Financings of the Fortnight Works On Its "A" Game

There have been a lot of shifts lately behind the reasons people start new biotech companies. Academic and nonprofit sources of biomedical innovation are growing more eager to take on “translational” duties to make their research more palatable to the private sector. Cuts in Big Pharma research groups have created larger pools of available talent. New government regulations now let private companies test public investor sentiment without announcing to the world their IPO intentions. (Regulations are loosening more; the Securities and Exchange Commission just voted to allow direct solicitation of the public in securities offerings.)

The reasons might be more compelling, but are they drawing more investors back to startup-land?

The folks at our sister publication Start-Up have always liked to use Series A rounds as a way to gauge the temperature surrounding biomedical company formation. They’ve been doing what they call The A-List since 2004, tallying the year’s newly disclosed A rounds and all the data around them. It’s about numbers, but also sentiments and attitudes. For example, in the most recent A-List, we asked VCs if all worthy early-stage companies were getting funded. (Click image to enlarge.)

We’re looking forward to asking that question again at the end of 2013. For now, let's take a peek at the Series A financings for the first half of the year to see if we can stir up the tea leaves.

By FOTF’s count, there have been 41 new Series A fundings for device, diagnostic and biopharmaceutical companies with the amount disclosed (and four more without). The funds disclosed total $567 million. That’s well ahead of the 2012 first-half deal flow of 33 rounds and $423 million.

If the pace quickens in the second half of 2013 as it did last year (final 2012 tally: 103 Series A rounds), we could see deal flow akin to the pre-crisis years of 2007 and 2008. That’s one big takeaway.

As usual, biopharma makes up the bulk, with 35 deals and $481 million in disclosed dollars. That’s an average of $16 million per round for the companies that disclosed dollars, a 10% jump over last year’s biopharma average, as noted in the most recent A-List:



We might also be seeing a change in syndicate composition. By this time last year, 10 Series A were solo efforts, the largest being Third Rock Ventures’ debut of Global Blood Therapeutics, and people were telling us how difficult early-stage syndicates were to arrange. This year, only three deals have been announced as solo deals, with Third Rock again taking the top spot with its $47 million commitment to Jounce Therapeutics. (For an in-depth look at Third Rock’s strategy, check out the latest Start-Up cover story.)

Among therapeutic areas, by the way, nine of the 45 companies say they’re in oncology, seven say neurology, and six say cardiovascular disease. Infectious disease, metabolic disease, and gynecology/urology have four or five.

Based on the half-year numbers,our next full-blown A-List might reflect the optimistic bent that the IPO markets have helped create this year. Might, we emphasize. Six months of deal announcements are a squirrely sample size, so take our little foray simply as a guide to things to watch for the rest of the year.

And for the rest of this hour, how about kicking back with the latest edition of...

Prosensa Holding: On June 28, Dutch biotech Prosensa netted $83.4 million in an IPO on Nasdaq through the issuance of 6.9 million shares at $13, the high end of its $11-13 range. Prior to its IPO, the firm had raised €56.4 million ($73 million) through private equity rounds. Company president Hans Schikan says Nasdaq offered a healthier financial opportunity than European exchanges. With an RNA modification technology platform licensed exclusively from neighboring Leiden University Medical Centre, the 11-year-old company aims to develop antisense therapeutics that induce skipping of exons (disrupted gene coding sections). It’s getting a good start: just prior to the IPO filing, it got word of receipt of FDA breakthrough designation status for its lead compound drisapersen (PRO051), a program it partnered with GSK in a 2009 deal that’s worth up to $667 million in pre- and post-commercialization milestones, plus double-digit sales royalties. Earlier in the year, some of the company’s other programs were granted EU orphan drug status in the muscle-wasting disease Duchenne muscular dystrophy indication. Of the European biotechs with initial public offerings (including Belgian cell therapy company Cardio3 BioSciences, see below),  Prosensa has raised the most and has continued to climb. On its June 28th opening, it closed at $19.02, a 46% premium over its offering price, and it closed July 11 at $26.26. -- Maureen Riordan

MannKind: Despite regulatory setbacks, and facing long odds following the poor reception of Pfizer/Nektar’s Exubera and eventual withdrawal of the drug from the market in 2007, MannKind is forging ahead with its own late-stage inhaled insulin candidate Afrezza, and on July 1 announced a $160 million debt financing to support further development. Deerfield Management committed to buying 9.75% senior secured notes, maturing in 2019, in four equal $40 million tranches contingent upon MannKind achieving certain milestones that include the release of Phase III data in Type I and II diabetic patients (using the newer-generation Dreamboat inhaler), paying down debt, and Afrezza’s FDA approval. After an undisclosed period following disclosure of the clinical data (expected later this summer), Deerfield has the option to convert a portion of its notes into common stock. In return for an $18.9 million up-front payment, the investment firm also receives milestone rights, entitling it to up to $90 million based on strategic and sales goals. MannKind is also working in the oncology area but last year partnered some of those programs with Tolero Pharmaceuticals and Colby Pharmaceutical in order to put resources towards Afrezza. Since the start of 2012, MannKind has raised nearly $316 million, including two FOPOs plus the current fundraising, to fund Afrezza efforts. In Q4 2013, the company hopes to submit an amendment to its existing NDA (first filed in March 2009). -- Amanda Micklus

OncoEthix: Privately held Swiss biotech OncoEthix has raised $19 million in a Series B funding to progress its early-stage cancer treatment OTX015 into Phase II proof-of-concept studies, at which point its owners hope to sell or license out the novel medicine to a pharmaceuticals group. The BET bromodomain inhibitor belongs to a new class of medicines which researchers are testing to learn whether they can trigger cancer cell death. SV Life Sciences led the round and was joined by new investor Edmond de Rothschild Investment Partners. Existing investors including Index Ventures and Endeavour Vision also participated. The proceeds will be used to progress OTX015 into Phase II proof of concept, and a potential [investor] exit at that point, CEO Bertran Damour told "The Pink Sheet" Daily. The fundraising brings OncoEthix’s total venture capital up to $30 million and will keep the biotech running for the next 24 months, Damour predicted. The company was founded in 2009 by Esteban Cvitkovic, Kay Noel, Yves Paternot, and Patrice Herait, all experienced oncology drug researchers who set out to establish a portfolio of three to five new cancer medicines through in-licensing. Between them the founders have been involved in bringing 37 drugs to market, according to CEO Damour. OTX015 was in-licensed from Mitsubishi Tanabe Pharma Corp. in 2012. After reaching proof-of-concept, the company plans to out-license drug candidates to pharma partners. – Sten Stovall

Cardio3 Biosciences: Another biotech from The Low Countries debuted this fortnight and almost immediately had to weather a storm. The Belgian firm debuted on the NYSE Euronext Brussels and Paris, selling 1.38 million shares at €16.65 ($21.76) each. Cardio3's lead product C-Cure uses a patient's own hematopoetic stem cells harvested from bone marrow and programmed outside the body to differentiate into heart muscle cells and, re-injected back into the patient, to repair damaged heart tissue. The issue raised €23 million for the regenerative medicine firm, and it raised the eyebrows of UK researchers and subsequently Forbes columnist Larry Husten, who highlighted several data discrepancies in a Cardio3 paper that helped fuel the IPO, as well as a conflict of interest with one of the paper's authors. Husten's column has been updated with a sharp response from Cardio3 and a rather sarcastic one from the UK professor leading the criticism against Cardio3. The firm says the criticism is unfounded; so far investors have mainly rolled with the punch, and the stock closed July 11 at €18.73, down from a brief high of €21.45 but by no means a sign of sauve-qui-peut, as they say in Wallonie. -- Alex Lash

All The Rest: Heliae, a start-up developing algae-based products for the therapeutic, nutraceutical, personal care, and agroscience markets, received $24.8mm in an early-stage VC funding round...regenerative medicine company ViaCyte (developing a stem cell therapy for diabetes) raised $10.6mm in Series C-1 funds from backers including J&J Development Corp., Sanderling Ventures, and Asset Management Co…in an $6mm add-on to its February 2012 Series A round, Mnemosyne Pharmaceuticals garnered a total of $11.4mm...In what appears to be its Series A round, viDA Therapeutics has raised $1.8mm in new VC funding following the second tranche of its seed funding in April…University of Bath spin-out Glythera added £700k ($1mm) to its 2008 Series A, which is expected to total £2mm over the next three years in tranches of a similar size and contingent on the achievement of certain milestones…In an early venture round, Cantargia – a Swedish developer of leukemia therapeutics – added $1mm to its coffers…ETH Zurich spin-off BioVersys (antibiotics) raised an undisclosed oversubscribed Series A round..Publicly traded AntriaBio (metabolic disorders) completed a $12mm private placement…AmpliPhi BioSciences (antibacterials) grossed $7mm through the private placement of 5mm Series B preferred shares that convert into 10 common shares…Avanex Life Sciences (Alzheimer's disease therapeutics) completed a $2.6mm PIPE, plus a $10mm funding commitment from Lincoln Park Capital with $100k received so far…Cancer drug developer Merrimack, which went public last year, proposed concurrent $50mm follow-on and $75mm notes offerings…Amarin completed a FOPO of 21.7mm ADSs priced at $5.60 netting $121.5mm…A few companies set IPO terms: OncoMed Pharmaceuticals (cancer) plans to offer 4mm shares at a $14-16 range; Conatus Pharmaceuticals (liver disease therapeutics) anticipates selling 5mm shares at a $10-12 range; and human cell manufacturer Cellular Dynamics set a range of $12-14 for a planned 3.8mm share offering…Heat Biologics (cancer and infectious disease immunotherapies) increased its proposed number of IPO shares, to 2.3mm (from 1.65mm) at the same $10-12 price range…And three companies filed for IPOs: Emcure Pharmaceuticals, an Indian manufacturer and developer of APIs across a variety of therapy areas; Can-Fite spin-off OphthaliX (has a Phase III candidate for dry-eye syndrome); and synthetic biology technologies company Intrexon…Specialty CNS pharmaco Avanir has tentative plans for a $50mm debt financing…Biodelivery Sciences brought in $20mm through a senior secured loan from an affiliate of Midcap Financial LLC…regenerative medicine firm Tengion raised $18.6mm through the sales of senior secured convertible notes concurrent with a $15mm equity investment from Celgene…In fund news, Kohl Kohlberg Kravis Roberts closed a $6bn Asia-Pacific region fund focusing on consumer products, retail, health care, education, and industrial companies.

Big thanks to Maureen Riordan and Amanda Micklus for help with Series A data. 

Photo courtesy of flickr user IMLS DCC. Click that link if you like old boats.

Financings of the Fortnight Checks The Forecast

We’ve got forecasts on the brain this fortnight. No laughing matter: What happened on the East Coast with Hurricane Sandy was grim, and as of this writing remains so. If you haven’t yet, please take a minute to donate to the relief effort.

A continent away, we here at FOTF HQ have many colleagues, friends and loved ones directly affected by the storm; before, during and after we have watched intently. The forecast called for disaster, and the storm brought fresh appreciation for what that overused term really means. We’re always amazed how people shrug away warnings of impending danger by saying previous warnings didn’t live up to their billing. Hurricane Irene barely ruffled New York City’s feathers, so how was Sandy going to be any different? Psychologists say this all-too-human trait is a reliance on cognitive schemas – forming assumptions or predictions upon an organization of previous experience.

We here in earthquake country are taking some time this weekend to make sure our emergency supplies are refreshed and at hand. Just because there hasn’t been a Big One in our lifetimes doesn’t mean there won’t be one tomorrow.

One example of humans – indeed, Californians – trying to imagine beyond their previous experience was the creation of the California Institute for Regenerative Medicine, or CIRM, a $3 billion bond measure the state voted for in 2004 to create an untouchable reservoir of funding for stem-cell and regenerative-medicine research. Whether such a measure would pass today, with the state fighting its way through a mountain of debt, is another matter. But Californians agreed eight years ago with the forecast that warned this brave new scientific world needed a protectorate. Eight years later, those monies are slowly making their way up the R&D food chain. In our next issue of Start-Up, we’ll check in on CIRM and the effect of its public largesse, including the new stem-cell-related companies that have sprung from CIRM-funded academic projects. CIRM has also funded a handful of for-profit companies through its various grant programs, and one thing our story will explain is a new initiative that awards grants to companies with solid venture backing or corporate partnerships. One of those awards just went to bluebird bio, which we detail in our roundup below.

Bluebird also happens to be part of another story in the next issue of Start-Up. The firm's $60 million Series D round, announced earlier this year, has significant participation from crossover investors; it's one of many big venture rounds in recent months to include hedge or mutual funds. The recession drove them away from investing in pre-IPO companies for the most part, but like a slow-moving weather system, the cycle has spun back around. The crossovers are back, investing the past 12 months in a sizable number of the venture rounds of $50 million or more, and we’ll explain why – and what’s different this time.

Another company in the news this fortnight is one of the biggest crossover successes to date, Puma Biotechnology, which became public in 2011 via reverse merger but only recently gained a listing on a major stock exchange – and raised $138 million to boot, as we explain below in our roundup.
 
Meanwhile, the real fundraising begins this week in thousands of towns, from the nation's largest on down, to put lives and communities back together. We're forecasting a lot of hard work ahead, and we're keeping everyone who was in Sandy's path in our thoughts as we head into another edition of...


  
bluebird bio: The gene therapy company said October 26 it received a $9.3 million grant from the California Institute of Regenerative Medicine to push forward a Phase I/II trial of its treatment for beta-thalassemia, a genetic blood disorder. Bluebird’s lentivirus technology inserts a gene into a patient’s hematopoetic stem cells ex vivo to correct a mutation, the cells are reintroduced to the patient and prompt the bone marrow to start producing healthy red blood cells. The stem-cell angle qualifies bluebird for a grant from CIRM, which was approved by California voters as a $3 million bond in 2004 to create a steady source of stem-cell and regenerative medicine support. The bluebird grant is part of CIRM's new $60 million fund earmarked for companies that have either rounded up significant venture backing or secured a partnership. Bluebird is in the former category, having announced in July a $60 million Series D round, and puts the Cambridge, Mass. firm in the spotlight of a small renaissance for gene therapy, as we detailed in a recent Start-Up article. The field fell into disfavor for much of the previous decade, but a gene-therapy product was approved today in Europe, and bluebird has made clinical progress, with safety concerns giving way to clinical, manufacturing and commercial problems to solve. -- Alex Lash

Puma Biotechnology: The single-asset company quietly went public through a reverse merger in late 2011, but only recently did it tap the public markets for the first time, all while upgrading its listing to the New York Stock Exchange. On October 24 Puma closed out a $138 million offer, selling 8.625 million shares at $16 apiece that included more than a million additional shares purchased by the underwriters. The company was formed to develop neratinib, a small-molecule PAN-HER inhibitor licensed from Pfizer in October 20011. The compound is currently in Phase II trials to treat HER2-positive breast cancer. In November 2011, Puma reverse-merged into a shell company and raised $60 million by selling 16 million shares at $3.75 each to a group led by Adage Capital Partners, even though its stock was not listed on an exchange. It began trading publicly in April on the over-the-counter bulletin boards. Its shares closed Wednesday Oct 31 at $20.60. Part of the company’s appeal is its founder's track record. Puma is led by Alan Auerbach, who built Cougar Biotechnology around the prostate cancer drug abiraterone, brought it into Phase III, and sold it to Johnson & Johnson in 2009 for $1 billion. J&J ushered abiraterone to an FDA approval in 2011 with the trade name Zytiga. Like Puma, Cougar in 2006 reverse-merged its way to public standing and raised cash to push forward its lead candidate. The J&J deal helped peel away some of the stigma reverse mergers carry (as in, “if you couldn’t go public the normal way, how good can your company really be?”). One high-profile VC actually said last year the acquisition provided inspiration to reverse-merge the osteoporosis company Radius Health into a shell. Radius recently filed for its first public offering, aiming to bring in $56 million, and a Nasdaq listing. -- A.L.

Atara Biotherapeutics: Amgen and venture firm Kleiner Perkins Caufield & Byers jointly announced the spinout and funding of Atara Biotherapeutics on Oct. 26, creating the company to house and develop six Amgen assets. The start-up will have programs in nephrology and oncology, with assets ranging from pre-clinical to Phase I. Amgen will retain an unspecified amount of equity in the new company, while Kleiner will provide funding in its early days. A former Kleiner partner, Isaac Ciechanover, will be its chairman and CEO. Neither Amgen nor Kleiner would comment specifically on the assets or why Amgen chose not to develop them itself, and it’s not yet clear whether Kleiner will eventually close a formal Series A round or attempt to form a funding syndicate with other VCs. The biotech and venture firm have a prior relationship: Boston-based cancer drug maker Tesaro, a Kleiner portfolio company, acquired a key asset from Amgen in 2011, a year before it went public. Amgen has spun out other companies as well; it created Relypsa to house assets that formerly belonged to Ilypsa, a company it acquired in 2007. – Paul Bonanos

Aclaris Therapeutics: Newly formed dermatology start-up Aclaris announced Oct. 24 a $21 million Series A funding with the founder and former CEO of Vicept Therapeutics and  support from the same three venture capital firms that backed Vicept. Vivo Ventures and Fidelity Biosciences led Aclaris’ initial funding, and Sofinnova Ventures provided a supplementary component of the round. A $16 million Series A round from those three firms supported Vicept from its inception in 2009 through its July 2011 buyout, in which Allergan paid $75 million upfront. Aclaris CEO Neal Walker wouldn’t disclose the nature of its primary asset except to say the compound is a preclinical, topical treatment for a highly prevalent condition. The drug will have both medical and aesthetic uses. Aclaris is the second entity to emerge from NeXeption, which establishes, funds and supplies management to independent operating companies tied to individual assets it believes are potential targets for pharma partnerships. The model echoes creative asset-based financing structures that venture firms have formed, such as the Velocity group carved out of venture firm CMEA Capital, the Atlas Venture Development Corp., or Inception Sciences, which was formed by Versant Ventures to discover drugs and spin them out into single-asset virtual operating companies. But the start-ups under NeXeption’s umbrella will license rather than discover new assets, and they will be standalone entities staffed by a combination of NeXeption executives and additional employees brought in to suit their specific needs. NeXeption also shares risk with outside venture investors, while taking equity itself. NeXeption’s first company was Ceptaris Therapeutics, which is developing a topical treatment for cutaneous T-cell lymphoma. Vivo also has invested in that company, formerly known as Yaupon Therapeutics. – P.B.

 Photo courtesy of flickr user Brian Birke via Creative Commons license.

Deals Of The Week: Will Lightning Strike Twice At Shire?

The old adage is that “lightning doesn’t strike the same place twice,” but as April showers approach, Shire PLC appears to be gambling that the cliché does not ring true. On April 12, it made a move to bolster its burgeoning Regenerative Medicine division, buying out privately held Pervasis Therapeutics in a deal that reportedly could total $200 million if all milestones pay out.

Pervasis adds a Phase II cell-based therapy Vascugel, for improving hemodialysis access for end-stage renal disease patients, and its endothelial cell technology platform, to Shire’s portfolio.

And Shire executives did not bury the subtext of the transaction – the specialty pharma is hoping that with targeted acquisitions, it can become the “partner of choice” in regenerative medicine, just as its 2005 acquisition of Transkaryotic Therapies enabled Shire to become Genzyme’s main competitor in enzyme replacement therapies.

The $1.5 billion purchase of TKT was leveraged into Shire’s ever-growing Human Genetic Therapies unit. Now, by pairing tiny, two-employee Pervasis with last year’s $750 million takeout of Advanced BioHealing, which brought in the skin-substitute Dermagraft, the company is trying to tell a similar story in regenerative medicine.

“That’s definitely our intent,” Kevin Rakin, president of Regenerative Medicine at Shire, told “The Pink Sheet”. “We want to do the same thing in regenerative medicine and I think there’s a template here: [acquire a] venture capital-backed company, get some technology into man and prove the applicability, and then ideally we can be ideally the partner of choice … for regenerative medicine product development and commercialization.”

ABH took a floundering product, Dermagraft, off the hands of a large medical devices company and built it into a successful franchise. The acquisition has brought Shire development, manufacturing and commercial expertise in regenerative medicines. The acquisition of Pervasis and the renal disease product candidate Vascugel offers a number of synergies, said Jeff Jonas, Shire’s head of R&D for regenerative medicine, in an interview with “The Pink Sheet” during EBI’s Pharmaceutical Strategic Outlook conference in New York on April 12.

“We know the renal space very well from our work with Fosrenol (lanthanum carbonate, Shire’s phosphate binder for a number of chronic kidney disease indications),” he said. “We are familiar with the dialysis suite. We are familiar with cell therapies as well. It is a marriage of a number of synergies that exist in the company.”

This deal should be seen as a harbinger of things to come from Shire, Jonas added, and not as simply an incremental transaction. In regenerative medicine in particular, the specialty pharma is seeking early- to mid-stage assets with upside that it can de-risk early in the development cycle. While HGT now comprises about one third of Shire’s total business, a fraction that is growing, Jonas would not put a number on regenerative medicine’s potential other than to predict that it represents an “area of real potential growth in the next 20 years.”

And now, get out your umbrellas, it's time for the latest roundup of:

Takeda/URL: In a bolt-on acquisition, Takeda’s U.S. division will pay $800 million upfront with the potential for sales-based earn-outs beginning in 2015 to take out privately held URL Pharma. With the buyout, announced April 11, Takeda acquires the gout treatment Colcrys (colchicine).  Takeda hopes that the addition of Colcrys to its existing Uloric (febuxostat) could position the company as the provider of choice for gout therapy in the U.S. Takeda executives were not specific about how URL will be absorbed into Takeda Pharmaceuticals North America, but said the acquisition is expected to be accretive to earnings beginning in 2013. Venture capital-backed URL, headquartered in Philadelphia, markets Colcrys via a 350-person contract sales force. The firm markets three other products in addition: Qualaquin (quinine) for malaria, Fibricor (fenofibrate) for triglyceride management and the antibiotic Bactrim (trimethoprim and sulfamethoxazole). URL’s sales were roughly $600 million in 2011, led by Colcrys, an alkaloid indicated for prophylaxis and treatment of gout flares as well as familial Mediterranean fever in patients four and older, which generated $430 million in revenue. Uloric, which launched in 2009, is hardly on a blockbuster track. The drug posted net sales of $117 million in 2011. But Takeda executives said the two drugs should complement one another well, since Uloric is indicated to treat chronic gout, while Colcrys treats acute cases.--Joseph Haas

Amgen/KAI Pharmaceuticals: Amgen announced April 10 that it plans to acquire KAI Pharmaceuticals. The big biotech paid $315 million in cash for the South San Francisco, Calif., biotech with plans to move its lead compound into late-stage testing as soon as possible. KAI currently is developing KAI-4169, a peptide agonist of the calcium-sensing receptor being developed for treatment of secondary hyperparathyroidism (SHPT) in patients with chronic kidney disease (CKD) who are on dialysis. The company presented positive Phase IIa data last year that showed ‘4169 raised the levels of parathyroid hormone. A Phase IIb trial is currently ongoing and results are expected in “the near term,” Amgen said. Phase III planning is underway already and Amgen will provide the company with a loan in advance of the deal closing to support planning. Amgen will have full worldwide rights except in Japan. KAI licensed the Japanese rights to the drug to Ono Pharmaceutical in September 2011, nabbing a $13 million upfront. The drug is currently being tested in an intravenous formulation, and KAI has looked into a transdermal formulation as well. But, Amgen’s head of nephrology, Reshma Kewalramani said the company is specifically focused on the IV formulation for the moment. “The appeal of this molecule is that it can be administered in concurrence with dialysis,” she said.–-Lisa LaMotta

Celgene/AnaptysBio: Celgene and AnaptysBio announced an antibody-discovery partnership on April 9. No financial terms were disclosed. AnaptysBio will generate antibodies to oncology and inflammation targets using its proprietary SHM-XEL platform. Celgene will receive worldwide rights to develop and commercialize antibodies discovered by AnaptysBio under the terms of partnership. Privately held AnaptysBio is a leader in harnessing somatic hypermutation (SHM), the body’s natural process for generating antibodies, for antibody discovery and optimization. SHM-XEL is an in vitro platform that couples SHM with mammalian cell display to generate antibodies with desired binding and specificity properties. AnaptysBio will receive an upfront payment, potential preclinical and clinical milestone payments, and potential royalties on sales of each product derived from the partnership. The alliance is similar in structure to a pair of deals that the antibody specialist struck in January 2012: one with Novartis and another with an undisclosed company. It was Novartis’ second collaboration with AnaptysBio, the prior one having successfully delivered antibody candidates into the big pharma’s pipeline. AnaptysBio additionally has struck antibody discovery deals with Roche and Merck. This most recent partnership appears to be Celgene’s first foray into antibody therapeutics. The cancer biotech has focused its pipeline primarily on various flavors of small molecules – e.g., epigenetic, multi-mechanism IMiDs and kinases, and cytotoxic chemotherapeutics – and also on cellular therapies. As such, the deal represents a significant broadening of its early-stage portfolio.–-Mike Goodman

Arrowhead/Alvos Therapeutics: RNAi company Arrowhead Research Corp. announced April 11 that it acquired privately held Alvos Therapeutics, a developer of proprietary human-derived homing peptides, in an effort to gain delivery technology for its short interfering RNA (siRNA) compounds. Alvos shareholders will get an upfront payment of 315,467 shares in Arrowhead (about $2.13 million) and will be eligible to receive additional stock valued at up to $23.5 million if certain clinical and regulatory milestones are achieved. Alvos stockholders could receive additional stock if the first three drugs using the Alvos technology reach certain sales milestones. Targeted delivery of RNA interference candidates has been the field's premiere challenge. The Alvos technology platform, which originated at MD Anderson Cancer Center, is designed specifically to generate peptides that bind to and enter tumor cells, potentially solving the delivery problem for Arrowhead, which acquired Roche’s RNAi assets in October. Alvos, previously known as Mercator Therapeutics, will be integrated into the Arrowhead facility in Madison, Wis. Arrowhead CEO Christopher Anzalone said in a statement that the acquisition benefits the company by allowing “for the creation of new peptide-drug conjugates against cancer and other indications, thereby expanding our business and capabilities in a cost effective way." –-L.L.

Photo credit: Wikimedia Commons