Deals Of The Week: UCSF Catalyzes R&D Tech-Transfer Deals With Private Sector

Neither MedImmune, the biologics arm of AstraZeneca, nor the University of California, San Francisco, is a stranger to R&D collaboration between private industry and academia, but the agreement they signed on Feb. 11 is somewhat unique in that it will take advantage of a UCSF program that was intended to provide external expertise that might help to move basic research into more advanced stages.

At UCSF’s Clinical and Translational Science Institute, the Catalyst Awards program benefits from the input of industry and academic advisors who review burgeoning science and help select which projects should advance further and be given increased resources. CTSI oversees UCSF researchers working on therapeutics, devices, diagnostics and digital health applications, explained June Lee, director of early translational research at CTSI.

The Catalyst program started with about 120 advisors, and now has about 140 and is growing in numbers. “These folks are from all different disciplines, mostly from industry, and represent various different sectors and areas of expertise for product development in the life sciences,” Lee said. According to her, it’s more of a happy coincidence than a plan that the Catalyst Awards program spurred a broad-based partnership – considering both small- and large-molecule projects in cardiovascular and metabolic disease, oncology, respiratory, inflammation and autoimmune disorders, neuroscience and infectious disease – with MedImmune.

The collaboration could end up bringing early-stage assets to MedImmune (or AstraZeneca) in any of those areas, Lee added, since UCSF has 2,400 faculty, of whom about 1,300 are doing research primarily. “Our people are working in all areas of research, and that’s not accounting for post-docs or graduate students,” she said.

“Our primary goal was to enable and support of early-stage technology projects at UCSF,” she said. “For things that have product potential, we bring in the necessary expertise to help the faculty move projects along. Even though spurring deal-making may not have been our primary purpose, the program really is a very appropriate portal for people on the outside to look through to determine which university technologies are most ready to be licensed out.”

Terms have not been disclosed for the MedImmune/UCSF tie-up but Senior VP and Head of the Respiratory, Inflammation and Autoimmune Innovative Medicines Unit (iMED) Bing Yao said that unlike the Johns Hopkins and University of Maryland, Baltimore arrangements signed last year, which feature an overall R&D funding allocation, funding for this partnership will be determined on a case-by-case basis.

“Some of the programs, we will want to bring to the next stage – they could be preclinical or [we could want to move them] further into clinical development,” Yao noted. “This way, we can give a lot of input. As a company developing products for multiple therapeutic areas, we can bring our expertise to facilitate [the projects] but each program will be unique.”

The agreement extends for three years, with an option to extend it. MedImmune and AstraZeneca personnel will join with the Catalyst Awards advisors and UCSF staff to determine which products move forward with MedImmune/AstraZeneca backing. And the company will have exclusive options rights to the programs it backs, Yao said.

In the six months, Gaithersburg, Md.-based MedImmune has shored up its local base by signing a five-year, $6.5 million, broad-based R&D partnership with Johns Hopkins University in December and a five-year, $6 million pact with University of Maryland, Baltimore in September. It also has R&D relationships with academia in the U.K. and, now, with the UCSF partnership, gets better access to technological advances stemming from the biotechnology hub in the San Francisco bay area, Yao told Deals of the Week.

UCSF, meanwhile, is one of five founding members of the Academic Drug Discovery Consortium, founded in 2012 to serve as a clearinghouse for both academia and industry on research underway within U.S. and international drug research programs. Since 2010, UCSF has negotiated research collaborations with Genentech, Pfizer, Sanofi and Bayer, while licensing a preclinical antibody for organ failure to Stromedix and genetic encoding intellectual property for Parkinson’s disease to uniQure.

While that agreement was signed, other M&A and licensing activity was heating up the cold and snowy winter. Read on for the rest of ....

Mallinckrodt/Cadence: Mallinckrodt will have a lot of work to do to make good on the $1.3 billion it’s paying for Cadence Pharmaceuticals, a price more than 10 times the projected 2013 sales for Cadence’s sole product, Ofirmev (intravenous acetaminophen). Mallinckrodt says the acquisition gives it a third therapeutics platform, in the hospital setting, in addition to its existing focus on generic drugs and pain medications. The specialty drug company plans to keep Cadence’s sales and marketing capabilities and acquire additional hospital products to sell through them. Mallinckrodt announced the acquisition Feb. 11, its first major transaction since it was spun-out from medical device and supply company Covidien in July. Ofirmev launched in January 2011 and is approved to treat mild-to-moderate pain, for the management of moderate-to-severe pain with adjunctive opioid analgesics, and for the reduction of fever. It has expected net product revenues of $110.5 million for 2013. That’s more than twice the $50.1 million posted in 2012, its first full year of sales. As of Sept. 30, Cadence shareholders included Fidelity Management (7.6 million shares), T. Rowe Price Associates (7.2 million), Capital Research (7.1 million), Wellington Management (6 million), The Vanguard Group (3.4 million), NEA (2.1 million) and BlackRock (1.9 million). Mallinckrodt will pay $14 per share for Cadence, a 32% premium to the trailing 30-trading-day volume weighted average price; in 2006, the company completed an IPO at $9 per share with a valuation of about $250 million. That gives shareholders who bought and held IPO shares a roughly 1.5x return. - Stacy Lawrence and Jessica Merrill

Pierre Fabre/Aurigene: Pierre Fabre Group, the French pharmaceuticals and cosmetics firm whose sales are split almost equally between drugs and skincare cosmetics, has acquired worldwide development and commercialization rights (excluding India) to a novel immune checkpoint modulator, AUNP-12, from the Indian drug-discovery firm Aurigene Discovery Technologies. AUNP-12 is the only peptide under development as a PD-1 immune modulator, the companies say. The candidate could be associated with greater efficacy and fewer side effects when used as part of combination therapies, they announced Feb. 12. The peptide achieves effective levels in vivo after subcutaneous dosing, and has inhibited tumor growth and metastasis in preclinical models of cancer. Aurigene, the Bangalore-based biotech that has collaborated with six of the top 10 pharmaceutical companies since its inception in 2002, will receive an undisclosed upfront payment from Pierre Fabre, and milestone payments based on development, regulatory and commercial progress. The deal terms are in line with others in this space, the companies said. It’s also the first major deal the French company has signed since the death of its founder, Pierre Fabre, in the middle of last year. Pierre Fabre specializes in the development of anti-cancer drugs, either alone or with partners; with marketed drugs that include Javlor (vinflunine) and Navelbine (vinorelbine), while Aurigene is a profitable Indian biotech that generates lead compounds and progresses them to preclinical development in concert with collaborators, particularly in oncology and inflammation. - John Davis

Retrophin/Manchester: Retrophin, which netted $37.4 million in an initial public offering in January, has arranged to purchase privately held Manchester Pharmaceuticals for $62.5 million, including $29.5 million upfront. Announced Feb. 12, the transaction is expected to close on March 1, Retrophin said. Like Retrophin, Manchester focuses on rare diseases. The Ft. Collins, Colo.-based firm has two FDA-approved drugs in its portfolio – Chenodal (chenodeoxycholic acid), which is indicated for patients suffering from gallstones in whom surgery poses an unacceptable health risk due to disease or advanced age, and Vecamyl (mecamylamine HCI tablets), indicated for the management of moderately severe to severe essential hypertension and uncomplicated cases of malignant hypertension. Retrophin said it also will seek quick FDA approval for Chenodal, the only FDA-approved chenodeoxycholic acid, for cerebrotendinous xanthomatosis (CTX), a rare metabolic disorder that can cause severe intellectual disability or even prove fatal in young patients. The New York firm also guided that it anticipates revenue of between $10 million and $12 million this year overall, and $19 million to $21 million in 2015. - Joseph Haas

Debiopharm/Affinium: Swiss biopharma Debiopharm Group broadened its antibiotic portfolio by acquiring key assets from Toronto-based Affinium Pharmaceuticals on Feb. 11. The deal includes two narrow-spectrum anti-bacterial candidates, the Phase IIa FabI inhibitor AFN-1252 and its Phase I prodrug, AFN-1720. Debiopharm also acquired Affinium’s technology platform with which it created the two drugs. Terms of the arrangement weren’t disclosed. Affinium says its drugs represent a new class of antibiotics that inhibit the type-II fatty acid synthesis pathway, known as FAS-II, essential for bacterial growth. Its compounds have shown promise in combating staphylococcus infections, including methicillin-resistant Staphylococcus aureus and vancomycin-intermedia Staphylococcus aureus infections, while allowing intravenous-to-oral switching for patients leaving hospital care. Debiopharm expects to develop a companion diagnostic to select appropriate patients as AFN-1720 progresses through the clinic. Debiopharm entered the anti-bacterial field last fall, when it struck a deal with India’s TCG Life Sciences to develop new antibiotics. The company is aiming to develop drugs that preserve existing gut flora while overcoming resistance to broad-spectrum drugs. Affinium raised $33 million in two rounds of funding in 2007 and 2011, from investors including SV Life Sciences, Genesys Capital Partners, Forward Ventures, Oxford Bioscience Partners and Ontario Emerging Technologies Fund.  - Paul Bonanos

Aveo/Astellas: In our “No-Deal of the Week,” Aveo Pharmaceuticals and Astellas announced Feb. 14 that they have terminated a partnership around renal cell carcinoma candidate tivozanib. The Japanese pharma paid $125 million upfront, with $50 million pegged to cover Aveo’s R&D expenses, in 2011 for worldwide rights, except for Asia, to develop, manufacture and market the compound, a tyrosine kinase inhibitor of all vascular endothelial growth factor receptors. An NDA was filed in November 2012, but an FDA “complete response” letter and unenthusiastic reception at an advisory committee left the companies not expecting approval in advanced RCC. They terminated the trial program for that indication and decided to re-focus on developing tivozanib for breast and colorectal cancers. Now, Astellas has decided to exit the collaboration for what it calls “strategic” reasons, and the two companies are terminating a Phase II program studying the compound in CRC. All rights to tivozanib will return to Aveo as of Aug. 11. - J.A.H.

Photo credit: Wikimedia Commons

Deals Of The Week: Academic Drug-Discovery Alliance Capturing Industry's Notice

Nashville hosted the first annual conference of the Academic Drug Discovery Consortium

It’s become a familiar story in biopharma, as Big Pharma X announces that in the wake of the patent cliff, health care-spending pressures in Europe and diminished returns from internal R&D, it will be forced to cut back on R&D spending and make staff reductions primarily in sales and lab positions.

As the industry retrenches on early drug-discovery work, however, the need for innovation has not diminished and so the private sector frequently looks more and more to the academy for early research breakthroughs that might translate into therapies that will bolster the quarterly earnings reports a decade from now. In an effort to take advantage of that trend, some of the more forward-thinking university-based drug-discovery outfits in the U.S. have banded together to create a consortium they hope will facilitate and ease partnerships between academic institutions and the biopharmaceutical industry.

The brainchild of a meeting in Baltimore two autumns ago, the Academic Drug Discovery Consortium was more or less dreamed up by Barbara Slusher, director of the Translational Program at the Brain Science Institute at Johns Hopkins University, and Jeffrey Conn, director of the Vanderbilt Center for Neuroscience Drug Discovery, with input from three other founding institutions: University of North Carolina, Harvard University and University of California, San Francisco.

But in a relatively short time, ADDC’s membership has grown to 83 institutions, including six outside the U.S., and more than 550 individual members. And, just as importantly, big pharma has taken notice.

“They started out with two groups, Vanderbilt and Johns Hopkins, and now they have 83 members,” said Bruce Harris, Roche’s director of academic alliances and an attendee and speaker at ADDC’s first annual conference Oct. 9-11 in Nashville.” All of these institutions are trying to incorporate drug discovery and translate some of the biological discoveries occurring in their laboratories into drug-discovery projects and, if you think about it, that’s an incredible resource for the industry and the early portion of our pipelines.”

It is a necessary development as well. “The area I work in, CNS, probably has been hit the hardest because it’s a risk area where companies are decreasing their internal efforts and several companies have just gotten out (altogether),” said Slusher, co-founder and president of ADDC.

She and Harris both point to an increased government funding interest in translational research that has occurred more or less in tandem with private industry’s cutbacks in discovery work. Specifically, they site the NIH Roadmap efforts undertaken during the tenure of former NIH Director Elias Zerhouni. “This has been a major change in the pharmaceutical industry,” Slusher said. “But as pharma has been decreasing some of its internal efforts, simultaneously what you see is NIH increasing its interest in activities in discovery and translation.”

While overall NIH funding has been roughly flat in recent years, she noted, funding for its National Center for Advancing Translational Science (NCATS) was increased by 11% for federal fiscal year 2013.

ADDC also reflects the exponential growth taking place in academic drug discovery. There were six U.S. academic institutions performing drug-discovery research in 1990, a number that had nearly tripled as of a decade ago. Now, there are more than 100 such units, and 78 of them have membership in ADDC, Slusher pointed out.

In addition to its domestic members, ADDC also has drawn the support of six international research outfits – the Centre of Applied Medical Research at the University of Navarra in Spain, the Karolinska Institute’s Chemical Biology Consortium Sweden, the genetic engineering and biotechnology labs at Shaqra University in Saudi Arabia, the Platform of Chemical Biology and ADME at the University of Strasbourg in France, the Spanish National Cancer Research Centre and Cancer Research UK.

While ADDC has a focus on facilitating partnerships with the private sector, Harris thinks another important role it can play is fostering research efforts across national borders. “I could easily see these U.S.-based academic institutions collaborating on drug-discovery work with their European colleagues,” he said. “Science is global and so are economies, so for them to work together without national boundaries is just natural.”

As Roche searches for programs and assets to invest in at the academic level, Harris said his emphasis will be on the company’s therapeutic areas of focus – oncology, neuroscience and infectious disease. Those priorities dovetail well with what is occurring in U.S. academic research – of the ADDC centers, 73% say they work in oncology, 65% in infectious disease, 63% in neurological disorders and 45% in immunology.

One of ADDC’s initial goals is to create a searchable database of the projects being undertaken by member institutions. Both institutional and individual membership in ADDC is free, meaning this should be a significant resource for academic alliance seekers, like Roche’s Harris. (The organization also is not planning to take a cut from members’ tech transfer deals as a funding mechanism. Instead, it has lined up more than 20 biopharma and service provider firms to sponsor ADDC activities so far, Slusher said.)

Meanwhile, ADDC has no plans, in the near term at least, to serve as a central negotiating point for tech transfer deals or to develop uniform documents and practices for such transactions. Harris said right now that activity seems neither necessary nor terribly feasible.

“I’m not sure that it would be useful to standardize all of the legal documents and arrangements because each university has its own mission within a given state or [based upon] who is supporting it,” Harris added. “They have to go by their own regulations, so having a common set of documents across multiple tech transfer offices at U.S. universities would be a monumental challenge, I think, and probably expensive from a legal point of view.”

And while we await a slew of deals between ADDC member institutions and the biopharma industry, we present this week’s roundup of ....

MedImmune/Spirogen/ADC Therapeutics: AstraZeneca’s biologics unit MedImmune will expand its early oncology pipeline with a new platform to make potent antibody-drug conjugates through the acquisition of U.K.-based Spirogen. Britain’s second-biggest drug maker said it was acquiring privately held Spirogen Oct. 15, paying up $200 million upfront and with another $240 million in potential earn-outs based on predefined milestones for Spirogen’s ADC technology, which has the potential to directly target cancer tumors while protecting healthy cells. Spirogen has developed a novel class of cytotoxic “warheads” based on pyrrolobenzodiazepine (PBDs), which are DNA minor-grove binding agents that bind to specific sites of DNA in cancer cells, according to MedImmune. This blocks the cell division and growth without distorting the DNA helix of cancer cells, which potentially could prevent the emergence of drug resistance. AstraZeneca is in the midst of a concerted push in oncology under the direction of CEO Pascal Soriot, who has revamped the company’s R&D direction over the past year and selected oncology as one of three focal therapeutic areas for the company. MedImmune now is focused on two key areas in oncology development – ADCs and immune-mediated cancer therapy – and says the acquisition of Spirogen fits that strategy perfectly. In connection with the deal, AstraZeneca simultaneously announced a coinciding agreement with Swiss-based ADC Therapeutics, which has a licensing agreement with Spirogen. Under that arrangement AstraZeneca will pay $20 million to take an equity investment in the company. The investment will be matched by Auven Therapeutics, the majority shareholder in both ADC Therapeutics and Spirogen. AstraZeneca will collaborate with ADC Therapeutics to develop two programs from a defined list and pay an undisclosed upfront payment and development milestones. ADC Therapeutics will have a profit-sharing arrangement and gets the option to co-promote one of the products in the U.S. The products to be developed using Spirogen’s technology are preclinical assets, so the latest deal will not yield commercially viable new medicines for several years. It is not yet clear when the products could move forward into clinical tests. Spirogen has been developing its PBD technology for more than 10 years, including a standalone PBD agent in a Phase II study in acute myeloid leukemia. Its business model has been to partner its technology with pharma and biotech for use in the development of novel drugs. It has a number of industry collaborations, including collaborations with Genmab in June 2013, Genentech in 2011 and with ADC Therapeutics announced in 2012. - Sten Stovall

AstraZeneca/Taris Biomedical: Bladder-disease focused Taris Biomedical signed a research agreement with AstraZeneca Oct. 16 to work on novel treatments for bladder cancer. No financial details were disclosed, but the pharma gets an option to license any products resulting from the collaboration. The partnership will involve using Taris’ proprietary delivery platform in combination with targeted bladder cancer drugs developed by AstraZeneca. The Lexington, Mass.-based biotech says its technology involves a soft and flexible device that is deployed into and retrieved from the patient’s bladder “using standard urological office procedures.” The technology is designed to provide continuous local delivery of a therapeutic agent to the bladder for days or weeks. “Their novel technology has the potential to enable the delivery of the right drugs to the tumor tissue in the right concentration and over a prolonged period,” said Susan Galbraith, head of AstraZeneca’s Oncology Innovative Medicines Unit in a release. “This could combine the ability to target the right tissue – the tumor – with the right genetically targeted therapy and therefore represent a step change in the treatment of this disease.” Taris is a clinical-stage firm focused on developing therapies for bladder cancer, overactive bladder and interstitial cystitis. Its lead candidate, LiRIS, is in Phase II in interstitial cystitis. In April, the biotech raised $12.5 million in a Series C round funded by returning investors Flagship Ventures, Flybridge Capital Partners, Polaris Partners and Third Rock Ventures. - Joseph Haas

AmpliPhi Biosciences/University of Leicester: U.S. company AmpliPhi BioSciences announced an agreement Oct. 17 with a British academic group that has succeeded in identifying and characterizing bacteriophage (“phage”) that kill pathogenic strains of Clostridium difficile, a major cause of hospital-acquired severe diarrhea and vomiting. The University of Leicester  researchers will collaborate with AmpliPhi and another U.K. research team at the University of Glasgow on using the “bacteria-eating viruses” for clinical applications, with AmpliPhi funding the research, making milestone payments and paying royalties on any eventual products sales. In return, AmpliPhi receives rights to patents and intellectual property covering the Clostridium difficile-targeted phage research.
In a September 2013 report, the Centers for Disease Control & Prevention called C difficile an urgent threat, causing 250,000 infections every year in the U.S. AmpliPhi believes it is conducting the only phage-based development program for this critical condition. Phage could yield ideal candidates for treating gastrointestinal infections, as they infect and kill a specific strain or species of bacteria, and should not affect beneficial gut bacteria. The research agreement is the third by AmpliPhi in the past six months, having linked up previously with the synthetic biology company Intrexon and the U.S Army. AmpliPhi expects its first therapeutic phage-based product, targeting Staphylococcus aureus and developed in collaboration with the U.S. military, to enter clinical trials next year. AmpliPhi is headquartered in Richmond, Va., but has operations in Colworth, U.K., and Sydney, Australia. - John Davis

Zydus Cadila/Pieris: India’s Zydus Cadila is teaming with Germany’s Pieris to develop and commercialize multiple novel protein therapeutics derived from the anticalin protein molecule. In an Oct. 16 announcement, the companies said the partnership would combine Pieris capabilities in drug discovery and early drug development with Zydus’ expertise in regulatory affairs and development and manufacturing of biologics. No financial terms were disclosed, but the companies said in a release that they will share licensing revenues under mutually agreed-upon terms. The collaboration is intended to develop candidates to proof-of-concept and then seek out-licensing in Pieris’ commercial territories. The most advanced program under the partnership is PRS-110, an anticalin protein specific for c-MET, a target that has been validated in a broad spectrum of tumor types. The candidate is a pure antagonist due to monovalent target engagement and in animal models has demonstrated the ability to inhibit ligand-dependent and –independent c-MET activity. - J.A.H.

Photo credit: Wikimedia Commons

Deals of the Week Watches The Stakes Rise

The wide-open IPO window has given private companies more liquidity options, so maybe it’s no wonder that pharmas are willing to pay more than usual for closely-held start-ups. Judging by some recent acquisitions, pharmas are digging deep to buy assets they believe will become blockbuster cancer drugs. The mid-June buyout of Aragon Pharmaceuticals by Johnson & Johnson for $650 million up front is among the cancer sector’s largest takeouts of a privately-held, clinical-stage company ever – and comes despite a lingering lawsuit and a prominent competitor.

Among purchase prices for pure-play oncology start-ups, J&J’s down payment for Aragon is nearly peerless. Daiichi Sankyo's buyout of Plexxikon in 2011 leads the pack at $805 million up front; if Plexxikon wasn’t technically a pure-play, virtually all of its value was tied up in a key cancer asset. Like the Aragon deal, the Plexxikon deal was heavily front-loaded: Just $130 million was tied to milestones, while J&J will be on the hook for $350 million more if Aragon hits all its marks. And compared to other cancer deals in recent memory, such as Amgen Inc.’s 2011 purchase of cancer immunotherapy developer BioVex Inc. ($425 million up front) and Gilead Sciences Inc.’s 2011 deal for Calistoga Pharmaceuticals Inc. ($375 million up front), it’s a giant step richer. 

Catherine of Aragon, via Wikimedia commons

Aragon CFO Paul Cleveland declined to discuss specifics of Aragon’s earn-out, but the deal centers on Phase II program ARN-509, an androgen receptor inhibitor for castration-resistant prostate cancer. For its hefty purchase price, J&J gets an asset that’s already withstood one court challenge from rival Medivation Inc., and could face another. Medivation’s Xtandi (enzalutamide) shares lineage with ARN-509; both were discovered based on the research of University of California, Los Angeles professor Charles Sawyers, and Medivation alleged that the school hid ARN-509’s existence while out-licensing Xtandi. A judge affirmed that Aragon owns ARN-509 in January, but Medivation is appealing the ruling; a resolution might not come until next year.

Apparently the uncertainty wasn’t enough to spook J&J, but it’s possible that a different uncertainty spurred it to buy: Aragon’s choice regarding whether to conduct an IPO. The queue for new biotech listings is a long one, and it might be as easy as ever to go public. Even bluebird bio Inc., a mid-clinical-stage company in the once-untouchable gene therapy field, priced above expectations in mid-June, signifying that appetites are high for new offerings – even ones that carry a lot of risk. Indeed, Cleveland told “The Pink Sheet” that Aragon had a “very feasible go-it-alone strategy” that included a partnership and/or an IPO. (The strategy has apparently been in place for awhile, as CEO Richard Heyman told us last year.) Rather than risk letting Aragon brave the public markets, J&J moved to buy now.

In the end, J&J gets a drug that could succeed its existing prostate cancer therapy Zytiga (abiraterone), whose key patents expire in 2016. In the process, it extends a franchise that will compete with Xtandi, a drug S&P Capital IQ equity analyst Herman Saftlas said could deliver $2.5 billion in annual sales by 2015. And Aragon’s investors? Well, they get liquidity at a handsome multiple, but as part of the arrangement, they’ll also roll over some of their cash returns into a new company, Seragon, into which Aragon will spin out its Phase I selective estrogen receptor degrader ARN-810. -- Paul Bonanos

We know you have choices of your own, so thanks for choosing….

MedImmune/NGM: MedImmune, the biologics arm of AstraZeneca, signed on with privately held NGM Biopharmaceuticals June 17 to collaborate on the discovery and development of novel peptide or antibody therapeutics for type 2 diabetes and obesity. No financial terms were disclosed, but NGM will receive an up-front payment and research funding with the potential to earn development, regulatory and commercial milestones, as well as worldwide royalties on any products resulting from the partnership. The deal is the latest by MedImmune’s Innovative Medicines Unit for cardiovascular and metabolic diseases. Currently, bariatric surgery, which bypasses part of the patient’s intestines, is not reversible, and presents an array of gastrointestinal side effects, is reserved mainly for morbidly obese patients, who sometimes also suffer from out-of-control type 2 diabetes. “It’s not for every individual,” Christina Rondinone, chief of MedImmune’s cardiovascular and metabolic disease IMED said. “What we plan to do is develop a product that will mimic the benefits of surgery, avoid the side effects, and that every individual with diabetes can use. Our goal is not to treat the disease but reverse it with a drug.” Founded in 2008, South San Francisco, Calif.-based NGM now has signed three partnerships around its technology for understanding the roles that hormones play in certain diseases. In 2012, it partnered with Daiichi Sankyo to discover and develop drugs for type 1 and type 2 diabetes that modulate beta cell regeneration. Then, in January, NGM agreed to an exclusive collaboration with Janssen Pharmaceuticals Inc. to discover and develop novel therapeutics for type 2 diabetes. - Joseph Haas  

Teva/MicroDose: The Israeli firm Teva Pharmaceutical Industries Ltd. said June 17 it would acquire privately held MicroDose Therapeutx Inc. for $40 million up front and up to $125 million more in post-acquisition milestones. The New Jersey company’s two unpartnered clinical candidates are MDT-637, a treatment for respiratory syncytial virus, and a nerve agent antidote, both delivered via the company’s own inhalation technology platform. It acquired the anti-RSV candidate from ViroPharma Inc. in 2009. The firm has other delivery platforms, but Teva highlighted MicroDose’s respiratory technology and pipeline, saying the acquisition would strengthen its respiratory franchise. Underscoring Teva’s focus, the firm said it would also pay sales-based milestones and royalties upon commercialization of MDT-637 and an earlier stage asthma/COPD compound. Teva has expanded its generic empire as well as the branded side of its business through acquisition, although it has kept a fairly low profile since its $6.8 billion takeover of Cephalon Inc. in 2011. The firm has three branded respiratory products: QVAR for asthma, ProAir HFA for bronchospasm, and QNASL, a nasal spray for allergies. - Alex Lash  

Perrigo/Fera: Michigan-based Perrigo Co. said June 17 it would add to its smorgasbord of generic, over-the-counter, and animal health products by licensing a portfolio of nine generic ophthalmic offerings from specialty firm Fera Pharmaceuticals LLC of New York. Perrigo will pay $93 million, with $36 million more in contingent payments if more products are licensed. The portfolio includes sterile ointments and solutions and brought in more than $30 million in net revenue in 2012, according to Perrigo. Fera launched in 2009 with an ophthalmic portfolio that it acquired from Fougera Pharmaceuticals Inc., then the US arm of Nycomeduntil Takeda Pharmaceutical Co. Ltd. bought Nycomed in 2011. Fougera was owned by a private equity group until 2012, when Sandoz, the generics division of Novartis AG, bought it. Fera CEO Frank DellaFera and other top management were formerly with Sandoz. Perrigo claims to be the largest manufacturer of over-the-counter pharmaceuticals for the private label or “store brand” market. - A.L.  

Sanofi/Curie: A research collaboration between Sanofi and Institut Curie will revisit the basic biology that leads to ovarian cancer, according to the two entities’ joint statement issued June 19. Financial terms weren’t disclosed. The companies plan to identify targets that lead to cancer by revisiting a library of tumor samples that the Institute has preserved. Sanofi’s oncology division will work with Curie-Cancer, the Institute’s partnership organization, to address ovarian cancer using a translational approach. Sanofi plans to select targets based on tumor genome sequences, which are compared with healthy tissues to identify molecular alterations. It’s the second partnership Paris-based Curie-Cancer has formed with a major pharma this year. Roche and Curie-Cancer said in May that they would expand an existing four-year research deal reached in 2009, which had given Roche access to Curie’s pre-clinical research models. - P.B.  

DARA Biosciences/T3D Therapeutics: As it aims to focus wholly on oncology support therapeutics, North Carolina-based DARA BioSciences Inc. has spun out the last of its unrelated assets. DARA announced June 18 that T3D Therapeutics has licensed the worldwide rights to DB959, an oral, dual nuclear receptor agonist whose primary target is peroxisome proliferator activated receptor delta (PPARd). DARA has already developed the drug through Phase I for diabetes and dyslipidemia. T3D, which was founded by DARA’s former Chief Scientific Officer John Didsbury, intends to refocus the molecule as a treatment for Alzheimer’s disease. T3D is paying $250,000 up front, another $250,000 before the end of the year, plus commercial and development milestone payments. DARA will now focus solely on the commercialization of products that help with the side effects of cancer treatment – the company currently has three marketed products that fit this category, including a cream for skin irritation caused by radiation treatments. The company is looking to in-license other commercial-ready products and to find a partner that will develop the cancer support product it has in its pipeline. - Lisa LaMotta  

Protalix/Fiocruz: Israel’s Protalix BioTherapeutics Inc. reached an agreement with Brazil’s Ministry of Health that will allow the Brazilian government to manufacture the Gaucher disease treatment Uplyso (alfataliglicerase). The June 19 supply and tech-transfer agreement between Protalix and Fundação Oswaldo Cruz, known as Fiocruz, calls for the Brazilian health group to purchase $280 million worth of Uplyso from Protalix. Fiocruz will construct a facility and receive a license to manufacture its own Uplyso after seven years, once the purchase agreement is fulfilled. Uplyso, known in the U.S. and Israel as Elelyso, is an enzyme replacement therapy for Gaucher disease, a lysosomal storage disorder. Pfizer Inc. had licensed the drug locally and received Brazilian marketing approval in March, but returned rights to Protalix in exchange for $12.5 million in annual payments. Fiocruz is obligated to buy $40 million worth of Uplyso during the first two years of the agreement, and $40 million each year subsequently until it reaches the full $280 million. The seven-year agreement may be amended to add an additional five-year term to fulfill the financial terms. - P.B.

Deals of the Week's Stamp Of Approval

FDA made a pre-emptive strike this week – perhaps a move to forestall an Occupy FDA protest?

Making the most of the (political) capital it has, the agency put out a glossy report on its FY 2011 approval performance, noting that between Oct. 1, 2010 and Sept. 30, 2011, the agency cleared 35 innovative drugs. IN VIVO Blog can’t help but point out that when the numbers haven’t been as good, the fanfare has been, um, lacking.

It’s been clear for some time that 2011 was stacking up to be a stellar year for positive nods from the agency: as of October, FDA had already tied the 27 novel drugs and biologics cleared for marketing in all of calendar year 2010. Though the second-half has fewer review deadlines than the first, 2011 still stands to be a record year, helping defray criticism about an overly safety conscious regulatory body.

You can’t fault FDA’s timing. In what’s surely a happy accident, the news coincides with ongoing negotiations over the reauthorization of the Prescription Drug User Fee Act. Certainly the official report and positive press could deter Congress from tinkering with the legislation, something that might have been easier given the negative coverage bandied about.

But the presser wasn’t only about placating Congressional types. An underlying message also seemed to be that industry should stop its incessant FDA bashing. And just to show that it’s above holding a petty grudge, FDA even went so far as to share a little credit for its success with biopharma companies.

“None of FDA’s accomplishments would be possible without the innovation and hard work of large and small biopharmaceutical companies alike. Not only did the drug applications that the industry submitted to FDA represent important medical advances, but their generally high quality permitted FDA to reach an approval decision, in many cases, after a single cycle of review.”

Well, isn’t that special?

No doubt, biopharmas will find other reasons to point fingers – and this won’t stop the hand-wringing of the med-tech crew. Launching in Europe first via a CE mark is now a preferred strategy for many device companies as they juggle how to satisfy safety measures mandated by FDA.

Maybe the PR was designed to curry favor, or remind folks that FDA is the government’s Rodney Dangerfield. Still there’s no denying the agency is under continued budgetary pressure. And really, does anyone in the industry want to see PDUFA held hostage to partisan politics?

In the interim as you muse over the specifics of FDA’s approval memo, we hope Deals Of the Week garners a stamp of approval. It’s that time again.

Bristol-Myers Squibb/Aslan: Out-licensing alert! Bristol-Myers Squibb has formed a partnership with Singapore-based Aslan Pharmaceuticals to hasten the development of an early-stage compound, BMS-777607, an oral MET receptor tyrosine kinase inhibitor that it considers promising, but not core to the big pharma’s focus on more advanced oncology compounds. The Bristol compound is the second acquired by privately held Aslan, established last year by former AstraZeneca executive Carl Firth to in-license and develop early-stage compounds in oncology, respiratory and inflammatory indications and to take advantage of efficiencies in conducting trials in Asia. The companies didn’t release financial terms for the Nov. 3 deal, but Bristol said Aslan will run and fund development of ‘607 in gastric and lung cancer. Aslan obtains exclusive rights to develop and commercialize the compound in China, Australia, Korea and Taiwan, while Bristol retains Japanese rights to the drug. As opposed to its “String of Pearls” acquisition strategy, Bristol referred to the Aslan arrangement as part of its “Oyster” strategy. (Nope, we ain't gonna go there.) The goal of "OS"is to seek partners to run and fund early development of assets BMS presumably does not want to take forward itself. This is Aslan’s second acquisition – in July, it in-licensed HER2/EFGR inhibitor ARRY543 from Array BioPharma Inc.—Joseph Haas

AgonOx/MedImmune: Tiny Portland, Ore.-based startup AgonOx has been studying the OX40 receptor, a tumor necrosis factor superfamily member whose activation appears to trigger immune responses useful in fighting cancer. The company’s work has caught the attention of MedImmune, which will pay an undisclosed amount to develop oncology drugs using AgonOx’s platform. Although the companies aren’t releasing many details, MedImmune will apparently lead continuing preclinical and clinical studies on one OX40 agonist program, while supporting ongoing research on OX40 at Portland’s Providence Cancer Center. AgonOx has also studied one drug, an anti-OX40 monoclonal antibody, in 30 human patients over the past year, and further trials are in progress. In September, AgonOx said it received a patent covering OX40-related ligand fusion proteins for use in cancer. The company is seeking partners for combination therapies, potentially involving cytotoxic compounds, tumor ablation methods, and other immunologic therapies. Privately-held AgonOx hasn’t named any outside investors, but has acknowledged support from the Prostate Cancer Foundation. – Paul Bonanos

GlaxoSmithKline/DOJ: GSK's toughest negotiations this year have been with the federal government. On Nov. 3, the drug maker announced it had reached an agreement worth $3 billion (in principle) to resolve three separate government investigations tied to the following: its development and marketing of Avandia; sales and promotional practices relating to Wellbutrin SR, Advair and 7 other top selling products from January 1997 to 2004; and its nominal price exception to the best price reporting requirements of the Medicaid drug rebate program. Just to put the dollar amount in perspective, that $3 billion is more than a quarter of GSK’s Q3 2011 revenue of £7.1 billion, and in terms of potential deal value is the pharma's biggest transaction of the year thus far. Moreover, the sum is on top of the $750 million settlement GSK and DOJ reached last year tied to good manufacturing praction violations at a Puerto Rico facility. In case you are wondering, the new agreement breaks Pfizer’s 2009 record $2.3 billion settlement, which resolved allegations of off-label marketing of four drugs and kickbacks to health care providers involving nine other drugs. Still to be determined: whether any of GSK's officers will face criminal charges. The government has said for the past two years that it intends to hold individual executives responsible for health care fraud. Pfizer escaped such a fate even though the government slammed it for repeatedly violating the law. GSK attorney Lauren Stevens had previously been indicted for obstructing an FDA investigation of off-label marketing of Wellbutrin SR and making false statements. A judge acquitted her in May.--Brenda Sandburg

Celgene/Quanticel: Forget the most interesting man in the world, methinks Celgene is gunning for most interesting deal maker of 2011 award. This week comes news that Celgene is teaming up with privately-held Quanticel Pharmaceuticals in a deal that is part option-to-acquire, part financing, and all around interesting. Versant Ventures has launched Quanticel, a start-up with genomic analysis technology aimed at discovering and developing cancer drugs that target the unique genetic makeup of patients' tumor cells, after incubating the idea for more than a year. The tie up with Celgene is unusual, underscoring how VCs are desperately seeking new biotech investment models that tie early stage companies closer to potential pharma acquirers. Although details regarding the deal were light, what's know is that Celgene is committing $45 million to Quanticel in return for an undisclosed equity stake in the biotech as well as an exclusive three-and-a-half-year technology license. Celgene has sway over Quanticel in another way: more than one exclusive time-based option to buy Quanticel outright. "We hope it ends in an acquisition by Celgene," said Quanticel CEO Stephen Kaldor. "That's the design." All parties involved declined to discuss the size of Celgene's ownership stake or the details of its acquisition options. But the arrangement effectively limits Quanticel's potential buyers to one and thus caps the potential return for Versant. "This is a different risk-reward ratio than traditional venture," says Versant managing director Brad Bolzon. The trade-off, he says, is a higher ownership stake for Versant than it would have in a syndicated deal. (The amount of Versant's investment was also left undisclosed.) For more see coverage in Elsevier's Pink Sheet Daily and November's START-UP. --Alex Lash

Pfizer/Ablynx: Ablynx said today that Pfizer had returned all rights to the companies’ anti-TNF-alpha nanobodies program, which emerged over the last five years from a 2006 deal between Ablynx and Wyeth; that deal was extended in 2010 and has thus far generated two clinical candidates. Ablynx recovers full rights to ATN-103 (aka ozoralizumab), which this past May achieved positive Phase II proof-of-concept data, and PF-05230905, a pegylated backup compound in Phase I, along with clinical supplies of ‘103, IP and knowhow around the programs and manufacturing. In return Ablynx will owe Pfizer a share of milestones received from a future partnership around these assets, capped at $50 million, plus royalties. The ‘103 program was among Ablynx’s furthest along nanobodies (the camelidae-inspired, single-domain, antibody-derived proteins are so named because of their small size, and, presumably, because “Camelbodies” just didn’t sound right), and possibly its biggest commercial prospect. As such the market reacted poorly to the news today, sending Ablynx shares down 18% on the day to levels not seen since the company began public trading in 2007. During a call with analysts today CEO Edwin Moses said the assets were still “very valuable” before quoting a “former Pfizer SVP”’s morning email to the company that suggested the development would be positive for Ablynx. In fact, he suggested, were Ablynx still working with an un-Pfizerized Wyeth, the asset might "be in Phase III by now," and that plenty of companies will show interest in the newly-partnerable program. Pfizer, he noted, has other options, including its late-stage JAK3 inhibitor, and a different senior commercial team committed to that program. That may be true, but unless the company opts to find a partner straight away, it could also be expensive transition for Ablynx and have an impact on the progress of the company’s existing pipeline. Moses noted that the company would almost certainly conduct a strategic review “in the coming weeks” to reprioritize, but would probably not cut its Eur60-70 million R&D budget.--Chris Morrison

Image by flickrer Avius Quovis, courtesy of creative commons. FDA commentary written by Mary Jo Laffler and Derrick Gingery. Editing this week by Ellen Licking. 

DOTW's 12 Deals Of Christmas

On the first day of Christmas, IN VIVO gives to you an earn-out in a pear tree
On the second day of Christmas, IN VIVO gives to you two consumer deals
On the third day of Christmas, IN VIVO gives to you regional alliances
On the fourth day of Christmas, IN VIVO gives to you hostile deals now friendly
On the fifth day of Christmas, IN VIVO gives to you ON-CO-LO-GY
On the sixth day of Christmas, IN VIVO gives to you biotech spin-offs
On the seventh day of Christmas, IN VIVO gives to you biobucks a plenty
On the eighth day of Christmas, IN VIVO gives to you eight pharma partners
On the ninth day of Christmas, IN VIVO gives to you platform biologics
On the tenth day of Christmas, IN VIVO gives to you billion dollar skin care
On the eleventh day of Christmas, IN VIVO gives to you a new eye care unit

On the twelfth day of Christmas, IN VIVO...needs a break. Please read (instead)...

MedImmune/Evotec: Big pharma’s love affair with primary care is on the wane, making cardiovascular deals as rare as partridges in pear trees. But it’s a different story for metabolic disease, where drug makers see large opportunity in growing waistlines. Think Merck’s take-out of SmartCells or Sanofi’s spate of alliances to build itself into an end-to-end solutions provider. Now comes news that AstraZeneca's biologics group MedImmune is aligning with Evotec in a broad R&D deal centering on regeneration of insulin-producing beta cells. As with most early stage alliances, the deal is heavy on the back-end payments, with the German biotech due €5 million upfront and up to €254 million in milestones down the road. But should Evotec deliver the goods, it would prove a nifty return on the biotech's acquisition of DeveloGen, a deal completed less than three months ago for up to €14 million in cash and stock, plus potential earn-outs. It's DeveloGen's metabolic target discovery platform that MedImmune is tapping into, and it adds a third alliance to the subsidiary's portfolio. Meanwhile, MedImmune and parent AstraZeneca are looking to fill a hole in their pipeline. -- Alex Lash

Reckitt Benckiser/Para Pharmaceuticals: Reckitt Benckiser Group pushed further into the consumer health business and India on Dec. 14 when the household cleaning products maker announced its £460 million ($727.3 million) acquisition of India’s Para Pharmaceuticals from private equity group Actis and minority shareholders. The acquisition, which is 31 times Para’s EBITDA, gives Reckitt access to one of India’s most popula cold-and flu-remedies, D’Cold. Still that’s a steep price to pay to boost exposure in an emerging market, where Reckitt already sells Dettol, Durex and Disprin. (At that price, IN VIVO blog thinks Para should throw in at least two turtle doves.) The company’s consumer healthcare unit now accounts for one-quarter of sales and will become increasingly more important since its household cleaning division faces pressure from competition like Procter & Gamble.—Lisa LaMotta

GlaxoSmithKline/Maxinutrition: As part of its pre-Christmas shopping spree, Glaxo says no to French Hens, but yes to muscle shakes, acquiring U.K. sports nutrition firm Maxinutrition Group Holdings for £162 million. The deal diversifies Glaxo’s Nutritional Healthcare business, adding the smaller player’s line of protein-rich body building, weight management, and endurance products onto the big drug maker’s carbohydrate business Lucozade and Horlicks (also known internally as a @calcium micronutrients business"). GSK's Nutritional Healthcare sales were already on a tear climbing 12% to $408.6 million for the third quarter of 2010. But with this new triumvirate, the pharma sees a recipe for growth. It can leverage the selling power of Horlicks while tapping into the sports nutrition business, a sector still growing strong in established markets that, globally, could be worth nearly $5 billion. – Dan Schiff

Ramius/Cypress: It took four calling birds, but Cypress Bioscience finally got a buyout offer from Ramius that was music to its ears. On Dec. 15, the San Diego biotech announced it had accepted a $255 million takeover offer from Ramius. The deal values Cypress at $6.50 per share, 63% more than Ramius’ $4-per-share offer in July. When Ramius launched its pursuit, it ripped Cypress management in an open letter, blasting the company’s decision to license a schizophrenia drug from Israel’s BioLineRx and declaring its 2008 acquisition of diagnostics company Proprius a failure. Since then, Ramius has incrementally increased its offer, including a $6.00 per share deal that Cypress’s board rejected. The parties finally agreed on the $6.50-a-share price, and agreed to extend the tender offer in order to complete the deal. Cypress garners most of its revenue from fibromyalgia drug Savella (milnacipran), and completed small-money deals in August to acquire rights to an autism drug from Marina Biotech and a smoking cessation product from Alexza Pharmaceuticals.—Paul Bonanos

Sanofi-Aventis/Merck Serono: ON-CO-LO-GY! In the drug world, viable cancer drugs are definitely as valuable as five golden rings. But as the recent U.S. regulatory decision around Avastin in metastatic breast cancer shows, incremental efficacy against an unmet medical need ain’t enough any more. Some companies are trying to overcome wily tumor cells by combining targeted therapies that work via different mechanisms into a single agent. And as the Dec. 17 alliance between Sanofi-Aventis and Merck Serono shows, they are willing to forge ties with competitors (excuse me, external parties) if that’s what it takes. According to the deal’s terms, Sanofi contributes two novel small molecule kinase inhibitors (both incidentally inlicensed from Exelixis in 2009): a PI3 kinase/ mTOR inhibitor SAR245409, and a class I PI3K inhibitor, SAR245408. Merck Serono, meanwhile, supplies its MEK inhibitor, MSC1936369B. (All three molecules are currently being studied in independent Phase I trials.) Here’s how the sharing works: Sanofi will conduct trials combining Merck’s MEK with its PI3K/mTOR inhibitor, while Merck will study the other PI3K blocker in combination with its medicine, and both drug companies will fund their own studies. Beyond breathy prose about “personalizing and stratifying cancer care” and maximizing the portfolio, details about the collaboration were vague, meaning what happens after Phase I, and importantly how the financials will be sorted, remain mysteries. Structurally – and therapeutically – the deal is almost an exact duplicate of the 2009 tie-up between Merck & Co. Inc. and AstraZeneca. (No word if an overly long airport security queue also played a role in this most recent alliance, however.) -- EFL

Xention/Provesica: Rather than divide its focus between two largely unrelated programs, UK-based Xention and its investors have elected to divide and conquer, spinning out the biotech's overactive bladder program into a new, separate company called Provesica. Two of Xention’s stakeholders, Forbion Capital Partners and Seroba Kernal, have supplied not six geese-a-laying but something much more important: cold hard cash to the tune of £4 million ($6.2 million). Beyond setting up an independent Provesica, the money will support Phase II trials of its lead compound, a vanilloid TRP (transient receptor potential) receptor antagonist, which affects the detrusor muscle in the bladder. Xention, which recently raised £8 million in Series D funding, will continue to advance its atrial fibrillation program, aimed at developing inhibitors to selectively block ion channels in the heart’s atria but not its ventricles. In conjunction with the spin-off, Xention has restructured, with holding company Xention Pharma Ltd. operating an R&D subsidiary.—PB

GlaxoSmithKline/Impax: GlaxoSmithKline, which now faces generic competition for its only Parkinson’s disease drug, Requip, swam back into that space Dec. 16, inking a co-development and commercialization deal with Impax Pharmaceuticals for the smaller firm’s lead program, IPX066. (Seven swans were apparently optional.) GSK will pay $11.5 million upfront along with up to $175 million in potential milestones and tiered, double-digit royalties on sales of IPX066, an extended-release combination of levodopa and carbidopa now in Phase III, in exchange for worldwide rights outside the U.S. and Taiwan. Impax, the CNS-focused, branded drugs division of generic player Impax Laboratories, will continue to make and supply the medicine to GSK. Impax completed a Phase III trial (APEX-PD) in early-stage Parkinson’s earlier this year with strong results and expects data from a second Phase III study (ADVANCE-PD) in patients with advanced Parkinson’s in the second quarter of next year. An NDA filing could come as soon as end of 2011.—Joseph Haas

Adimab/Lilly, Adimab/Genentech, Adimab/HGSI: On the eighth day of Christmas Adimab dispensed with the 8 maids-a-milking (and drug development too) and focused on the cream of the crop: its platform. At a time when most biotechs can’t monetize their platforms through discovery stage deals, privately-held, yeast-based antibody discovery biotech Adimab (alongside DOTY nominee Ablexis) remains the rare bird. Adimab watchers shouldn’t be surprised the company has inked more deals – three of them actually, with the likes of Lilly, Genentech and Human Genome Sciences. Nor do these recent deals stray far from the company’s previous single-target antibody discovery alliances, which emphasize non-exclusivity around a target and pay the biotech undisclosed financials that include an upfront, plus milestones and royalty payments. Why is Adimab the belle of the antibody discovery ball? “Our technology platform is not only faster than conventional antibody technology but it yields more relevant therapeutic leads with a higher probability of success,” CEO Tillman Gerngross, PhD, told us for a piece we did earlier this week in “The Pink Sheet” DAILY. The upshot of all Adimab’s dealmaking is that the cash-flow positive biotech (it announced two milestone payments to go along with the three deals this week) is restructuring to an LLC to return cash to shareholders in a tax-efficient way. – Chris Morrison

Mitsubishi Tanabe/Anaphore: At least one lady (if not nine) is surely dancing on the news of Mitsubishi’s R&D tie-up with Anaphore, a San Diego-based biotech developing trimeric proteins called Atrimers. Anaphore’s CEO Katherine Bowdish tells sister publication “The Pink Sheet” DAILY, “this first partnership does a great job of validating our technology platform.” It’s certainly a nice first and Mitsubishi’s willingness to contribute research funding is a decided plus, but Anaphore isn’t going to win any DOTY nominations based on the deal terms – a $5 million upfront, $110 million in milestones, and tiered royalties on sales of any products resulting from the option-style collaboration, which could be expanded to up to three targets. Still the tie-up, focused in auto-immune disease, is a reminder that drug makers remain interested in accessing novel technologies, especially if said platforms can create medicines against intractable drug targets or are inaccessible because of preexisting IP. Anaphore is especially interested in creating novel proteins that bind receptors in the so-called TNF super-family. The biotech’s most advanced candidate, the still preclinical ATX3105, antagonizes the interleukin-23 receptor, which plays a role in autoimmune disorders. -- Shirley Haley & EFL

Galderma/Q-Med: Lords a leaping! Leading Swiss dermatology company Galderma’s $967 million bid for medical implant manufacturer Q-Med will roughly double the acquirer’s sales and substantially increase its presence in aesthetic dermatology, a sub-segment of dermatology that is growing worldwide. Galderma, a joint venture of Nestle and L’Oreal, sells prescription and non-prescription dermatology products worldwide and is the largest manufacturer of topical dermatology therapies in the U.S. Q-Med makes dermal fillers including Restylane, which competes against Allergan’s successful Botox. The deal is non-traditional in that it offers different terms for the majority shareholder, Lyftet, which owns 47.5% of Q-Med, and the remaining shareholders. Bengt Agerup, Lyftet’s CEO, has already agreed to accept an irrevocable offer of 58.94 SEK in upfront cash, with up to 16.02 SEK in additional payments if certain development and business milestones are met. The remaining Q-Med shareholders would receive a flat cash payment of 75 SEK per share. Q-Med investors will have between Jan. 4, 2011 and Jan. 25, 2011 to tender their shares.—Wendy Diller

Novartis/Alcon: On Dec. 15, Novartis AG finally acquired the remaining 23% of eye care company Alcon Inc. that the Swiss-pharma giant didn’t already own. Alas, the announcement, which requires Novartis to pay independent shareholders the same average share price it doled out to Nestle, came without much fanfare. (In what was surely an oversight given the months it took to finalize the transaction, there were no pipers piping or drummers drumming.) The deal, which is a stock swap, will cost Novartis another $12.9 billion, driving the total price of the Alcon acquisition to $51.6 billion. In dollar terms, that rivals the mega-mergers of Pfizer/ Wyeth, Merck/Schering and Roche/Genentech. Is an ophtho company worth that much? The beauty of a deal is always in the eye of its beholder, but this particular therapeutic sector is enjoying a renaissance. Ophthalmologists are a technically savvy bunch, so having a strong device presence will likely help Novartis leverage its existing ophthalmics medicine business, which along with consumer-focused CIBA Vision and Alcon will be folded into a new eye care unit run by Alcon CEO Kevin Buehler. – Lisa LaMotta & EFL

Deals of the Week: Health Care Reformation

Behold the health care reformation. Clearly the biggest deal of the week -- or in the words of our excitable veep Joe Biden, a big f***ing deal -- was passage of the US health care reform bill.

It was certainly an historic moment, a piece of legislation that its backers hope will become as transformational as the 95 Theses of Contention Martin Luther nailed to the door of the Schlosskirche in 1517. At 2,700 pages, quite the doorstop, the bill certainly is heavier than Martin Luther's masterwork. Like ML, however, its authors also had to fight against indulgences, what with the Republicans offering 40 amendments designed to derail the bill, including a comical proposal to restrict sex offenders' access to erectile dysfunction drugs like Viagra.

As we noted earlier in the week, drug makers played their cards wisely, securing market expansions and intellectual property protections beyond what many thought possible, while simultaneously resuscitating their public image. (For now the insurance industry is wearing the bright-red bull's eye.) Even with the challenges of a risk-adverse FDA and lagging R&D productivity, there's plenty of reason for pharma to celebrate.

But we're also guessing certain factions -- the tea partiers and Republicans, for starters -- have not yet begun to fight. Will the November elections be Obama's Diet of Worms? (A sure-fire weight-loss scheme, by the way, but is it reimbursable?) Does Glenn Beck get to be Pope Leo?

Obama already has his game face on. Telling Republicans to "go for it" at an Iowa rally, he warned of an uphill battle for repeal come November as voters begin to feel the benefits of near-universal coverage. Like Luther, who famously uttered before the Holy Roman Emperor "I can and will not retract, for it is neither safe nore wise to do anything against conscience," call it the prez's "Here I stand" moment.

We also say bring it on. Mining the twists and turns of the bill, and all the future amendments sure to spring forth, will keep journos like us occupied -- if not gainfully employed -- for years to come. In the meantime, there's always that little weekly round-up we like to call...



Pfizer/GSK/Global Alliance for Vaccines and Immunisation: On March 23, Pfizer and GlaxoSmithKline signed what other media outlets termed "a landmark 10-year deal" to supply hundreds of millions of pneumococcal vaccine doses to developing nations at reduced prices. It's the latest example of big pharma's desire to do well by doing good. It's also the first deal to debut under a new Advanced Market Commitment scheme that helps poor nations secure vaccines, while guaranteeing a market for the drug companies, by setting a maximum price for the preventive shots. Over the next decade GSK will supply up to 300 million doses of its Synflorix vaccine to GAVI, while Pfizer plans to donate an unspecified number of Prevnar 13 shots. According to the AMC, the companies will charge $7 a dose for the first 20% of supplied vaccine, and then just $3.50 a dose for the remaining 80%. That's far less than the $54 to $108 per-shot fee GSK and Pfizer charge in developed countries. Canada, Italy, Norway, Russia, the United Kingdom and the Bill & Melinda Gates Foundation have collectively offered $1.5 billion to fund this first AMC. (The US isn't participating, but the FDA's priority review voucher is designed to expedite development of medicines for neglected diseases.) If it goes as planned, it will likely be the first of many such tiered pricing arrangements. Pfizer and GSK have both expressed interest in future AMCs. Rotavirus vaccines and a still-experimental treatment for malaria are good candidates for future GAVI tie-ups.

Ipsen/GTx: In need of non-dilutive financing after its selective androgen receptor modulator deal with Merck came to an end three weeks ago, GTx this week revised an existing collaboration with Ipsen. It calls for Ipsen to pay GTx $58 million pegged to Phase III trial milestones for toremifene, which is being tested to reduce fractures in prostate cancer patients receiving androgen deprivation therapy. The money will certainly come in handy, but GTx is paying a heavy price. The Memphis firm will forgo some longer-term payments that Ipsen would have owed had toremifene suceeded, as well as right of first negotiation to the Phase II prostate cancer drug, GTx-758. In an interview with 'The Pink Sheet' DAILY, Rodman and Renshaw analyst Simos Simeonidis said GTx "doesn't have a lot of wiggle room right now." That's because toremifene in November garnered a complete response letter from FDA that requested a second Phase III trial to demonstrate efficacy. With just $49 million in the bank and no more money coming from Merck, GTx calculated near-term cash was more important than downstream financial rewards. It's yet another example of the new math being practiced by cash-strapped biotechs.

AstraZeneca/Xenome: On March 23, Australian biotech Xenome announced AstraZeneca's MedImmune exercised its option, originally inked in 2009, to license four peptides designed to hit an undisclosed target involved in a key pain pathway. Financial terms remain confidential, which probably means they're not very lucrative for the privately-held Xenome, which most recently raised money ($6 million) in 2008. To develop its library of 2000 peptides, Xenome turned to Mother Nature for a little help. Its potentially innovative molecules are derived from cone snail venom. Should any of the recently optioned molecules succeed in the clinic, it wouldn't be the first time gastropod poison has yielded fruit -- er, success. Elan already markets Prialt, a drug for managing chronic pain based on the same venom. It's worth noting the deal comes a few weeks after MedImmune's mothership AZ pared its internal R&D efforts in certain CNS areas such as depression and schizophrenia.

Biovail/Cortex Pharmaceuticals: If there's a prize for revamping one's business via dealmaking, we nominate Biovail. On Friday, March 26th, the company announced its eighth transaction since its 2008 decision to become a CNS specialty pharma. Recent examples include the January deal with Amgen around GDNF rights and the tie-up with Alexza for the NDA-filed candidate, AZ004, for agitation associated with schizophrenia or bipolar disorder. Biovail is paying Cortex $9 million upfront for CX717, in Phase II studies as a treatment for respiratory depression, a brain-mediated breathing disorder. The deal also gives Biovail IP and rights to preclinical ampakine compounds. Biovail will likely pay a $1 million near-term milestone and perhaps $15 million more in milestones tied to clinical success and product approval. With AZ004, the Cortex program could add another product to the detail bags of Biovail hospital specialty-focused sales force.

DotW: Party Crashers

The IN VIVO Blog was in Washington, D.C. this week and stood, as giddy as school kids, at the fence to watch the White House glow in the mid-Atlantic night just across the North Lawn. As we ogled the staff coming and going through the checkpoints (Ron--I mean Rahm--is that you?), we pondered the question of access. Who's got it? How do we get it? What do we do with it once we have it? In this town, a lot of people spend a lot of time wondering. You know: Who's in, who's out, who, ahem, left their invitations in the car.

If you're going to party-crash, you might as well go for the most exclusive club imaginable. It's a hell of a lot better than crashing with one of the most exclusive clubs imaginable. In your car. Sticking out the window. If you know what we mean. Go ahead, be a Tiger.

We poke fun, perhaps too easily, but you can be sure every pharma corp-comm exec double-checked last weekend that Tiger Woods wasn't a spokesman. (He isn't, as far as we can tell.) Domestic troubles, car wrecks, and....erectile dysfunction! Have fun with that one, folks.

Pfizer knows what we're talking about. After all, it's had baseball player and steroid user Rafael Palmeiro touting Viagra, and Robert Jarvik, non-practicing doctor who didn't even row his own boat, pimping Lipitor. So it's no surprise that on the heels of Pfizer's latest mega-blunder, its $2.3 billion fine for illegal marketing practices, CEO Jeff Kindler stuffed a couple meas in his culpa for his "Kindler, Gentler" tour this week. He praised health care reform -- at least the Senate version -- and promised Pfizer would stop helping doctors improve their golf games. (He said nothing, however, about helping golfers improve their driving records.)

As our colleagues reminded us at the FDA/CMS Summit this week, so much of health care reform revolves around getting in so you don't get left out. That's why Pfizer and the pharma industry pledged this summer to kick in $80 billion toward the reform bill. When centers of power shift, all kinds of people start to scramble. Which, wouldn't you know, brings us to...

Pfizer/Protalix: There was no greater example this week of shifting power centers than Pfizer's Dec. 1 deal with Protalix. By buying global rights to the enzyme replacement therapy taliglucerase for the treatment of Gaucher disease, Pfizer becomes the latest big pharma to crash the orphan-drug club. Because Israeli firm Protalix uses a plant-cell expressed form of the missing enzyme glucocerebrosidase, analysts speculate Pfizer could sell it at a 20 to 25% discount to Genzyme's mammalian-cell expressed Cerezyme, currently the only drug approved to treat Gaucher's. (How's that for exclusive?) The deal pays Protalix $60 million upfront for worldwide rights except in Israel, with milestones up to $55 million. Pfizer and Protalix will split revenues and expenses 60/40. The deal also plays into two of the company’s strategies, first to expand into niche areas that address serious unmet medical needs and secondly, to move into biosimilars. Pfizer will fold the drug into its Established Products Business Unit, the operation charged with maximizing sales of Pfizer’s mature brands. That’s one hint Pfizer views taliglucerase as something of a biosimilar opportunity, despite the fact that it is a new drug. Protalix is currently finalizing a rolling NDA submission for taliglucerase to FDA. Having an experienced marketer like Pfizer move into Gaucher disease is bad news for Genzyme, which is facing manufacturing problems that have led to a supply shortage of Cerezyme. -- Jessica Merrill

AstraZeneca/Targacept: With one successful partnership under their belts, AZ and Targacept are trying again, with the Big Pharma paying $200 million upfront for global co-development and commercialization rights to TC-5214, an antidepressant that recently completed Phase IIb. Yes, that's $200 million upfront. In the past two years, only the Pfizer/Medivation alliance for Alzheimer’s disease candidate Dimebon has brought a bigger upfront payment for a neuropsychiatric drug -- $225 million. Beyond the upfront, the deal also could provide up to $1.04 billion for development, regulatory and sales milestones. In addition, Winston-Salem, N.C.-based Targacept would receive stepped up double-digit royalties on worldwide sales should ‘5214 reach the market. Despite elbowing its way into the $200-million-upfront party, Targacept saw its stock price fall more than 6 percent the day of the deal. In 2005, the two companies partnered on a compound for Alzheimer’s disease (AZD3480), and since then AstraZeneca has licensed the rights to two additional compounds under the deal, while switching ‘3480’s development path from Alzheimer’s to attention deficit/hyperactivity disorder. –- Joseph Haas

MedImmune/Trellis Biosciences: But wait, there's more! Through its biologics group MedImmune, AstraZeneca also made a play in the antibody space, licensing a pool of antibodies from Trellis Biosciences with the potential to fight respiratory syncytial virus, or RSV, which occurs most commonly in the elderly, the immunocompromised, and small children. Trellis could realize up to $338 million plus royalties under the deal, but didn't disclose specifics. MedImmune currently markets the only preventive therapy for RSV, Synagis (palivizumab). There is no approved therapy for treatment, but Trellis says its antibodies have shown ability to both prevent and fight the virus in animal models. Based in South San Francisco, Calif., Trellis uses its proprietary CellSpot high-throughput screening technology to identify and extract promising antibodies from human blood samples. For its RSV program, the company screened 20 million B cells from 30 donors who had recovered from RSV. CFO James Posada told "The Pink Sheet" DAILY that Trellis hopes to bring more antibodies through preclinical and license them to partners who would take over at the IND-enabling stage. -- JH

Chiesi/Phenomix: Speaking of exclusive clubs, Europe is rather posh, innit? What young American biotech doesn't want to leave its footprint on the Continent? Phenomix went abroad this week, sealing a deal with Chiesi Farmaceutici to commercialize the DPP-4 inhibitor dutogliptin for type-2 diabetes in Europe. Phenomix gets up to $28 million in near-term cash and the total value, which includes milestone payments, could reach $163 million. It comes more than a year after Phenomix partnered with Forest Laboratories to develop dutogliptin in North America. Dutogliptin is now part of a Phase 3 clinical development program that includes five studies of 3,000 patients. The first results are due for release in the second quarter of 2010, according to Forest. Chiesi, of Parma, Italy, will be responsible for product development, regulatory approval and commercialization in the territories covered by the deal. Phenomix, based in San Diego, Calif., will also receive an undisclosed cut of sales. Following the Chiesi deal, Phenomix is now in an “excellent cash position,” said CEO Laura Shawver. Previously, the company gained $75 million upfront from Forest and it has raised $141 million since its 2002 founding. -- Emily Hayes

Centocor/Xencor: Building on a strategy that brought to market therapeutic antibodies like Stelara for severe plaque psoriasis and Simponi for rheumatoid arthritis, Johnson & Johnson’s Centocor unit announced Nov. 30 a deal with antibody developer Xencor for the rights to Xencor’s XmAb and Xtend platforms. Centocor will use them to create antibodies that are more potent and last longer. Centocor has the right to develop and commercialize several optimized candidates, and in exchange, Xencor gets an undisclosed upfront fee, an annual maintenance fee and potential milestones and royalties on products commercialized under the collaboration. Looking back for comparables, we found what appears to be a less comprehensive deal Xencor signed with Merck in March. Merck paid Xencor $3 billion upfront to license Xtend for the development of antibodies towards an undisclosed drug target, as well as agreeing to clinical development milestones and royalties. Privately-held Xencor is still swinging solo, despite the fact that M&A activity has been hot in the space as drug makers look to enhance their pipelines with therapeutic antibodies that are more effective and longer-lasting than those already on the market, especially given the increasing threat of biosimilar drugs. -- JM

And finally, a tale of an outsider in the medical device space getting invited to the dance by one of the cool kids...

Stryker/Ascent Healthcare Solutions: For years, surgical product makers have called medical device reprocessing a threat and pointed to the potential safety hazards. Now one of their own is primed to take over the market. Orthopedic firm Stryker said this week it is paying $525 million in cash to acquire Ascent Healthcare Solutions, and in doing so will control about 65% of the fast-growing $175 million device reprocessing sector. Ascent develops processes to clean, sterilize and generally refurbish used disposable devices. It submits, in most cases, the processes for FDA clearance then resells the devices for about half price. Many of the targeted products, such as cardiac ablation catheters and surgical trocars, are labeled by the original equipment manufacturer for single-use only, so reprocessing can really cut into sales volumes for OEMs, who have also complained that they are vulnerable to lawsuits when reprocessed versions of their products cause adverse events. But the move by Stryker underscores that device reprocessing has become an accepted reality and a successful business model, particularly as hospitals look to cut costs in the current economic and reimbursement environment. And despite periodic graphic reports in the media of reprocessed devices gone wrong, increased government oversight has put the recycled products in the regulatory mainstream. Stryker says it envisions a $1.8 billion opportunity in reprocessed devices and plans to make a strong pitch to hospitals about the potential to slash supply chain costs.-- David Filmore