of its peers.

Even as Bayer rushes to maximize the value of its deals, others are forging their own way. It's time for this week's edition of ....

Mylan/Biocon: Close to a year after Pfizer walked out of a deal with India’s Biocon for development and commercialization of a range of insulins, the Indian company has sprung back forming what it called an “exclusive strategic collaboration” with the world’s fourth-largest generic drug maker Mylan. Under the deal, the two companies will develop biosimilars of Sanofi’s Lantus (glargine), Eli Lilly’s Humalog (lispro) and Novo Nordisk’s Novolog (aspart), the three major insulin analogs. The combined global sales of the three brands reached $11.5 billion in 2012, making it a compelling business plan as regulatory pathways for biosimilars across nations gain further clarity. Lantus alone crossed sales of $6.6 billion last year. But the terms of the deal with Mylan differ substantially from the deal Biocon signed with Pfizer in 2010. Biocon didn't disclose financials, except to note that the deal includes an upfront and cost sharing, backed by a profit sharing arrangement, and no milestones; the Pfizer deal consisted of a $200 million upfront and $150 million in milestones. Unlike the Pfizer deal, the Mylan deal does not include recombinant human insulin, which Biocon is developing on its own. --Vikas Dandekar

Merck/Lycera: The two companies, which have been partnered since May 2011 on an oral interleukin-17 discovery deal, announced Feb. 12 that they have agreed to a second collaboration to discover and develop other treatments for autoimmune disorders. The new deal will focus on multiple targets that are known to play a role in autoimmune diseases, including psoriasis, rheumatoid arthritis, and multiple sclerosis. The companies would not identify the exact targets it will be focusing on under the collaboration. Merck will pay the Ann Arbor-based biotech an undisclosed upfront, as well as $300 million in milestones.  Merck and Lycera first began working together in the field of autoimmune disease in March 2011, when Merck paid $12 million upfront and agreed to $295 million in milestones in a similar discovery and development collaboration. Work under the original partnership is still in preclinical development; that initiative is focused on a specific target -- the retinoic acid related orphan receptor (RORyt), a transcription factor responsible for the differentiation of T-helper 17 (Th17) cells. Th17 cells produce interleukin-17 (IL-17), a pro-inflammatory cytokine that is understood to play a role in autoimmune diseases. Lycera received its first milestone payment from Merck under this collaboration, an undisclosed sum, in December 2011. – Lisa LaMotta

Lilly/Qiagen: Eli Lilly has broadened its relationship with diagnostic developer Qiagen NV by signing a “master collaboration” under which Qiagen will develop companion diagnostics for Lilly medicines across all of the pharma’s therapeutic areas. In what has become a hallmark of deal-making between pharmaceutical manufacturers and diagnostic firms, terms of the arrangement were not disclosed. Lilly and Qiagen are comfortable bed fellows. The two have been partnered on the development of single tests, including a September 2011 partnership to develop a test for Lilly’s clinical-stage Janus kinase 2 inhibitor. Last year, Lilly/Bristol-Myers Squibb Co.’s Erbitux secured approval in newly diagnosed KRAS wild-type metastatic colorectal cancer patients with Qiagen’s companion diagnostic kit for the drug. Work on those tests led to the expanded deal, Qiagen said, announcing the deal Feb. 13. The new partnership will all allow for efficiencies in future development programs by standardizing interfaces and processes between the organizations, the firm said.--Jessica Merrill

MorphoSys/Heptares: In a bid to develop more G-protein coupled receptor (GPCR)-targeted monoclonal antibodies, German drug discovery company MorphoSys is to use Heptares' stabilized GPCRs as targets to screen its Ylanthia monoclonal antibody library, in a deal announced Feb. 13. AstraZeneca, Takeda, and Cubist Pharmaceuticals have already licensed Heptares' technology to use in their drug discovery programs. GPCRs are the site of action of more than 25-30% of marketed small-molecule drugs, but they've never been a popular target for monoclonal antibodies. That's because the receptors are unstable when taken out of membranes and difficult to use as antigens to produce antibodies when injected into animals. The only marketed monoclonal antibody that interacts with a GPCR is Kyowa Hakko Kirin's Poteligeo, which is indicated for adult T-cell leukemia-lymphoma and which was launched in Japan in  May 2012. It binds to chemokine receptor 4 (CCR4). MorphoSys will propose GPCR targets, which will then be generated by U.K.-based Heptares and used to screen MorphoSys' Ylanthia monoclonal antibody library. MorphoSys will have the right to sublicense to pharmaceutical companies the identified targets and therapeutic antibody candidates, with Heptares receiving upfront and research funding payments, plus a share of those sublicense revenues. Heptares, which is building up its own pipeline, will also select a GPCR target of its own against which to screen MorphoSys's Ylanthia library. MorphoSys will receive license fees, milestones and sales royalties on any Ylanthia antibody developed by Heptares as a result of that work.--John Davis

RQx Pharmaceuticals/Genentech: Just weeks after buying the entire kinase-inhibitor discovery program at Afraxis, Genentech announced Feb. 12 it is collaborating with RQx Pharmaceuticals on a discovery and development tie-up to create novel antibiotics that kill Gram-negative bacteria while avoiding the multi-drug resistance plaguing many of today’s antibiotics. Including an undisclosed upfront payment and earn outs, the deal could total $111 million along with the potential for sales royalties on any product reaching market. The transaction eventually will create an exit for RQx’s primary backer, the hybrid venture capital firm Avalon Ventures, which provided seed funding and a majority of its Series A financing. This makes the third exit already this year for an Avalon portfolio company, following January deals in which BioMarin purchased Zacharon for $10 million plus potential earn-outs, as well as the Genentech/Afraxis agreement. RQx’s work derives from research conducted at the Scripps Research Institute in La Jolla, Calif., to unlock the secret of why an exploratory antibiotic, arylomycin, no longer was effective against bacteria, said RQx CEO Court Turner. Arylomycin, discovered by Eli Lilly in the early 1980s, was used as a chemical scaffold for RQx antibiotic candidates against a novel, undisclosed target, he said. “This is kind of a standard Avalon investment, where we see an old target that gets new completely new insights from a very reputable lab,” explained Turner, also a venture partner at Avalon. Arylomycin addresses signal peptidase, a target that big pharma had wanted to direct antibiotics against for years, but never developed any successful candidates. Turner would neither confirm nor deny that RQx’s work with Genentech will focus on the signal peptidase pathway.—Joseph Haas

Bristol-Myers Squibb/ Reckitt Benckiser: After announcing a change in strategy last year to intensity investment in higher-growth consumer and emerging markets, Reckitt Benckiser entered into a $438 million three-year agreement with Bristol-Myers Squibb to expand its consumer health foothold in Latin America. The deal, announced on Feb. 12, gives Reckitt marketing rights to seven BMS OTC brands for a period of three years. Reckitt will pay BMS a $438 million fee for the right to license the products, and an additional $44 million for an option to acquire them outright after the three-year period at a price to be determined by net sales during the preceding three years. The products included in the deal include Dermodex (nystatin) for diaper rash, Luftal (simeticone) anti-gas treatment and Naldecon (phenylephrine) cough/cold remedy, all sold primarily in Brazil. The products sold mainly in Mexico are Graneodin-B (benzocaine) sore throat remedy, Micostatin (nystatin) antifungal, Picot (sodium bicarbonate) antacid and Tempra (acetaminophen) analgesic. Combined, they brought in an estimated $102 million in 2012 sales, Reckitt said. Slough, U.K.-based Reckitt hopes the BMS brands create a foundation forhealth care product distribution and growth in Brazil and Mexico, where the firm’s business currently is weighted toward household cleaners and other home care products. For BMS, the deal represents its latest move away from non-core consumer businesses to refocus energy and resources on biopharmaceuticals. In 2009, it spun off pediatric nutritionals maker Mead Johnson in an initial public offering and sold its Asian OTC assets to Taisho. --Michael Goodman

GSK/ Vanderbilt University – GlaxoSmithKline is expanding its Discovery Partnerships with Academia program, which itlaunched in 2011, in a new deal with Tennessee-based Vanderbilt University. The collaboration will focus on the discovery and development of treatments for severe obesity. The team will target the melanocortin-4 (MC4) receptor, which plays a role in energy homeostasis. Vanderbilt will be responsible for pre-clinical activities, while the pharma will handle development. The collaboration is expected to bring a compound into the clinic by 2016. Vanderbilt scientists have developed positive allosteric modulators that increase activity to the MC4 receptor. It’s believed that activity at this receptor plays a role in early-onset obesity. GSK and Vanderbilt are hoping to develop a compound that will not raise a patient’s blood pressure like some of the other recently developed therapies for obesity. GSK will provide research funding under the three-year collaboration, as well as undisclosed milestones and royalties on any products that are commercialized. - LL

AstraZeneca/ N.N. Petrov Institute of Oncology: AstraZeneca has signed a research collaboration with one of Russia's leading cancer research institutions, the Petrov Institute, to identify genetic mutations in cancer patients. The deal, announced Feb. 12, will pave the way for scientists from both organizations to identify specific types of cancer tumors that have potential drug-sensitizing gene mutations; specifics were not disclosed. AZ will be able to analyze data generated by the Institute's archive of tumor samples, which is one of the largest in Europe, with more than one million samples from over 270,000 patients.  The Institute scientist who will direct the collaboration with AZ helped establish EGFR testing of AZ's Iressa patients in Russia and Eastern Europe. The deal also bolsters AZ's efforts to help the Russian government build a local world-class innovative biopharma industry. --WD 

image by flickr user sam_goody500 // creative commons

Deals of the Week Takes Time to Travel

Like any conscientious time traveller, a biopharma needs to tread carefully around iterations of its current, past and future deal-making self. (Spoiler alert!) In the new sci-fi flick Looper, the younger version of Bruce Willis does a terrible job cultivating his present while tending to his future and reconciling himself to his past. But this week Celgene proved a bit more adept than the action hero at tending to its past and future self. The biotech bellwether disclosed a pair of early stage deals, while putting out positive data that helps justify its largest acquisition to date.

The biotech added two cancer deals, one to develop a Phase I immunotherapy with VentiRx and the other a research partnership with the Leukemia & Lymphoma Society (LLS). Celgene has now disclosed six partnerships this year, the most since 2007 when it inked 10.

Celgene will pay VentiRx $35 million upfront to develop Toll-like receptor 8 (TLR8) agonist, VTX-2337, in cancer indications. The two companies will advance the compound in a pair of Phase II trials in ovarian and head-and-neck cancer over the next few years under an exclusive, worldwide partnership. Celgene also gains an option to purchase the company. VentiRx is eligible to receive additional funding during the option period, including a potential equity investment by Celgene.

In-licensed from Array BioPharma in 2007, ‘2337 is an immunotherapy that directly activates human myeloid dendritic cells, monocytes and natural killer cells to produce high levels of mediators which orchestrate the integration of a patient’s innate and adaptive anti-tumor responses, according to VentiRx.

Celgene included a similar option to purchase in its deal late last year with genomics start-up Quanticel, which got $45 million upfront and sold an undisclosed amount of equity to Celgene. The biopharma gained exclusive third-party rights to Quanticel's platform, which conducts single-cell genomic analysis of tumor samples.

Likely even more long range than the VentiRx deal, the LLS partnership seeks to identify and fund blood cancer research projects. The idea is to use the patient advocacy group’s connections with academic research centers to advance the scientific and medical understanding of hematological malignancies. The partners will also work with biotech companies to help develop of novel treatments for blood cancer.

Defining its present and past, Celgene also helped make the case this week for its $2.9 billion acquisition of Abraxis BioScience, which was met with skepticism when announced in 2010, with the disclosure of positive Phase III data for Abraxane in melanoma. The company’s share price climbed nearly to $80 on the news. That’s close to its 52-week high, but Celgene still hasn’t broken out of the roughly $50-$80 range it’s been in for about six years.

Now that Abraxane has hit some milestones and has a slew of upcoming catalysts Celgene may not wish it could go back in time to undo the deal, although there were plenty of investors who wished it could do so in the deal’s aftermath.

Abraxane (paclitaxel protein-bound particles for intravenous suspension) has an Oct. 12 PDUFA date for the treatment of non-small cell lung cancer (NSCLC). An approval in NSCLS would be the first new indication for the drug since Celgene acquired Abraxis. At the time, Abraxane was already approved as a second-line treatment for metastatic breast cancer.

If it can successfully add NSCLC, along with melanoma and pancreatic cancers, Celgene is expected to build Abraxane into its next blockbuster franchise. Just modelling sales for second-line breast cancer and NSCLC, Jefferies analyst Thomas Wei expects Abraxane could hit more than $1 billion in sales by 2016 or 2017.

Still, Abraxane may be little help when it comes to Celgene’s long-term patent issues. The drug comes off patent in the U.S. next year, but newly approved indications would have five to seven years of protection, said ISI Group’s Mark Schoenebaum in a note this week. He expects Abraxane IP to hold up through 2020 in the U.S. Revlimid (lenalidomide) starts losing IP protection as early as 2019; it accounted for two-thirds of Celgene’s $4.7 billion in net product sales last year.

But as sci-fi aficionados know, when time travel is involved current and future selves often end up at odds, if not at outright war. Celgene needs to hit a lot of milestones including next week’s Abraxane PDUFA date and Phase III pancreatic data for the drug this quarter.

Celgene isn’t the only one working to get a glimpse of a rosier future. See who else is partnering up to do so in this week’s installment of . . .

Sanofi/Genfar: Sanofi chief executive Chris Viehbacher seems as good as his word when it comes acquisitions. Three weeks after identifying Colombia as an attractive emerging market to be in, he bagged the country’s second-biggest generics maker, Genfar. While in China last month at the World Economic Forum, Viehbacher identified Colombia, Vietnam and Indonesia as emerging markets that look attractive in terms of growth. On Oct. 2 Sanofi announced it was buying Genfar, which had total sales last year of $133 million, some 30% of that from outside Columbia. The purchase builds on Sanofi’s previous forays into Latin America comprising the $662 million purchase of Medley Pharmaceuticals, the big Brazilian generics maker, in April 2009, just days after the French company bought Mexico's Kendrick Farmaceutica. Genfar does business in Venezuela, Peru, Ecuador and 10 other countries. No financial terms were announced. Viehbacher has been diversifying the group since he took control in 2008 by acquiring small or mid-sized companies in areas including vaccines, over-the counter drugs and generics, especially in fast-growing emerging markets, such as Eastern Europe, Latin America and Asia. So, does the Genfar purchase mean Viehbacher – who has said Sanofi is open to “bolt-on” transactions of as much as €2 billion ($2.6 billion) this year – will soon announce deals in Vietnam and Indonesia? It would seem a safe bet. – Sten Stovall

Janssen/Astellas: J&J-owned Janssen Biotech beefed up its autoimmune pipeline by acquiring rights to Phase II Janus kinase inhibitor ASP015K from Astellas Pharma. Horsham, PA-based Janssen paid $65 million up-front in the Oct. 1 deal, which also includes development, regulatory and commercial milestones that could add $880 million to its value. Janssen would also pay double-digit royalties if the drug is commercialized. The deal covers the entire world except for Japan, where Astellas retains rights. Astellas has already conducted a Phase IIa study of the drug in moderate-to-severe plaque psoriasis patients, and will complete three Phase IIb trials already underway in rheumatoid arthritis. Janssen will assume all further development costs outside Japan after those studies are completed. The drug could be an eventual successor to Janssen’s top-selling Remicade (infliximab) and Simponi (golimumab), both of which are approved in RA, psoriatic arthritis and ankylosing spondylitis. No JAK inhibitor has yet been approved for rheumatoid arthritis, but FDA is soon expected to rule on Pfizer’s tofacitinib, with a PDUFA date of Nov. 21. – Paul Bonanos

Takeda/LigoCyte: The Japanese pharma is making good on its commitment to make vaccines a priority. Takeda will acquire vaccine play LigoCyte for an upfront payment of $60 million, with additional undisclosed contingent development payments. Late last year, Takeda announced the establishment of a Vaccine Business Division. To run the new division, Takeda hired the former director of vaccine delivery in the Global Health Program at the Bill & Melinda Gates Foundation, Rajeev Venkayya. Prior to the Gates Foundation, Venkayya was the special assistant to the President for Biodefense at the White House. With the Ligocyte acquisition, Takeda will gain a Phase I/II vaccine to prevent norovirus gastroenteritis, the only norovirus vaccine in clinical trials, according to the company. Novovirus is the most common cause of gastroenteritis and food-borne illness in the U.S. and the cause of about 200,000 deaths annually, mostly in developing countries. The norovirus vaccine uses LigoCytes proprietary vaccine-like particle (VLP) technology. Takeda will also gain LigoCyte’s preclinical vaccines against respiratory syncytial virus, influenza and rotavirus. LigoCyte management will join Takeda’ Vaccine Business Division and continue to operate in Bozeman, Montana. - Stacy Lawrence 

Evotec/Bayer: Two European pharmas forged a multi-target alliance to develop clinical candidates to treat endometriosis. Bayer Pharma paid €12 million ($15.5 million) up-front to enter a five-year collaboration with Hamburg-based Evotec, with a goal of discovering up to three clinical candidates and jointly bringing them through preclinical research. Bayer will assume development costs related to the drugs upon their entry into the clinic, and could owe Evotec up to €580 million in preclinical, regulatory, clinical and commercial milestone payments, plus low-double-digit sales royalties, if the drugs advance and are commercialized. Bayer already markets Visanne (dienogest), a once-daily oral tablet that treats pain and lesions associated with the disorder, as well as a variety of other women’s health products including contraceptives. Endometriosis, which most frequently afflicts women between 25 and 35, is said to affect 176 million women worldwide, including about 10 percent of women of reproductive age. – P.B.

Servier/Ethical Oncology Science: French drug maker Servier is again moving to bolster its oncology pipeline through a deal with the Italian biopharma Ethical Oncology Science, its second in-licensing deal in as many weeks. In the latest agreement, Servier has acquired rights to an early clinical-stage antitumor drug targeting Fibroblast Growth Factor Receptor 1 and Vascular Endothelial Growth Factor Receptor 1-3, the company announced Oct. 1. In exchange Servier will pay €45 million ($57.5 million) upfront for rights outside the U.S., Japan and China. In those territories, EOS will retain rights. EOS also stands to receive clinical and registration milestones as well as royalties. The focus of the development of the drug will be mainly on breast cancer, where it has demonstrated promising results in early human trials, according to the company. In an earlier deal, announced Sept. 20, Servier partnered with MacroGenics Inc. for an option to develop and commercialize Dual-Affinity Re-Targeting (DART) products from its bi-specific antibody platform directed at three undisclosed tumor targets. Servier paid $20 million upfront for an option to obtain licensing rights in markets outside the U.S., Canada, Mexico, Japan, Korea and India. - Jessica Merrill

Leo Pharma/Charité: The Charité, which started out in the 1700s as a plague hospital for the poor but now incorporates Berlin's university hospitals, one of the largest medical organizations in Europe, is to collaborate with Denmark's mid-sized company, Leo Pharma, to discover and develop new treatment options for patients with skin conditions like psoriasis and actinic keratosis. It’s a bold step for Leo Pharma, which has previously not been particularly active in forging scientific collaborations, and can be viewed as the next move in the company's quest to search for future growth opportunities. The partners will test treatment solutions that no one has explored before, and identify new therapeutic areas within dermatology for Leo Pharma, the company announced Oct. 3. The collaboration is billed as the first of five long-term research relationships that Leo Pharma wants to set up with external partners in four countries – the U.S., Germany, France and Australia - by the end of next year. The research will supplement Leo Pharma's own internal R&D activities.- John Davis

Theravance/Alfa Wassermann: Mid-sized Italian company Alfa Wassermann is continuing to focus its research on all things gastrointestinal by collaborating with San Francisco-based Theravance on the development of that company's Phase II 5HT4-agonist, velusetrag (TD-5108), in gastroparesis. There are few therapeutic options for the disorder, which is characterized by delayed gastric emptying leading to bloating, nausea and vomiting. Velusetrag has already shown significant prokinetic activity after once-daily dosing in 400 patients with chronic idiopathic constipation. Under the agreement, Alfa Wassermann will fund the velusetrag research program in gastroparesis until the end of Phase II, and at that point will have an exclusive option to license the product for further development and commercialization in the EU, Russia, China, Mexico and certain other countries. Theravance will retain full rights to velusetrag for the U.S., Canada, Japan, and certain additional countries. If Alfa Wassermann exercises the option, Theravance will receive a $10 million fee and could receive further development, regulatory and sales milestone payments totalling up to $53.5 million, the two companies announced Oct. 2. Theravance could also receive royalties on net sales ranging from the low teens to 20%. Alfa Wassermann, a private Bologna-based company with revenue of €335 million ($434 million) in 2011, is best known for its gut-selective antibiotic, Xifaxan (rifaximin), which is marketed in more than 30 countries. It also markets a low molecular heparin, Fluxum (parnaparin), and a heparinoid, Vessel (sulodexide), and has ambitions to extend its direct presence in the EU and emerging markets. Theravance markets the injectable antibiotic, Vibativ (telavancin) in the U.S., and is collaborating with GlaxoSmithKline on the development of a combination COPD product which has completed Phase III clinical studies.- J.D.

BioSante/ANI Pharmaceuticals: In perhaps a last-ditch effort to derive value from development-challenged, female sexual-dysfunction drug LibiGel (transdermal testosterone gel), BioSante is undertaking a reverse-merger with specialty branded and generic pharmaceutical company ANI Pharmaceuticals. Each company’s board of directors has approved the proposed all-stock transaction in which ANI shareholders would end up owning 53% of the combined company and BioSante shareholders the remaining 47%. The deal, announced Oct. 4, also includes a contingent value right tied to the potential sale, transfer or licensing of LibiGel that could yield up to $40 million for existing BioSante shareholders. After Phase III trial data were clouded by a higher-than-expected placebo response, BioSante was left to design new pivotal studies for LibiGel, intended to address female hypoactive sexual disorder, that would ameliorate the placebo effect. In July 2011, the Illinois-based firm raised $45.1 million in a follow-on public offering, selling 16 million shares at $3 per share to fund continued development of LibiGel. The new company will be called ANI Pharmaceuticals, Inc., with existing ANI President and CEO Arthur Przybyl at the helm. Przybyl also will hold a seat on the board of directors, along with four current ANI directors and two from BioSante. The new company will seek to out-license LibiGel and put BioSante’s cash toward ANI’s niche branded and generic drug business, which generated net sales of $16 million in 2011. BioSante also brings a pipeline of cancer vaccines being investigated in 17 Phase I and Phase II trials to the new entity, while ANI has a contract manufacturing organization. - Joseph Haas

Flashing back to 5AM? Trippy alarm photo courtesy of loopoboy 2.0.