2013 Financing of the Year Nominee: CHOP Launches Spark

It's time for the IN VIVO Blog's Sixth Annual Deal of the Year! competition. This year we're once again presenting awards in three categories to highlight the most interesting and creative deal making solutions of the year. The categories are: M&A of the Year, Alliance of the Year, and Financing of the Year. We'll supply the nominations (about a half dozen in each category throughout over the next week or so) and you, the voting public, will decide the winners (by voting early and often, commencing once we've announced all the nominees). Strap yourselves in, it's The Race for the Roger™.

In October, the Children’s Hospital of Philadelphia launched Spark Therapeutics with $50 million in funding, enough to carry its lead program to market, a gene therapy for an inherited form of blindness. In doing so it is riding a wave of recent high-profile investment in gene therapy, as witness the hefty series A rounds for Audentes Therapeutics and GenSight Biologics.

So gene therapy is gaining steam (again); but Spark is unique, or at least unusual, and we think it deserves your vote for Financing of the Year. First, it has sprung, nearly fully formed (with a Phase III asset), from a research hospital. CHOP is neither the first nor the only hospital to incubate a technology and commercialize it through a wholly-owned company. Cincinnati Children’s Hospital, Boston Children’s Hospital, and Cleveland Clinic Innovations have all engaged in various flavors of company creation.

But CHOP has taken it to another level. The RPE65 gene was first cloned in the 1990s; in 2004, Dr. Katherine High persuaded CHOP to take on the research that culminated in the launch of Spark a decade later. Think about it: a research hospital deciding to pull the trigger on a program that it has nurtured to Phase III, and to launch it into the rough and tumble commercial world with enough cash and with the right mix of clinical/regulatory/manufacturing/commercial capabilities to bring it to market.

Venture companies don’t typically do that. Their cash is too impatient. In fact, the investment is also noteworthy for what it may portend for the beleaguered world of life science VC or technology-hungry pharma.

Note that CHOP did not seek venture funding for its technology. Though Spark is free to turn to venture or other sources of support in the future, including a pharma partner, CHOP apparently felt that Spark the newco, like the decade-long R&D that CHOP sponsored around the RPE65 gene, needed time and a shielded environment to succeed.

And where research hospitals have traditionally licensed their technologies to for-profit companies at bargain-basement single-digit royalty rates, CHOP may be re-writing the book on how better-capitalized hospitals could monetize their inventions in the future. Not that it has foregone its traditional avenues for raising money – clinical activity is still the biggest source of revenue, along with royalties on its proprietary research. But there’s no doubt it’s getting smarter. In 2008, the hospital sold the royalty on its rotavirus vaccine, now Merck’s Rotateq, to Royalty Pharma for $182 million.
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CHOP, as majority owner, gets a healthy cut of Spark’s revenue, a not inconsiderable boon to a research institution in a time of uncertain support from Federal funding. CHOP CEO Steve Altschuler said that the spin-out of a for-profit vehicle like Spark is part of a broad process of diversifying its revenue streams.

Talk about diversification – Spark has a full pipeline of gene therapies. It has a Hemophilia B program in Phase I/II, as well as other hematological programs, and preclinical programs in neurodegenerative diseases that take it out of the orphan monogenic space. In fact, Spark is following in the footsteps of uniQure BV, which won EU approval of the first gene therapy, the first such approval in the major markets. uniQure has helped investors to visualize a clinical and regulatory path to market for gene therapy.

Now Spark is competing with uniQure to bring the first FDA approved gene therapy to market.

We’ll know soon if the blindness program gets a regulatory nod. If so, it will derisk Spark’s other programs, providing CHOP/Spark with lots of potential exit options for its pipeline, and possibly whetting CHOP’s appetite for more company creation. We’re nominating the launch of Spark Therapeutics because it stands at the crossroads of tomorrow’s medical treatments and how they get funded.

spark image via flickrer adeak reprinted under creative commons license

Deals of the Week: GSK's Stealth Move To The Coasts

GlaxoSmithKline is following some of its big pharma peers to key innovation hubs in the U.S. by opening satellite R&D centers in San Diego and Cambridge, MA.

When Johnson & Johnson opened its innovation center in Boston earlier this year, the company made a big to-do about the move and announced plans to fund two startups there. Pfizer, meanwhile, announced a significant $100 million investment through a collaboration with local hospitals and academic institutions when it anointed the Boston area the headquarters for its academic deal engine, the Centers for Therapeutic Innovation.

GSK, on the other hand, went in a different direction with its announcement, unveiling the move … via blog post. We couldn’t help but notice the difference in tactics and wonder if GSK’s decision to downplay the announcement reflects its ambitions for the satellite offices.  Whatever the reason, GSK clearly views the expansion as an evolution of its business development strategy, not a seismic shift in the way it approaches R&D.

GSK’s Damien McDevitt, VP Business Development, R&D Therapy Areas, will run the California center. He confirmed details in an interview Dec. 10. "These are both small virtual offices,” he said. “They are not large R&D centers by any stretch of the imagination.” The San Diego office will host about five to 10 scientists and the Boston office will have about 10 to 12, with a heavy emphasis on business development, he said.

"We have always had collaboration activities in these two locations, but what we haven’t had, at least on the West Coast, is a satellite office to be able to work more closely with all the groups we work with, including academia, venture and biotech,” he said. The company’s main U.S. R&D offices are located in Research Triangle Park, NC, and Philadelphia. GSK’s venture group, SR One, has offices in San Francisco and Boston. And its most recent venture effort, Action Potential Venture Capital, is headed by Imran Eba, who recently relocated to Cambridge to open up that shop.

GSK views its California and Boston R&D outposts as bridges to strengthen its existing relationships and forge new ones. A big focus, at least for the West Coast, will be on its partnership with VC firm Avalon Ventures. Earlier this year, the partners announced plans to fund 10 new single-molecule drug companies. Their first biotech, celiac disease drug developer Sitari Pharmaceuticals, was hatched with a $10 million Series A in November.

McDevitt said GSK and Avalon are aiming to establish at least three or four new companies by the end of 2014. But the new R&D centers won’t be solely focused on venture funding opportunities. They will be scouting new partnerships with academia and biotech, while also strengthening ties to existing partners. GSK has collaborations with some 22 West Coast partners, McDevitt pointed out.

GSK will be agnostic about therapy areas when it comes to new projects, and will consider both platform technologies and new products, with an emphasis on preclinical programs. Mostly, he said, the point is “keeping an open mind” and looking for breakthrough science. - Jessica Merrill

Our minds are always open, but we’re here to tell you when the deals are closed. With that in mind, here’s this week’s edition of...

Roche/Prothena: Prothena's new deal with Roche, worth $45 million in upfront payments and near-term clinical milestones and potentially up to $600 million to the biotech in the long run, gives it a major pharma partner that recently cited central nervous system diseases as a core R&D priority. In turn, Roche gets access to a synuclein antibody program that is ready for the clinic and has been guided by scientists who are world-class drug developers. The Dec. 10 deal revolves around PRX002, a Phase I-ready antibody that targets alpha-synuclein, believed to play a role in Parkinson’s and other neurodegenerative diseases. But it also gives the partners opportunities to collaborate on related conditions. Prothena is receiving most of the first tranche of $45 million from Roche up front, but a small portion of that amount will be a milestone payment when Prothena moves the drug into Phase I, an event that it expects will happen in the first half of 2014, said CEO Dale Schenk.  Prothena also has a no-cost option, which it can exercise prior to approval, to co-promote PRX002 in the U.S. Costs, revenues and profits will be divided 70-30 between the partners, with Roche assuming the larger burden and reaping the larger bounty. Prothena has been looking to out-license PRX002 in order to concentrate on some of the compounds it is targeting for diseases in smaller populations. Roche traditionally has been strong in central nervous system diseases, but, as with other parts of its business, it has moved away from large-population conditions treated largely by primary care doctors, such as depression, to more complex CNS disorders, treated by specialists.- Wendy Diller

Biogen Idec/Proteostasis: Already no stranger to Alzheimer’s disease treatments, Biogen Idec has licensed another program showing promise in neurodegenerative diseases including Alzheimer’s and Parkinson’s. In a Dec. 9 deal, the biopharma disclosed a new partnership with Proteostasis Therapeutics to study and develop therapeutics inhibiting the enzyme ubiquitin specific peptidase 14, or Usp14. It’s believed that blocking Usp14 modulates proteasome activity and thereby speeds up degradation of toxic proteins such as alpha-synuclein in Parkinson’s and tau in Alzheimer’s, potentially spelling a disease-modifying approach. The deal includes research funding and potential development and commercial milestones totaling $200 million, as well as tiered royalties. The partners will jointly pay for and conduct preclinical research to identify lead compounds for clinical development. At undisclosed, pre-specified development points, Proteostasis will have the option to receive milestones or exercise an option for global co-development and co-commercialization rights. In addition, Biogen Idec is making an equity investment in Protestasis of undisclosed size. Biogen Idec already has Phase Ib anti-beta amyloid antibody candidate BIIB037, which could be moved directly to Phase III as soon as 2015 if trial data are strong enough, SVP of Neurology Al Sandrock said at Deutsche Bank’s BioFEST Conference in early December.  Cambridge, MA-based, privately held Proteostasis is backed by HealthCare Ventures, Fidelity Biosciences, New Enterprise Associates, Novartis Option Fund and Genzyme Ventures. - Stacy Lawrence

Retrophin/Kyalin/Novartis: Retrophin is making good on its plan to expand beyond its initial focus on ultra-rare diseases. On Dec. 12, it announced an agreement to acquire San Diego-based Kyalin Biosciences for an undisclosed sum. Kyalin’s lead asset carbetocin, a synthetic, nasally administered formulation of the hormone oxytocin, is in Phase I for symptoms of autism. On the same day, Retrophin made good on an August announcement that it would license in a drug to treat autism and schizophrenia from an unnamed major pharmaceutical company. The mystery licensor is Novartis, and the asset is Syntocinon (oxytocin), another synthetic, nasally delivered form of the same drug. Retrophin paid $5 million upfront plus undisclosed milestones and royalties for an exclusive U.S. license. Novartis had marketed the drug in the U.S. to assist with initial postpartum milk ejection, but discontinued it in 1997 for commercial reasons. The proceeds from a $25 million PIPE financing in August helped pay for the transactions. The licensing of Syntocinon also gives Retrophin a market-ready prescription treatment addressing a lactation deficiency for which there are no current therapies. Retrophin plans to re-launch it for that indication in the second quarter of 2014, providing an immediate, if likely small, revenue stream. As for the decision to double down on oxytocin, CEO Martin Shkreli said while Syntocinon is FDA approved, carbetocin is far behind in the clinic. “It might never be approved,” he said, “but it has superior qualities [to Syntocinon]. For instance, it’s longer-acting. So, there is a rationale to replace one with the other over time.” He added that there is a considerable amount of applied research and clinical experience behind the use of oxytocin in autism and schizophrenia. - Michael Goodman

GlaxoSmithKline/Inserm Transfert: Continuing a busy year of collaborations, the French National Institute for Health (INSERM) signed a worldwide licensing agreement Dec. 11 with GlaxoSmithKline to investigate the use of immune-checkpoint molecules in cancer treatment. GSK will pay Inserm Transfert, the tech-transfer subsidiary of INSERM, an undisclosed upfront fee with the possibility of development milestones and sales royalties. The pharma gets rights to develop and commercialize monoclonal antibodies that modulate the inducible T-cell costimulator (ICOS) protein, which offers the potential to enhance anti-tumor immune response. The agreement is part of a larger, long-term strategic alliance between INSERM and GSK. The collaboration “is making progress and illustrates a shared vision by GSK and Inserm Transfert that successful development of new drugs requires proactive action and alignment from both sides,” Inserm Transfert Executive VP, Head of Business Unit Open Innovation Augustin Godard said in a release. - Joseph Haas

Crealta/Savient: Start-up Crealta Pharmaceuticals will buy the gout drug Krystexxa (pegloticase) and other assets of troubled Savient Pharmaceuticals following an auction in bankruptcy court, the firms announced Dec. 11. Crealta will pay $120.4 million for the assets, marking its first significant investment toward becoming a specialty pharmaceutical company. Private-equity firm GTCR formed Crealta in August in partnership with Crealta’s CEO, Ed Fiorentino, and said it would invest up to $200 million to support the company. It’s the second company launched by Fiorentino and the PE firm. The two established Actient Holdings LLC in March 2009 and developed it into a diversified specialty pharmaceutical company through a series of five acquisitions, with GTCR providing a similar initial $200 million investment. Urology specialist Auxilium Pharmaceuticals acquired Actient earlier this year for $585 million upfront plus contingency payments. Now GTCR appears to be following a similar playbook in hopes of another successful exit, though turning around Krystexxa will take some effort. The drug was approved in 2009, but never achieved its perceived potential, challenged by Savient’s poor commercial planning and a market dominated by low-cost generic allopurinol. Savient never regained its footing after failing to sign a marketing partner for Krystexxa, and despite several leadership changes and a cost-reduction program, sales of the drug never led Savient into the black.- J.M.

Thanks to Flickr user ah zut for the lovely shot of one of our favorite coastlines, reproduced under Creative Commons license.

What If Deals Of The Week Had A Party And Nobody Showed Up?

What if they had a week and no biopharma deals happened? We’re not quite at that point but it has been slow-going, to put it mildly, on the deal-watching front.

Did everybody go on vacation all at once? Well, your trusty correspondent got back from his time off about two weeks ago and Deals of the Week has a schedule to keep. Let’s see what activity we can find.

There have been a few deals the week of Aug. 19, although none of the blockbuster sort or even all that close (see below). In fact, deal rumors may have outnumbered actual signed deals this week – they certainly set more tongues wagging. The biggest news in business development and M&A likely was renewed speculation that rare disease specialist Shire might be a buyout target for big pharma. The rumor gained in plausibility coming on the heels of Perrigo’s $8.6 billion acquisition of Elan on July 29 for the primary purpose of benefiting from Irish tax laws.

Focused on over-the-counter products, nutritionals and generic drugs, Perrigo bought out Elan largely for its appealing tax structure, as well as the royalties it earns from multiple sclerosis blockbuster Tysabri (natalizumab). Because Perrigo is merging with Dublin-based Elan, rather than just moving to Ireland, the new combined company will be able to take advantage of that country’s tax rates, which are considerably lower than those in the U.S.

On Aug. 15, Perrigo held its first earnings call since the transaction, saying that its expectations for increased global business are expected to offset slowing U.S. revenues in its OTC business. The company reported overall record net income of $967 million for its fourth quarter, a 16% increase from the year-ago period, and income of $3.5 billion for its fiscal 2013, which ended on June 30, a 12% increase from 2012.

While sales for its consumer health care business, which includes OTC drugs and pet-care products, grew 16% to $562.4 million for the quarter, Perrigo executives said during the call that sales in some OTC categories are slowing, a trend that likely will continue. Perrigo’s nutritionals sales, comprising supplements and infant formula, reached $150 million, an 11% increase year-over-year, with all categories within the segment growing and new product sales reaching $7 million.

It’s unclear whether Bristol-Myers Squibb, said to be reprising its interest in acquiring Shire, would be looking for tax advantages – Shire is headquartered in Ireland, as well, but also maintains corporate offices in Philadelphia and Cambridge, Mass.

Industry analysts on Wall Street and in London have said the pharma’s main interest might be Shire’s business model of producing and selling high-priced drugs for small specialist populations that discourage generic competition because they are hard to make and extremely targeted. However, if Bristol bought Shire, Irish tax rates would apply to any existing Shire products sold by Bristol and it likely could use the Irish rate on future products of its own, resulting in a reduced, blended tax rate for its overall business.

Shire has pursued an interesting business development strategy, using small to mid-sized acquisitions, particularly of companies with late-stage or commercial assets, to transform itself. The centerpiece of this strategy was the 2005 buyout of Transkaryotic Therapies that led to the establishment of its growing Human Genetic Therapies division and became a primary competitor to Sanofi’s rare-disease subsidiary Genzyme.

In an effort to build a franchise around bio-engineered skin-substitute product Dermagraft, Shire bought out Advanced BioHealing for $750 million in 2011, but to date that deal has not succeeded greatly in growing the Regenerative Medicines unit. On July 25, Shire announced that sales of Dermagraft, the primary motive for the acquisition, declined 57% to just $22 million during the second quarter.

Overall, however, the company reported sales growth of 7% during the quarter and said it was on track for double-digit full-year sales growth as it had projected.

Recently, it was reported that Shire has hired Lazard as a financial investor to assist it if a hostile takeover bid emerges. Bristol reportedly was going to offer nearly $17 billion to purchase Shire this past May. Shire’s share price has been trending up lately, nosing over the $100 mark on July 11 and continuing to incline. The stock closed trading Aug. 21 at $114.02, undoubtedly helped by the new rumors of possible takeout interest.

While DOTW waits for that potential story to percolate, we point you to these actual transactions that occurred over the past week:

Shire/Santaris: Meanwhile, Shire transacted some actual business, announcing an extension Aug. 23 of its strategic alliance with Santaris Pharma to discover and develop RNA-targeted therapies for rare diseases. Specific financial terms were not disclosed. Under the original deal, signed in 2009, Santaris has been using its proprietary Locked Nucleic Acid (LNA) platform to discover and begin development of preclinical oligonucleotides against rare genetic disorder targets selected by Shire. Shire paid $6.5 million upfront for access to the technology along with research funding and $13.5 million for completion of early studies in the original deal, which specified five targets. Santaris also was eligible for up to $72 million in milestones for each program, plus sales royalties on any product reaching the market. The revised deal adds an undisclosed number of additional targets to the collaboration. Santaris gets upfront cash and research funding, and again can earn milestones and royalties if a product derived from the target research gets to market. As with the initial agreement, Shire holds worldwide development and commercialization rights to any resulting compounds.

Adimab/Celgene/Innovent: Less than a month after antibody-engineering firm Adimab signed a pair of non-exclusive R&D partnerships with GlaxoSmithKline and Biogen Idec, the New Hampshire biotech struck again, announcing a pair of deals Aug. 20. This time, Adimab has signed discovery partnerships with Celgene and Innovent, again to generate therapeutic antibody candidates against multiple targets. The July deals brought Adimab’s total to 19 partners, including a “who’s who” of big pharma and big biotech, and the company said it expects to sign at least three tech-transfer deals a year through 2015. However, the deals with GSK and Biogen transferred non-exclusive rights to Adimab’s antibody discovery and protein-engineering platform, giving them expanded use of the technology beyond prior tie-ups with the biotech. In the Celgene agreement, Adimab will use the platform to generate antibodies against multiple, undisclosed therapeutic targets. Adimab receives an undisclosed upfront payment, while Celgene will have the option to develop and commercialize all antibody candidates resulting from the collaboration. For any candidate that Celgene options, Adimab will receive a licensing fee and be eligible for clinical milestones and royalties on product sales. Meanwhile, Adimab and China-based Innovent will partner on a single program to discover, develop and commercialize an antibody-based therapeutic against an undisclosed target. Innovent will coordinate all initial product development, including manufacturing and clinical trials. Each company will retain the right to develop and commercialize any resulting drug candidate in its respective geographic territories. Innovent will hold those rights in China, while Adimab retains U.S., European and Japanese rights to the program. Innovent will compensate Adimab for discovery and optimization of therapeutic leads, while Adimab will reimburse Innovent for specific development costs.

Evotec/Jain Foundation: Germany’s Evotec AG, a drug-discovery alliance and development partnership company, and the Jain Foundation announced Aug. 21 that they have extended and expanded their research collaboration in skeletal muscular dystrophy diseases. No financial details were disclosed. Based in Bellevue, Wash., Jain is a privately funded foundation whose goal is to cure muscular dystrophies caused by deficiency of dysferlin protein. In a release, foundation CEO Plavi Mittal said the collaboration is moving toward the screening of compound libraries with Evotec. “This is an important step toward accomplishing our mission of finding a therapy for Limb-girdle muscular dystrophy type 2b/Miyoshi Myopathy,” he said. Earlier this year, Evotec partnered with Harvard University to identify and develop a new class of small-molecule inhibitors of bacterial cell wall synthesis. Evotec is applying its drug-discovery technologies and expertise toward developing anti-bacterial agents that target peptidoglycan biosynthesis, while the university brings assays, anti-bacterial chemical starting points and x-ray crystallography tools to the collaboration.

Mount Sinai Medical Center/Exosome Diagnostics: Mount Sinai Medical Center (NY)’s Icahn School of Medicine is collaborating with Exosome Diagnostics Inc. on research and development of real-time nucleic acid-based body-fluid diagnostics to advance personalized medicine in areas such as oncology and inflammation. From the work, Exosome anticipates pursuing commercial development of potential in vitro diagnostics. Under the five-year collaboration, Mount Sinai researchers will get early access to Exosome technology for use in targeted molecular research, the two New York-based organizations said Aug. 21. The Exosome technology enables real-time capture of genetic biomarkers that are responsible for disease directly from blood, urine and cerebrospinal fluid without need for a tissue biopsy. The medical center will retain rights to molecular biomarkers associated with disease progression and drug response under the agreement, while Exosome will get commercial development rights to any molecular in vitro diagnostic products that may result from the collaboration.

Photo credit: Wikimedia Commons

Deals Of The Week: A Feeding Frenzy Over ROR Gamma T Modulators?

A little-heralded deal between Amgen and Japan’s Teijin Pharma  July 31 marked the sixth since 2009 around compounds that modulate the ROR (retinoic acid-related orphan receptor) gamma t pathway, offering potentially a new small-molecule approach to addressing multiple autoimmune indications.

Drugs that hit RORγt might be able to modulate differentiation and regulation of Th17 cells, which play a role in inflammation related to many autoimmune disorders. It’s not just that the RORγt space has been fairly busy – a look at the names of the companies working in this arena indicates significant investment and potential. Bristol-Myers Squibb, Merck & Co., Pfizer and Johnson & Johnson all have made deals with smaller companies around RORγt assets in recent years.

A seventh deal could be looming as well, as Vitae Pharmaceuticals currently is considering partnering its lead-op stage RORγt inhibitor program. CEO Jeffrey Hatfield recently told “The Pink Sheet” that Vitae’s early data are being reviewed by roughly one-dozen potential partners and the company is looking to announce a deal, if it decides to make one, in September or October.

“Those [prior RORγt deals] seem to us to have been done in very early stages of discovery,” he said. “They were not particularly big deals, and there wasn’t a lot of buzz around the work done by the biotechs before the deals were announced. The sense I get from other companies is that the state of the art is not very advanced.”

Hatfield said the interest he has seen in his program, including one term sheet that came in before Vitae reached preclinical proof-of-concept, suggests RORγt is becoming one of those “hot spaces” that almost every player wants a part of.

“Everybody wants a program,” the exec asserted. “There just aren’t enough programs to possibly go around to meet demand.” Beyond MS and RA, Hatfield suspects RORγt modulation might have potential in psoriasis, ankylosing spondylitis and irritable bowel disease. Ultimately, he thinks targeting RORγt might enable modulation of a broader range of pro-inflammatory cytokines than currently is possible with anti-TNF drugs such as fusion protein Enbrel (etanercept), monoclonal antibody Humira (adalimumab) or MS treatment Tysabri (natalizumab).

Amgen and Teijin announced their collaboration on July 31, a discovery, development and commercialization agreement that would give Amgen worldwide rights except for Japan to compounds discovered in the joint R&D collaboration. Teijin, which gets an undisclosed upfront payment along with potential milestones and royalties, would retain marketing rights in its home market and also hold the right to co-promote any resulting products in select Asian markets.

Deal-making around this target kicked off in Japan when Japan Tobacco and San Diego’s Orphagen Pharmaceuticals announced a partnership in January 2009 aimed at inhibition of Th-17 cells to treat psoriasis. Then, in October 2010, Bristol in-licensed preclinical TGR5 agonist XL475 and discovery-stage RORγt inhibitors from Exelixis. The South San Francisco, Calif., biotech received $35 million upfront for XL475 and another $5 million upfront for the RORγt program.

Two more deals followed in 2011: First, Merck signed a collaboration with Lycera in March to co-discover autoimmune disease candidates based on the Michigan biotech’s RORγt research. Lycera, which received $12 million upfront, triggered the first milestone under the agreement in December of 2011 – total deal-related milestones could reach $295 million. As a possible indication of Merck’s assessment of Lycera’s technology, the two companies signed a second autoimmune R&D deal in February of 2013.

In December 2011, Pfizer signed an R&D pact with Karo Bio to discover and develop RORγt modulating compounds. This deal brought the Swedish biotech an undisclosed upfront payment – the companies revealed publicly that Karo Bio could earn up to $217 million in combined upfront cash and milestones, along with potential royalties, while Pfizer would fund all of the R&D work.

Prior to the Amgen/Teijin transaction, the most recent RORγt deal involved J&J’s Janssen Biotech licensing exclusive rights to a set of molecules discovered by Phenex Pharmaceuticals. The German company can earn up to $135 million in upfront cash and development and regulatory milestones under the December 2012 pact, along with sales milestones and royalties.

It was an extremely active week for deal-making outside the RORγt space as well, as July melted into August. Most noteworthy were Perrigo’s acquisition of Elan Corp. along with Cubist Pharmaceuticals’ two buyouts, of Optimer Pharmaceuticals and Trius Therapeutics. For the other highlights, read on as we unveil ...

Perrigo/Elan: By buying Dublin-based Elan, Perrigo of Allegan, MI, will re-domicile itself in Ireland where the corporate income-tax rate is a low 12.5%, offering fertile soil for international growth. The purchase also will give Perrigo access to royalties for the multiple sclerosis drug Tysabri (etanercept), which Elan discovered and then sold to Biogen Idec on Feb. 6. 2013. Elan began looking a buyer this year after Royalty Pharma tried to acquire it. The deal, announced July 29, ends a bitter takeover saga in which Elan rejected three hostile bids by Royalty Pharma and management clashed with shareholders about strategy. Perrigo, which manufactures over-the-counter pharmaceutical products for the store-brand market and has a market value of about $12 billion, will pay $6.25 per share in cash plus $10.25 per share in stock, a premium of about 10.5 percent over Elan's closing price on July 26. “We believe this transaction is compelling for Elan shareholders and fully takes into account the value of Elan’s assets, including a large cash balance and a double-digit royalty claim on Tysabri, a blockbuster product that generated revenues of $1.6 billion last year and has been growing at a compound annual growth rate of 19%,” Perrigo CEO Joe Papa said. - Sten Stovall




Cubist/Optimer/Trius: Antibiotics marketer Cubist Pharmaceuticals made a pair of moves July 30 that complement its hospital-based antibiotic franchise, acquiring current partner Optimer Pharmaceuticals and clinical-stage anti-infectives developer Trius Therapeutics.The simultaneous, all-cash deals will cost Cubist at least $1.24 billion by the end of 2013, when they’re expected to close. Cubist will pay $10.75 per share, or $535 million, upfront for Optimer, and $13.50 per share, or $707 million, upfront for Trius. The upfront payments represent a 15% premium over San Diego-based Trius’ July 30 closing price, but a 19% discount to Optimer’s July 30 closing price. Yet the upfront prices may not be the acquisitions’ final values. Both deals include contingent value rights which could deliver substantial additional returns to the acquired companies’ shareholders, and are based on the net sales performances of their key drugs. Peak sales for both therapies in territories that belong to Cubist could run between $600 million and $1 billion, Cubist management estimated. They expect the deal to be accretive starting in 2015. Optimer currently sells Dificid (fidaxomicin) in the U.S. and Canada to treat diarrhea associated with Clostridium difficile infections. If the drug generates $250 million in net sales by the end of 2015, Optimer’s shareholders would receive an additional $3 per share. If sales reach $275 million or $300 million, they would receive $4 or $5 per share, respectively. That could drive the deal’s overall value as high as $801 million. Trius has the Phase III drug tedizolid, also known as TR-701, for Gram-positive and other bacterial infections. Its shareholders would receive an additional $1 per share if tedizolid produces $125 million in net sales during 2016, and up to another $1 if it sells between $125 million and $150 million that year, delivered on a pro rata basis. The buyout could be worth $818 million in total if the CVR is realized fully. - Paul Bonanos

AstraZeneca/Fibrogen: Privately held FibroGen already had a territorial partner in Astellas Pharma for its late-stage anemia drug FG-4592. Now, the San Francisco-based company has teamed with AstraZeneca to share rights to the drug in other major markets. The new deal covers the U.S., China and other unspecified territories, not including those in which Astellas already holds rights: Europe, the Commonwealth of Independent States, the Middle East and South Africa. AstraZeneca and FibroGen say they’ll collaborate to promote the drug. AstraZeneca will commercialize the drug in the U.S., although FibroGen will promote it in end-stage renal disease patients. In China, FibroGen will handle the regulatory process, manufacturing and medical affairs, while AstraZeneca will take the lead on promotion and distribution. The British pharma paid $350 million upfront, including non-contingent short-term payments, for rights to the candidate. Developmental milestones could add $465 million to the deal, while unspecified sales milestones could further add value. If the drug is approved, AstraZeneca will also owe FibroGen royalties in the “low 20% range,” according to a joint statement. FG-4592 induces red blood cell production, or erythropoiesis, by inhibiting a protein called hypoxia-inducible factor, thereby mimicking the body’s natural response to high altitude. Well-funded start-up Akebia Therapeutics has a Phase III-ready HIF inhibitor, while GlaxoSmithKline has a Phase II candidate. FibroGen also has FG-3019, a Phase II connective tissue growth factor inhibitor that has shown promise in idiopathic pulmonary fibrosis, liver fibrosis due to hepatitis B and pancreatic cancer. - P.B.

Actelion/Ceptaris: Actelion Pharmaceuticals' options deal to acquire Ceptaris Therapeutics is a small, but important and relatively risk-free step in the biotech’s efforts to diversify away from its heavy reliance on its highly successful treatment for pulmonary arterial hypertension, Tracleer (bosentan). On July 31, Europe’s largest biotech announced that it is paying $25 million upfront for an option to buy Ceptaris, contingent upon the latter’s receiving FDA approval for its only asset, Valchlor (mchlorethamine gel). Valchlor’s PDUFA date is Aug. 27. If Valchlor gets a regulatory green light, Actelion will pay Ceptaris investors an additional $225 million, plus undisclosed commercial and sales-based milestones. Actelion’s internal R&D track record is mixed, leaving its near-term diversification strategy highly dependent on efforts to launch a next-generation PAH treatment, macitentan. Macitentan’s NDA is pending before FDA, with a PDUFA date of Oct. 19, and it also awaits EU authorization. In the meantime, the Swiss firm sees Ceptaris as a way to obtain an asset that is “meaningfully differentiated,” rapidly accretive and focused enough so that it will not distract from the effort around macitentan, said Actelion SVP Roland Haefeli. Valchlor, if successful, will be the only FDA-approved topical formulation of mechlorethamine for treatment of early-stage mycosis fungoides-type cutaneous T-cell lymphoma, a rare form of non-Hodgkin’s lymphoma. - Wendy Diller

Kolltan/MedImmune: Cancer-focused Kolltan Pharmaceuticals in-licensed a monoclonal antibody targeting the HER3 receptor tyrosine kinase from MedImmune, the global biologics arm of AstraZeneca, on July 29. Financial terms were not disclosed but privately held Kolltan said in a release that both companies have the potential for future cost-, risk- and profit-sharing arrangements related to the antibody after the New Haven, CT-based biotech completes early clinical testing. Based on the candidate’s current status, Kolltan expects to initiate a Phase I study of the antibody during the first quarter of 2014. - Joseph Haas

Celgene/Array: In its second licensing arrangement of the month, Array BioPharma signed a strategic collaboration with Celgene July 29 focused on a preclinical development program targeting an undisclosed novel inflammation pathway. Boulder, CO-based Array gets $11 million upfront, while Celgene obtains an exclusive option for multiple potential clinical development candidates under the deal. In addition to the upfront, Array can earn total development, regulatory and sales milestones of up to $376 million as well as royalties. It will retain all rights to programs that Celgene does not select. Previously, on July 10, Array licensed an undisclosed preclinical oncology compound and related intellectual property to Aisling Capital-backed start-up Loxo Oncology. Array got an ownership stake in the new company under that deal, as well as potential for up to $434 million in milestones and royalties. - J.A.H.

Bristol/Samsung: Bristol and South Korea-headquartered Samsung BioLogics inked a 10-year agreement July 29 under which Samsung will manufacture a commercial antibody cancer drug at its new plant in Songdo Incheon, South Korea. Financial terms were not disclosed. In a release, Bristol said technology transfer and trial production began in July, while commercial production will start once regulatory approval is obtained. In a statement, Louis Schmuckler, Bristol president, global manufacturing and supply, said the arrangement is part of the pharma’s focus on establishing long-term relationships with quality manufacturing partners worldwide. “This agreement increases our biologic manufacturing capacity to help ensure sufficient long-term supply of our commercial products,” he said. - J.A.H.


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Deals of the Week Gets Better Connected, Dips A Toe In Digital Health

Digital health is a bit of a catch-all. It encompasses everything from inexpensive exercise- and diet-recording gadgets to sophisticated multimillion dollar disease management systems, online pharmacies and website-based behavioral therapies. Truth be told, this DOTW correspondent, like many pharma execs, has always put the drugs first.

But there's no denying the clamor of expert opinion claiming digital health will be a powerful disrupter of health care markets in the future, potentially transforming pharma and device companies into service providers. "Digital health is going to happen, it may take time and will advance in fits and starts, but it will happen without the help of the establishment," Simon Cook, CEO of VC firm DFJ Esprit, told the London meeting of the Digital Health Forum, DHF13, earlier this month. "Nine out of 10 digital health businesses will fail, but a few will succeed and change the health care system." DFJ has investments in biopharma companies like Kiadis Pharma and Oxford Immunotec, as well as the internet nutritional company, Graze.

The transformation is coming faster now than two or three years ago, Cook said, because of the increasing pressure on individuals to take control of their own health, coupled with the increasing pervasiveness of smart phones and apps, making people comfortable with digital technology.

The investment community also is more engaged. Low-capital intensity business models are starting to emerge for digital health companies and are "incredibly compelling" for venture capitalists, said Alex van Someren, managing partner of seed funds at Amadeus Capital Partners. Amadeus, along with Archimedia Investments, put £1.6 million ($2.4 million) into the health care cloud platform, Qinec, in November 2012, and took part in May 2013 in a £2 million financing round for TrialReach, a company trying to improve patient awareness of clinical trials.

But small investment rounds, which characterize the digital health sector, often slip below the radar, or are not disclosed publicly, leading to a lack of comprehensive information about deal flows and valuations.

In the increasingly hot area of patient engagement and consumer health, much of the attention devoted to digital health has focused on continuous health monitoring followed by instant intervention via 24/7 connectivity. Innovators have focused on the concept for years, progressing slowly, but newcomers say they're at a turning point. U.K-start-up CellNovo, backed by investors and VCs to the tune of more than $40 million, is one of a slew of companies trying to address this challenge, and believes it is the most advanced in the diabetes sector.

Cellnovo has developed algorithms and software which allow physicians to monitor patients remotely in a sophisticated manner not seen with other company's systems. It anticipates a commercial launch of its digitally interconnected blood sugar monitor, insulin patch pump and exercise diary later this year, said Executive Chairman Eric Beard.

The theory that digital tools can improve the quality of care while saving money is exactly what the US and other countries are striving for as they work to reform their health care systems. In that sense, digital health tools are aligned with systemic priorities, and its benefits have not gone unnoticed by pharmaceutical companies as they and others try to grapple with harsh demands. Johnson & Johnson's business unit, Janssen Healthcare Innovation (JHI) is accelerating J&J's change from a product-centric to a health care solutions company. The company has noticed digital health start-ups often struggle to scale-up, and intends to offer master classes to European entrepreneurs in business development, to enhance the digital health ecosystem, in collaboration with partners.

But while we await the detonation of digital disruption, pharma and biotech have continued to forge deals and agreements, as we unveil ...

AstraZeneca/Roche: AstraZeneca and Roche are teaming up in a medicinal chemistry data-sharing collaboration with the aim of accelerating drug discovery. The deal announced June 26 is a sign big pharma may be more willing to work together in the pre-competitive space to improve the pace of drug development than in the past. Under the arrangement,  the two companies will use a technology called matched molecular pair analysis (MMPA) to identify chemical modifications that can be applied to each company's individual compounds to improve metabolism, pharmacokinetics or safety. The aim is to identify potential new drug candidates faster by using their combined databases of experimental results. Roche and AstraZeneca are committed to making the data generated by the program available to the broader research community, and are open to additional drug manufacturers joining the collaboration. The data-sharing will be managed by MedChemica, an expert in MMPA technology. - Jessica Merrill

MorphoSys/Celgene: Germany's MorphoSys has forged a potentially transformative alliance with Celgene, under which the latter receives worldwide rights to MorphoSys' CD38-targeting antibody, MOR202. The product, which is in Phase I/IIa trials in multiple myeloma, is believed to be Celgene's first clinical-stage antibody for the disease, a therapeutic area it dominates. In return for the rights, MorphoSys receives an upfront fee of $92 million, and Celgene will purchase $60 million worth of shares in MorphoSys at a premium of at least 15% to the biotech's closing share price of $37.06 on June 26. MorphoSys also will receive development, regulatory and sales milestones, plus double-digit royalties outside of a co-promotion territory in Europe, the companies announced June 27. The deal gives the partners the financial firepower to speed MOR202 to the market, while potentially broadening its indications beyond multiple myeloma. - John Davis

Aspen/Merck: South Africa's Aspen Pharmacare Holdings, the largest generics drug firm in Africa, continued its geographic, manufacturing and portfolio expansion efforts in a complex deal valued at more than $1 billion with Merck, roughly one week after revealing it hopes to acquire two mature thrombosis drugs and a manufacturing site from GlaxoSmithKline. For approximately $600 million, Aspen will buy a portfolio of 14 drugs from Merck and acquire active pharmaceutical ingredient manufacturing and related sales sites in the Netherlands and the U.S. In the deal, Aspen will get the Boxtel site in the Netherlands as well as part of two other API plants in that country, along with a manufacturing site in Iowa. Sales offices in the Netherlands and Illinois also will be included in the package. News surfaced June 18 that GSK is mulling an offer from Aspen to purchase Arixtra and Fraxiparine, which generated aggregate sales of $670 million in 2012, as well as a manufacturing site in France. - Joseph Haas

Cytokinetics/Astellas: Cytokinetics has signed a two-year research collaboration including rights to its skeletal muscle activator CK-2127107 with Astellas Pharma. The deal, announced June 25, is the second Cytokinetics has signed in two weeks, extending the company's cash runway and providing financial flexibility to carry on with the development of its lead drug tirasemtiv independently. Like '107, tirasemtiv is a skeletal troponin muscle activator, currently being tested in a Phase IIb clinical trial in patients with amyotrophic lateral sclerosis; data are expected by the end of the year. The license for '107 to Astellas is for non-neuromuscular disorders. The development plan encompasses potential indications like cachexia and sarcopenia. The deal does not exclude the potential to study other skeletal activator mechanisms that may emerge from the research in neuromuscular indications. Cytokinetics will receive $40 million initially from Astellas, including a $16 million upfront payment and $24 million in R&D reimbursement over the first two years of the collaboration. The biotech stands to receive as much as $450 million in development and commercial milestones, as well as royalties on any drugs emerging from the collaboration. Cytokinetics announced an expanded collaboration with Amgen June 12, under which it received $25 million upfront in exchange for giving Amgen rights to the heart failure candidate omecamtiv in Japan; the two already are partnered in other parts of the world - JM

Seattle Genetics/Bayer/Agensys: Antibody-drug conjugate specialist Seattle Genetics executed its seventh partnership since the start of 2009 around its auristatin-based ADC technology platform on June 25. This time, the Bothell, Wash., biotech will receive $20 million upfront from Bayer for a multi-target oncology collaboration. Seattle Genetics could earn up to $500 million in milestones under the Bayer agreement, as well as royalties on any products reaching the market. Targets were not disclosed. Bayer will be responsible for all R&D costs, plus manufacturing and commercialization. Seattle Genetics, which brought the first ADC to market for oncology with the 2011 U.S. approval of Adcetris (brentuximab vedotin), now has partnerships with five of the 12 big pharma companies, as well as three Japanese pharma and four biotech firms. In a release, VP of Corporate Development Natasha Hernday said Seattle Genetics has 15 ADCs in clinical development between proprietary and partnered programs, and is in line to earn up to $3.5 billion in milestones and royalties from its strategic partnerships. The biotech also announced June 27 it had taken an option under its 2007 collaboration with Astellas-affiliated Agensys. Seattle Genetics will fund 50% of the future development costs of ASG-15ME, a potential ADC therapy for bladder and lung cancer for which an IND has been submitted to FDA. - JAH

ADC Therapeutics/VivaMab: Swiss-based ADC Therapeutics is adding to its preclinical pipeline of around 10 antibody-drug conjugates by licensing a novel internalizing antibody, VM101, from BioAtla LLC's therapeutic division, VivaMab LLC. The antibody conjugated with a cytotoxic warhead has already shown in vivo efficacy against models of intractable hematological cancers, the companies reported June 24. ADC Therapeutics plans to start pre-IND development of the antibody-drug conjugate immediately for the treatment of a hematological cancer, with San Diego-based VivaMab providing development support and receiving undisclosed milestones and royalties. The antibody binds to antigens on the surface of tumor cells, is internalized and then releases the cytotoxic pyrrolobenzodiazepine payload. The Swiss firm say it intends to move multiple drugs into the clinic over the next three years. Upon successful proof of concept, it will seek to license the antibody-drug conjugates to pharmaceutical companies. - JD

Immunocore/Genentech: Genentech has become the first major partner of the privately held UK biotech Immunocore, which is developing a new class of bispecific therapeutic proteins called ImmTACs. The companies have entered into a research collaboration and licensing agreement for the discovery and development of multiple novel cancer agents, with Immunocore receiving an initation fee of $10-20 million for each program, the companies announced June 27. Immunocore will also receive more than $300 million in development and commercial milestones for each target program, and tiered royalties. The company's lead product, IMCgp100, which is in a Phase I/II clinical trial in patients with late-stage melanoma, is  not part of the deal. ImmTACs consist of high-affinity T-cell receptors linked to an antibody fragment, anti-CD3, which activates the immune system. T-cell receptors can recognize intracellular changes tha occur during cancer or viral infections, and ImmTACs are expected to target and destroy cancer cells without affecting healthy cells. - JD

Tesaro/Myriad Genetics: Tesaro, a three-year-old company focusing on cancer and moving at lightning speed, will use Myriad Genetic's BRCA1 and BRCA2 mutation tests to screen patients for enrollment in Phase III trials for one of its lead drugs, niraparib. The drug, a PARP inhibitor, which Tesaro in-licensed from Merck in 2012, is geared to patients with BRCA1 & 2 mutations who have breast or ovarian cancers. Myriad is the only company offering an FDA-approved version of this test, so the alternative would be to go to laboratories offering home grown versions, but the latter may not be as robust, a downside for inclusion in pivotal trials. Both studies will be initiated in mid-to-late 2013. Tesaro told Robyn Karnauskas, an analyst with Deutsche Bank, that its PARP inhibitor program is its most de-risked development strategy, based on very specific input from EMA and FDA. Women with germline BRCA 1 or 2 mutations have increased risk of developing high-grade ovarian and breast cancers, which are particularly sensitive to PARP inhibitors. Management further believes that the drug may be effective in other indications. - Wendy Diller

Nicox SA/Immco Diagnostics: Nicox, a French ophthalmics company, has entered into an exclusive agreement with Buffalo, NY-based Immco Diagnostics to promote a proprietary laboratory test targeted at early detection and diagnosis of Sjoegren's syndrome, an autoimmune disease that destroys the ability to produce tears and saliva. Under the terms of the deal, Nicox will detail the test to ophthalmologists in North America, to whom patients with the syndrome often present because dry eye is a symptom. Immco will be responsible for processing the test and all regulatory activites and reimbursement. Nicox will receive a majority of revenues generated from the ophthalmologists and has a nine-month option to exercise ex-U.S. commercial rights to the test as well. The disease destroys the exocrine glands that produce saliva and tears. Current diagnostic techniques for Sjoegren's syndrome are only moderately effective and detect disease only at advanced stages. The new test aims to diagnose the disease at earlier stages, when it is more treatable. Dry eye is a primary symptom of the disease, which is chronic, and the test is aimed at helping early diagnosis and more efficient management of it; rheumatologists are also involved in treatment. The test was approved in the U.S. in 2013, with a commercial launch expected in the second half of the year - WD

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Deals Of The Week: A Better Way To Investigate Clinical Trial Investigators?

In tandem with a 10-company effort launched in September to resolve clinical development hurdles, three pharmas are coming together to establish a databank that participants will be able to use to evaluate potential clinical trial sites and investigators. The Investigator Databank initially will be a joint effort of Johnson & Johnson, Merck & Co. and Eli Lilly, but other participants from the non-profit TransCelerate BioPharma initiative are expected to join in eventually.

Andreas Koester, head of clinical trial innovation/external alliances for J&J’s Janssen R&D, said the initiative’s primary goal will be to “avoid redundancy” in paperwork for selecting and approving trial sites and in training clinical trial investigators.

Koester, who will lead the effort, told Deals of the Week that the Investigator Databank should be ready to go by the end of this year. The initial three participating firms already have uploaded their information into the databank but it is behind firewalls for now so none of the companies can access another’s data until the initiative begins. Other companies participating in TransCelerate are expected to begin contributing information by the middle of 2013.

“The R&D team at Janssen came together last year to look at our clinical-trial process and see what could be improved upon and what could be streamlined,” Koester said. “There were some things that needed a common solution and would only work if we teamed up with our peers.”

The databank, which will not include any patient data, is intended to serve as a one-stop repository where key information about trial sites, such as what equipment a site does or doesn’t have and the Good Clinical Practice (GCP) training records of its personnel, can be accessed by any participating company. The expectation is that the jointly provided data will minimize redundacy in much of the site- and investigator-selection process, such as prequalification and CGP training. To aid the effort, each participating company will agree to acknowledge one another’s GCP protocols and work toward an industry standard, Koester noted.

J&J and Lilly were among the 10 pharma companies (Merck was not, however) that announced Sept. 18 the creation of TransCelerate and its five goals, one of which was the centralization of trial site prequalification and training. TransCelerate CEO Garry Neil said the databank’s work will be aligned with the non-profit’s focus on clinical study execution.

“Industry collaboration, including pre-competitive data-sharing, is critical to ensuring continued progress to improve industry-wide clinical trial practices,” Neil said.

Beyond the benefits of time conservation, the databank also is expected to benefit clinical trial quality by making it more feasible for investigators to participate in multiple trials. Koester said that many investigators don’t participate in more than one or two clinical trials because the paperwork tends to be too time-consuming and takes away from time spent with patients. Companies therefore churn through investigators and often have trouble finding more.

“Sharing our investigator databases will help optimize administrative activities by mutually recognizing training and other essential information that is required of our investigators, as well as allow us the ability to include key investigators around the world with whom we have not worked in the past,” said David Detoro, head of global trial management for Merck Research Laboratories. “All of this will help lead to more efficient clinical trial execution – a critical component of getting novel products to patients in a timely fashion.”

While biopharmaceutical companies are finding ways to work together to make clinical trials more efficient, they nonetheless continue competing in the business development world. For the latest examples, check out our latest summary of  …

Forest/Adamas: Adamas Pharmaceuticals and Forest Laboratories are counting on simplification and reduced frequency of dosing to carry Arimenda, a fixed-dose combination of two long-marketed drugs to treat dementia associated with Alzheimer’s disease. Privately held Adamas out-licensed the drug to Forest Nov. 14 in a deal that includes a $65 million upfront payment as well as potential milestone payments and sales royalties. The deal, under which Forest will assume all developmental and commercialization costs for the drug in the U.S. market, brings Adamas a $65 million upfront payment. In addition, Adamas could earn up to $95 million in development and regulatory milestones, as well as royalties on net sales beginning five years after U.S. launch of the memantine/donepezil combo product. Arimenda is a fixed-dose combination of extended-release memantine (Forest’s Namenda XR) and immediate-release donepezil (Eisai/Pfizer’s Aricept), which Adamas was developing using its own extended-release technology. However, Forest, which has been working to ameliorate a looming patent cliff as Namenda and antidepressant Lexapro (escitalopram) lose exclusivity, bought out U.S. rights to Arimenda with a plan to use its own proprietary extended-release memantine formulation in the product. That formulation, combined with several Adamas patents, will give the new product patent protection into 2029 and could help Forest extend the life of its franchise. It’s unclear if Forest intends to use the Arimenda brand name. – Joseph Haas

Colby/MannKind: Small, privately held Colby Pharmaceutical has built a portfolio of clinical-stage assets, focused mainly in cancer, in the last year through in-licensing and acquisitions. The most recent of three transactions is a licensing deal with MannKind, announced Nov. 13. Colby acquired worldwide rights to develop and commercialize disease-specific antigen compounds and intra-lymph node delivery technologies from MannKind’s novel MKC1106 immunotherapy programs, currently being studied for the treatment of melanoma, prostate cancer and hematological disorders. In exchange, Colby agreed to pay $140 million in upfront and potential milestone payments to MannKind. The San Jose, Calif.-based company plans to further develop the MKC1106-MT regimen in a Phase II melanoma trial. It is the most advanced intra-lymph node injection regimen from the program, and also plans to study the technology with its lead compound, the cancer adjuvant JVRS-100, a cationic lipid-based immune activator, and eventually with other adjuvants that might be in development outside the company. The partnership with MannKind is one of three deals Colby has completed since September 2011. At that time, Colby acquired worldwide rights to the lipid-based immune activator JVRS-100 from Juvaris BioTherapeutics, along with the company’s broader technology platform, called cationic lipid-DNA complex. Colby also acquired Othera Pharmaceuticals in September, obtaining a portfolio of small-molecule compounds for Nrf-2 regulated diseases characterized by oxidative stress injury. – Jessica Merrill

Pernix/Cypress/Hawthorn: Houston-based specialty drug manufacturer Pernix Therapeutics Holdings announced a deal to acquire generic drug maker Cypress Pharmaceuticals and its subsidiary Hawthorn Pharmaceuticals, a branded business, on Nov. 14. Under the terms of the agreement, Pernix will pay $68.5 million upfront in cash along with $12.5 million in equity. A delayed payment of $10 million will be paid out in December 2013 and the final $10 million will be paid in milestone payments, the triggers of those milestones were not disclosed. Cypress and Hawthorn are privately held companies founded in 1993 and based in Madison, Miss. They are expected to report out revenues of about $50 million in 2012. More than half of the company’s sales come from generic products including cough and cold medications, nutritional supplements, analgesics, urinary tract remedies and women’s health treatments. The remaining 46% of revenues were brought in by the branded side of the business under the Hawthorn name, which includes pharmaceutical products for allergy, respiratory, iron deficiency, nephrology and pain management. The acquisition is expected bring Pernix’s 2013 revenues to a range of $135 million to $145 million. The deal also will have synergies with the last acquisition Pernix made – its $4.9 million acquisition of Houston-based contract manufacturer Great Southern Laboratories in July. – Lisa LaMotta

Foundation Medicine/AstraZeneca/Ariad: Cancer genomic analysis play Foundation Medicine announced a pair of partnerships Nov. 12-13, bringing its number of disclosed partnerships to seven this year. Financial details weren’t disclosed for either deal. The AstraZeneca collaboration is a multi-year tie-up in which the partners will work to identify alterations in cancer-related genes to help predict patient response or resistance to targeted therapies. AstraZeneca hopes to use the information to aid drug development. Foundation Medicine also was granted right-of-first-negotiation for developing diagnostics as part of the deal. The Ariad Pharmaceuticals partnership is focused on genomic profiling for a specific candidate, AP26113. The companies will develop genomic profiles of patients in an ongoing Phase I/II trial to treat non-small cell lung cancer and match them to clinical observations on the activity and selectivity of AP26113. The idea is to identify the best patient population for the dual-inhibitor of ALK and EGFR, which could speed development time. Foundation Medicine launched its first product in June, FoundationOne, which enables physicians to identify the molecular alterations involved in a particular patient’s cancer and match them with relevant approved therapies and clinical trials. The firm raised $42.5 million from 10 investors in a Series B financing that closed in September. – Stacy Lawrence

Alnylam/Tekmira: In our “Revised Deal of the Week,” Alnylam Pharmaceuticals has settled a trade-secrets suit brought by partner Tekmira Pharmaceuticals and inked a new licensing agreement that restructures their relationship. The twin actions free Alnylam from a thorny legal problem and enable it to manufacture its own drug candidates. Under the new agreement, Alnylam will make a one-time payment of $30 million to Tekmira to buy out manufacturing obligations so that Alnylam can independently manufacture lipid nanoparticle (LNP) technology for RNA interference (RNAi) therapeutics. In addition, Alnylam said it will make a one-time payment of $35 million related to the termination of prior license agreements and a “significant reduction in milestone and royalty payments” for its lead RNAi programs, ALN-VSP, ALN-PCS and ALN-TTR02. In a Nov. 13 conference call, Alnylam CEO John Maraganore said that over the past year the company has developed internal capabilities and proprietary processes for manufacturing LNP-based products. He noted that Alnylam would be able to manufacture its lead compound ALN-TTRO2, being developed for treatment of transthyretin-mediated amyloidosis, for the start of Phase III trials and expects to supply the drug at least through the early stages of commercialization. Phase II trial data on ALN-TTRO2 are expected in mid-2013 and the pivotal study is to begin by the end of 2013. Tekmira also is eligible to receive an additional $10 million in near-term milestones – a $5 million payment when ALN-TTR02 enters a pivotal trial and a $5 million payment when clinical trials for ALN-VSP begin in China. Tekmira also will receive five additional non-exclusive licenses to develop and commercialize RNAi therapeutics based on Alnylam’s siRNA payload technologies and will pay Alnylam milestones and royalties for these products. – Brenda Sandburg

TG Therapeutics/Ildong Pharmaceutical: Korea’s Ildong Pharmaceutical signed a licensing agreement with TG Therapeutics on Nov. 15 to co-develop and commercialize the latter’s anti-CD20 antibody ublituximab (TGTX-1101) in South Korea and Southeast Asia. MedCI LLC served as licensing advisor and provided assistance to TG Therapeutics, a clinical-stage biopharmaceutical company focused on the acquisition, development and commercialization of treatments for cancer and other underserved therapeutic needs. Under the terms of the agreement, TG Therapeutics is receiving an upfront payment of $2 million in addition to sales-based milestone and royalty payments in exchange for exclusive rights to develop and commercialize Ublituximab for all therapeutic indications in the territory, which also includes Taiwan, Singapore, Indonesia, Thailand, Philippines, Myanmar and Vietnam. TG Therapeutics is developing ublituximab for hematologic malignancies and other B-cell lymphoproliferative disorders. Currently, it is being evaluated in a North American Phase I/II clinical trial in patients with relapsed or refractory non-Hodgkin's lymphoma. – Peter Chang

But those weren't the only deals made during the past business week. Here is a roundup of other business development transactions occurring in the biopharmaceutical arena in the past seven days:

• MedImmune and biOasis Technologies entered an R&D agreement Nov. 14 to investigate the latter's Transcend technology for delivery of compounds to the brain;
• Reckitt Benckiser made a $1.4 billion offer Nov. 15 to buy out Schiff Nutritional, topping an earlier offer from Bayer AG;
• GlaxoSmithKline and Aptuit announced a multi-year expansion of their drug-development partnership in Verona, Italy, on Nov. 13;
• Boehringer Ingelheim and BaroFold signed a non-exclusive license on Nov. 13 to use BaroFold's PreEMT (Pressure Enabled Manufacturing Technology) platform for protein refolding work in BI's drug production; and
• Synthetic Biologics acquired clinical-stage beta-lactamase assets for prevention of Clostridium difficile infections Nov. 12 from Prev AbR LLC.

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