Financings of the Fortnight And the Neverending Venture Round

Somewhere out there, perhaps, is the end of NovImmune's Series B round.

More than a year ago, our friends at START-UP examined the fates of biotechs that had reeled in huge private financing rounds. Giant biotech venture rounds are back with a buzz in 2014 thanks to Juno Therapeutics, which launched in December with a $120 million Series A commitment. Last month it added on with cash from Venrock and Bezos Expeditions, aka Amazon.com chief Jeff Bezos' private money stash.

But in raw coinage, Juno's A round doesn't hold a candle to what NovImmune has raised in its Series B. Novi-who? It's a Swiss antibody developer founded 16 years ago that in 2006 first notched CHF 58 million ($46 million at the time) for its Series B. Eight years and three extensions later, the Series B now stands at CHF 200.5 million, most recently boosted by a CHF 60 million ($67 million) tranche announced February 18 and led by London life science specialists Rosetta Capital, whose partner Jonathan Hepple is joining the NovImmune board.

That makes NovImmune's Series B the largest biopharma venture round with at least one extension raised in the past decade, according to our Strategic Transactions database. FOTF reached CEO Jack Barbut via email, and he said NovImmune has kept the round open this long to create fairness for all shareholders. "This makes the share structure very easy," Barbut wrote. "For employees, common stock options (sweat equity), and for investors, preferred shares, all [have] the same liquidation rights and thus comply with Swiss statutes, which are very stringent on equal treatment for ALL shareholders." 

CEO since 2000, Barbut said when the Series B started, he didn't expect it to carry on this long. He doesn't know if this recent tranche will be the last.

We went back a decade into our Strategic Transactions database to see what kind of precedent there might be for NovImmune. We found 59 private companies whose extended rounds reached at least $50 million. Here are the handful, other than NovImmune, that topped $100 million:

Four of those companies have since gone public and one (Sangart) has gone under, shut down by its main investor, as first reported by Fierce Biotech. Meanwhile, Symphogen is in no hurry to go public, as its CEO told Start-Up in this feature last year.

NovImmune is not only top of the charts for money raised, but it also has no peer in the length of time of the round. None of the companies with blockbuster rounds took more than two years to secure their extensions. A few smaller rounds took longer. For example, Theraclone Sciences began raising its Series B in 2007 as Spaltudaq (we applaud the name change) and brought the total to $50 million about a year ago. Endocyte took five years to raise a nearly $80 million Series C before going public in 2011. And Alvine Pharmaceuticals spent more than four years building its Series A and is now waiting to find out if AbbVie will exercise an option to buy its lead Phase II program in celiac disease or the entire company outright. (If AbbVie does, it would be one of the very few corporate investors to buy out one of its portfolio companies.)

NovImmune's Barbut said his investors expect "some sort of liquidity event" too, of course, but in the nearer term he said the company is focused on finding a partner for NI-0101, its anti-TLR4 monoclonal antibody that has entered Phase I. It would also like to advance its NI-0501 program, an anti-interferon gamma antibody, and commercialize it solo. NI-0501 has orphan status in the US and EU in hemophagocytic lymphohistiocytosis, a deadly pediatric autoimmune disease, and has completed a Phase I study.

NovImmune doesn't seem to have cushioned its cash with a lot of non-dilutive funding. Its biggest deal to date is the outlicensing of an anti-IL17 antibody to Genentech in 2010, no financials disclosed. The candidate completed Phase I in 2013.

So we've got an orphan disease-focused biologics company with multiple, wholly owned clinical assets, a partnership with one top-tier biopharma, and the kind of cash runway that seems to attract more investment these days from the public markets. The IPO market has welcomed every stripe of biotech, from still-preclinical platforms to heavily capitalized specialty plays, in the past year, so NovImmune seems like an inevitable "ask." If its cards are well played -- keep in mind several banks are in NovImmune's investor pool -- an IPO could provide a nice bump for those who didn't have to ride the traditional valuation escalator (or be forced off of it) through later rounds.

We offer a bump, too -- a fist bump to Maureen Riordan, who did much of the work behind the scenes for this column. Without her this week, there would be no...

Melinta Therapeutics: Known as Rib-X Pharmaceuticals until last fall, antibiotic developer Melinta hasraised a $70 million Series 3 round led by existing investor Vatera Healthcare Partners. New investors included Falcon Flight, an affiliate of the Santo Domingo Group, and undisclosed backers. As Rib-X, the firm raised more traditionally named A, B and C rounds last decade. But a failed IPO try in 2011, and a set of new investors led by Vatera, have led to a housecleaning. In November 2012, the company disclosed a $67.5 million "Series 2" funding led by Vatera. Last fall, it unveiled its new name and new executive team, led by CEO Mary Szela. The Series 3 cash will help fund its Phase III study of antibiotic delafloxacin, a differentiated flouroquinolone in testing as an oral, single-dose therapy for uncomplicated gonorrhea. Melinta is aiming for an NDA filing in late 2014. In addition, the money will finance a two-trial Phase III program of delafloxacin in acute bacterial skin and skin structure infections, as well as lead-candidate selection from the firm’s RX-04 discovery program seeking to address serious and life-threatening Gram-negative infections via targeting of novel binding site on the bacterial ribosome. – Joseph Haas

Argos Therapeutics: Immunotherapy is hot, right? Well, yes and no. While the likes of Juno can command above and beyond $100 million in a single financing, cancer and infectious disease immunotherapy play Argos raised a mere $45 million in its February 7 IPO, its second try at launching onto the public markets. And that’s only after it had to dramatically cut the price to $8 a share from a $14 mid-point of its proposed range. It also had to increase the dilution, selling 5.6 million shares rather than the 4.3 million it had proposed. Existing investors bought 1.4 million shares of the IPO, or roughly a fourth of the deal. No word yet if the underwriters will exercise the overallotment, but the share price has largely treaded water since the offering. Argos investors can take some solace knowing the bargain-priced IPOs of 2013 ended up as top performers of the year. What's discounted now might have legs later, as Argos is one of many biotechs with notable clinical milestones in reach this year, as START-UP explored in January. Argos might see a boost later this year when it reports Phase IIb data for AGS-004 for treatment interruption in HIV/AIDS patients, although data due in 2016 -- Phase III survival data in renal cell carcinoma -- is more likely to be game-changing for Argos. The firm also expects this year to start two Phase II HIV eradication studies, one in adults and another in pediatric patients. Argos aims in these trials are ambitious – to eliminate the HIV virus or to reduce it to negligible levels. – Stacy Lawrence

Arrowhead Research: RNAi therapeutic developer Arrowhead said February 19 it grossed $104 million in a follow-on offering, selling 5.5 million shares at $18.95 a piece. Of the several public biotechs that sold $100 million-plus in stock this fortnight -- Ironwood Pharmaceuticals, Macrogenics, PTC Therapeutics and Puma Biotechnology were the others -- Arrowhead's inclusion would have been unthinkable this time last year, when it was bumping along in microcap land and had just a few million dollars in cash remaining. Arrowhead isn't strictly an RNAi developer; it has a peptide-drug conjugate in the clinic, too. But there's no doubt RNA interference, riding a revival of sorts highlighted by Alnylam Pharmaceuticals' giant deal last monthwith Sanofi/Genzyme, is driving the Arrowhead agenda. It's also worth noting that RA Capital, the hedge fund that helped propel the big Dicerna IPO, is also a key investor at Arrowhead as of last spring, having led a $35 million offering at $1.83 a share that recapped the company. With its stock now worth more than 10 times as much (it closed February 20 at $21.90) Arrowhead is pushing hard to get its lead RNAi compound, against Hepatitis B, into Phase II.  While RA, now a 9.9% owner, led a turnover in the company's cap table, it wasn't a bloodbath. Arrowhead's longtime CEO Chris Anzalone is still at the helm, and the board remains the same. – Alex Lash

Pronutria: Pronutria revealed February 13 a $12.5 million Series B round, with unnamed private investors participating alongside Flagship Ventures. CEO Robert Connelly told our colleagues at "The Pink Sheet" that Flagship provided less than half of the new round, while “business entities, individuals and family offices” supplied the remainder. Flagship created Pronutria within its VentureLabs program in 2011, quietly funding it with a $10.8 million Series A round over a two-year period before lifting the lid last October. Much of the Series B, which Connelly said is probably Pronutria's final venture round, will be used for clinical trials on two muscle-protecting candidates that preserve strength in frail, elderly people with sarcopenia, the loss of muscle mass that can occur during periods of hospitalization. The candidates, PN-107 and PN-365, are formulations of the amino acid leucine delivered as small “shot”-sized beverages similar to bottled energy products found on supermarket shelves. The specific pharmacokinetics and efficacy of each candidate, and the effects of their specific balances of amino acids, will be compared with each other in the trials. The company is still deciding on a regulatory pathway for each one, including possibly developing them as nutritional supplements, medical foods or pharmaceutical products, each of which has its own requirements. Initial clinical trials, now underway, are scheduled for completion by mid-year; Connelly said the company also is mulling parallel development of drug and non-drug formulations of similar product candidates. Further down the line, Pronutria is aiming for products addressing the metabolic, gastrointestinal, immune and renal disease areas, as well as beneficial products for patients with rare diseases and those going through chemotherapy. Whatever drug products Pronutria develops will reside in a separate business unit, which will help ease eventual sales or spin-outs. – Paul Bonanos

Best of the Rest (Highlights of Other Activity This Fortnight): Endocrine disease-focused Versartis raised $55M in Series E financing, and concurrently filed for an IPO…to support the launch of opioid dependence drug Bunavail in the second half of this year, BioDelivery Sciences grossed $60M in a registered direct offering…PTC Therapeutics publicly sold $126M in a FOPO to complete Phase III development and gain regulatory approval of ataluren in Duchenne muscular dystrophy and cystic fibrosis caused by nonsense mutations, in the wake of last month’s EMA/CHMP negative opinion on that candidate’s MAA…Concert Pharma priced its IPO at $14, the top end of its range, to net $78 million...three Israeli biotechs – Galmed, Bio Blast, and MediWound – are all hedging their bets and trying to float on Nasdaq…and PDL BioPharma, which manages patents and royalty assets, completed a $261M convertible notes offering. – Amanda Micklus

Photo courtesy of Mike Mantin  on flickr, via a Creative Commons license. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Photo credit: Wikimedia Commons

A Rush And A Push And The Financings Of The Fortnight Is Ours

Meet us at the St. Francis, and bring your own damn water!

Happy Morgan's Eve, everyone. If you’re like FOTF, you’ve been preparing for the week ahead by breaking your day into 25-minute conversations. If our kids need to talk to us, we tell them to take the stairs to the tenth floor, run down the hall, squeeze past 120 people coming out of the bathroom, steal some bottled water left outside a partnering suite, and find Room 1450. Come in, sit down, just  wait while we finish a few emails on our phones. Yes? You can’t sleep? Not exactly an unmet medical need. We’ve also wondered a few times if a toddler’s point blank sneeze into one’s mouth counts as a new form of immunotherapy.

For those of you with older children, you might be practicing for JPMorgan this week when the conversation inevitably turns to financing. Hit your yard-work milestones to trigger the next allowance tranche. That’s the way it is as long as you live under my term sheet, er, roof. 

Whatever the year, there’s always a sensation of falling out of a holiday tree, or warm cozy bed, directly into the boiling JPMorgan cauldron. This year, organizers gave us a bit of a break, pushing the conference back one week, but the slight lag was immediately filled up by a breakneck filing of IPO documents: Six so far in the new year alone, adding to several that squeezed their paperwork through before the ball dropped on New Year’s Eve. (We have details on one of those filers, Flexion Therapeutics, in our roundup below.) A few of those, plus others still in the IPO queue after filing in the back half of 2013, have significant Phase II or Phase III clinical milestones. Yet others that haven’t declared publicly their IPO intentions also have big milestones upcoming, and we can’t help but think their S-1’s won’t be too far behind if a few companies currently in the queue make their debuts soon.

In the next Start-Up, our colleague Stacy Lawrence previews several private companies with upcoming late-stage clinical data, and one thing’s clear: There’s not a lot of 100% novel technology working up the pipeline. That’s not to say the companies in question aren’t doing important or technically difficult work. But many of the products due for data have an element of de-risking that made for faster development and a more reasonable investment thesis, especially worth noting when the company is making a push in an indication where approval has been an elusive target.

For example, Intarcia Therapeutics is delivering an off-patent diabetes drug, exenatide, via a subcutaneous pump that carries a year’s worth of treatment. Intarcia hasn’t filed an S-1 yet, not publicly anyway, but its deep roster of crossover investors makes one hear a ticking clock -- or is that the beat of the subcutaneous pump?

We can’t help but pump Start-Up's upcoming A-List, the annual roundup of the year’s top Series A financings. The 2013 winners include entrants from the fields of gene therapy, immunotherapy, epigenetics and food allergies, and a few have had very unusual financial backers. Learning who's who will be your reward for surviving next week.

And a year from now, perhaps the 2014 A-Listers will include a biotech that has launched with equity crowdfunding. That would be a first. One crowdfund platform that we’ve reported on before, Poliwogg, will try to make a splash in San Francisco next week, so stay tuned to our colleagues from "The Pink Sheet" and Start-Up for more on that. We regret to inform, however, that splashing is generally frowned upon these days in California. Unlike IPOs, raindrops are in short supply, and 2013 was the driest year on record. So we ask you out-of-towners to think twice before showering while you’re here, and if a stranger on the street looks longingly at your Evian, be kind. We’re parched. Better yet, you can save water by drinking your fill of 2014’s first installment of...

Flexion Therapeutics: As its clinical candidates for treating osteoarthritis inch closer to pivotal studies, Flexion has joined the IPO parade. In case anyone’s knees hurt from all that marching, Flexion’s three compounds are formulated for long-lasting pain relief and injection directly into the knee joint. FX006, Flexion’s lead product for front-line use, is a formulation of a common steroid, triamcinolone, that in 2013 posted solid Phase IIb results, but the company still has work to do: it plans a second Phase IIb trial that is set to begin in the second quarter of 2014, to determine the drug’s optimal dose before Phase III. A second product, FX005, is a sustained-release p38 inhibitor; Flexion is positioning the product for end-stage (pre knee replacement) osteoarthritis pain. The company aims to file an IND for a third product, the TrkA antagonist FX007 for post-op pain, later this year. Both ‘005 and ‘007 were licensed from AstraZeneca PLC, in separate deals. Flexion’s founders, Michael Clayman and Neil Bodick, famously institutionalized “A-Team”-style rapid and inexpensive to-proof-of-concept drug development at Eli Lilly & Co. as creators of that company’s ‘Chorus’ model, and struck out on their own in 2007 to monetize POC assets as a stand-alone biotech. At the time, they anticipated that by licensing in pharma assets they could develop and flip them quickly. But the economics they were offered weren’t going to provide the kind of returns they originally anticipated. The company’s reinvention underscores the difficulty of timing biotech models to pharmaceutical tastes, and – at least during the comparably leaner years of 2011-12 – pointed to industry’s increased avoidance of clinical risk. Flexion’s private backers – Versant (~30%), Sofinnova (~19%), Pfizer (~17%), 5AM (~16%), and Novo AS (~11%) – surely hope that timing public investors’ enthusiasm for biopharma is an easier task. – Chris Morrison

AC Immune: When the big Alzheimer’s Phase III trials featuring anti-amyloid treatments failed in 2012, many eyes in the field turned to AC Immune. With arguably the deepest Alzheimer’s pipeline of any private biotech, the Swiss firm said January 9 it has raised a Series D round of 20 million Swiss francs ($22 million) from existing investors. It also said it has launched a Phase I trial of a vaccine to stimulate a patient’s antibodies against phosphorylated tau, a protein that accumulates in tangled formations within neurons. Tau tangles, along with amyloid plaques, are considered two signposts of Alzheimer’s disease, but much debate remains whether the pathologies are treatable or simply an effect of disease progression. Meanwhile, one of the world’s most closely watched Alzheimer’s trials has just begun dosing patients with AC Immune’s monoclonal antibody crenezumab. The trial is funded by Genentech, the Banner Institute, and the US National Institutes of Health, and it involves people in Colombia with high genetic risk of Alzheimer’s who have yet to show cognitive decline. If successful, it would be one of the first signals that anti-amyloid therapy has a preventative effect if administered before symptomatic onset. Dosing began in December, according to AC Immune. The firm has raised 84 million Swiss francs since its 2003 inception, all from individual investors. – Alex Lash

Receptos: Seven months after completing its IPO, Receptos turned back to public shareholders to raise more money, grossing $102 million in a follow-on public offering on January 8. The biotech sold 3.3 million shares for $30.75, a 120% increase from its $14-per-share IPO price. Days before the offer closed, Receptos started enrolling patients in the Phase III portion of its RADIANCE trial of lead candidate RPC1063 for relapsing multiple sclerosis. RPC1063 is being tested in a separate Phase II trial in ulcerative colitis, and Receptos plans to release top-line data on both indications in mid-2014. Recently the USPTO issued composition-of-matter patents on RPC1063, giving the compound patent coverage until at least May 2029. Receptos is busy with others in the pipeline too: it’s designing a Phase II study of RPC4046 in active eosiniphilic esophagitis. AbbVie partnered the anti-interleukin-13 antibody with Receptos in May. Once the study results are published, AbbVie has an option to enter into a worldwide co-development deal with Receptos, which would retain co-promotion rights and split US profits. In addition, this year Receptos expects to select a lead agent from its glucagon-like peptide-1 receptor small-molecule positive allosteric modulator program and start IND-enabling studies in Type II diabetes. -- Amanda Micklus

Blueprint Medicines: The Cambridge, Mass. biotech said January 7 it had secured a $25 million Series B round as it pushes its selective kinase inhibitors, aimed at specific mutations mapped through its platform, toward the clinic. It says its lead compounds should enter the clinic in 2015. They are an inhibitor of the mutation that drives both systemic mastocystosis, an overproduction of mast cells in various organs and tissues, and a subset of gastrointestinal stromal tumors; and an inhibitor of a mutation that leads to a specific type of hepatocellular carcinoma. The firm was initially funded by Third Rock Ventures and Fidelity Biosciences, but neither of those deep-pocketed groups has taken the lead for the B round. Instead, Swiss oncology investment specialists Nextech Invest led the round, with crossover investors Biotech Value Fund and Casdin Capital, Third Rock, and Fidelity, and other undisclosed investors joining in. The crossovers could be a sign that Blueprint is gathering itself for a run at the public markets this year. The firm has been led since last spring by an interim CEO, Third Rock partner Alexis Borisy, who took over for co-founder Chris Varma without an announcement. – A.L.

Best of the Rest (Highlights of Other Activity This Fortnight): Alexar Therapeutics, the latest biotech to come out of asset-based financing entity NeXeption, closed on a $21.5 million Series A round led by New Science Ventures and Third Point Ventures to support work on a topical liver X receptor agonist for inflammatory cutaneous disorders…Auspex, which has a S-1 on file to go public, raised more venture dollars: the orphan disease-focused biotech received $20 million in Series E financing and $15 million in a venture loan...Neuralstem will advance cell therapeutics and small molecules, including lead spinal cord stem cell-derived NSI566 for ALS, thanks to a $20 million registered direct offering…after postponing its IPO in November, GlycoMimetics revived the offering and set terms at 5.75 million shares for $8…and GW Pharmaceuticals, maker of cannabinoid prescription drug Sativex, raised $88 million in a FOPO. -- AM

Stampeding wildebeests (heading to the Celgene presentation?) courtesy of t3rmin4t0r under Creative Commons license.

2013 Financing of the Year Nominee: Calico

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™.

Across the pharma industry, companies are developing symptomatic treatments, therapies that attack the root causes of diseases, prophylactic vaccines, and occasionally, holy-grail cures that eliminate diseases from patients entirely. But Calico, a new company launched in September by Google founder Larry Page, aims for an even bigger kahuna: it’s trying to “solve death.”

That’s the way Time put it when it introduced Calico in a splashy cover story. And while some prefer the softer terms “anti-aging” and “life extension” to describe Calico’s aims, make no mistake: It’s the latest well-funded effort to discover treatments that slow down, arrest or reverse the gradual process of atrophy that makes us all older and more vulnerable to disease. If its ambitions seem outsized, its creator has company in Silicon Valley, where audacious goals occasionally take form as hundred-billion-dollar companies just a few years after they’re dreamt up.

Google employs futurist/inventor Ray Kurzweil, who has written a couple of books about life extension. PayPal founder and Founders Fund partner Peter Thiel has voiced a desire to be a supercentenarian, and has contributed funds to related projects. And a group including Facebook founder Mark Zuckerberg, his wife Priscilla Chan, 23andMe founder Anne Wojcicki (Page’s soon-to-be-ex-wife) and Russian billionaire/Valley investor Yuri Milner has launched the Breakthrough Prize in Life Sciences, which awards grants to scientists “curing intractable diseases and extending human life.”

If that just seems like a bunch of techies trying to become more like the robots they like to create, well, Calico has brought in one seasoned biotech veteran to steer the ship toward realistic outcomes. Longtime Genentech CEO Art Levinson – still Genentech’s chairman, a Roche director, and Apple’s chairman – is Calico’s chief executive. In a Google+ post at the time of the company’s launch, Levinson wrote that Page and Google Ventures partner Bill Maris approached him about a project “that would take the long-term view on aging and illness”; Page’s own post described the project as “a long-term bet” that might tackle decreased mobility, loss of mental acuity, and life-threatening diseases that afflict the elderly. (Page said Google itself had invested in the project; the Google Ventures web site doesn’t list Calico as a portfolio company. The venture arm has its own data-driven ambitions, as we discussed in this Start-Up profile.)

Calico – short for “California Life Company” – hasn’t revealed much more since its September launch, but it hired a few more industry vets and academic figures during the fall. Former Roche EVP of global product development and chief medical officer Hal Barron will lead Calico’s R&D. Ex-Princeton prof David Botstein, who ran the university’s Lewis-Sigler Institute for Integrative Genomics and won one of those Breakthrough Prizes, signed on as Calico’s chief scientific officer. Both are Genentech veterans. Also, former Genentech Senior Oncology Fellow Bob Cohen was named a Calico Fellow, while UCSF professor and researcher Cynthia Kenyon signed on as a Calico scientific advisor.

It wouldn’t kill you to consider Calico for this year’s Roger in the financing category, now, would it? (Though it remains to be seen if Calico can repay the favor with a little life extension.)

Thanks to Flickr user UlfBodin for the photo of a sun-kissed kitty, reproduced here under Creative Commons license.

2013 M&A Of The Year Nominee: Amgen/Onyx

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™.

Step right up and cast your vote. No reason to hem or haw. Amgen’s $10.4 billion acquisition of Onyx Pharmaceuticals deserves your vote for M&A of the year.

What’s that you say? The deal held no intrigue? No eleventh-hour white knight who stepped in and drove a nail-biting bidding war? No surprises that made you dribble coffee down your chin while reading the morning news?

Well, it’s not as though every deal can be shrouded in as much conspiracy as Roche’s takeover of Genentech, or done at a price that leaves you staggering to the water cooler ala Gilead’s acquisition of Pharmasset.

But what’s so bad about a straightforward acquisition that hedges for the buyer and still rewards the seller, one where the purchase price, at $125 per share, meets a middle ground? Remember how Amgen originally offered $120 per share, which was rejected by Onyx, which thought it could get more like $130 to $140 per share?

How civilized then that they settled squarely on $125 without dragging us through a drawn out campaign. Onyx’s investors still ended up receiving a hefty payout, with the final price representing a 43.9% premium over the stock’s closing price in June before Amgen’s original offer was disclosed.

And, $10.4 is nothing to shrug at either. Amgen’s acquisition of Onyx was the most expensive M&A of the year, reason enough to cast your vote in its favor.

Don’t forget the perfectly sensible strategic rationale behind Amgen’s decision to buy Onyx. The big biotech gains the proteasome inhibitor Kyprolis (carfilzomib) for multiple myeloma, and Nexavar (sorafenib) partnered with Bayer, for liver and kidney cancer, drugs that are already on the market in the U.S. and will immediately contribute to Amgen’s top-line. The company needs new drugs to fill a revenue gap. Before the acquisition it was expecting that sales would be lower in 2015 than in 2013.

The addition of Kyprolis fills that void – and it gives Amgen some street cred in oncology, a therapeutic area it has targeted for future growth, though its marketed cancer portfolio mainly includes supportive care products, not cancer interventions.

Onyx serves as a leg up for Amgen as it looks to establish itself as a major oncology innovator and bring forward a pipeline of oncology drugs it has cobbled together partly through acquisitions.

Wait, you’re still not sold? You’d prefer a deal that’s more high-risk, high-reward? Well, you can rest assured Amgen’s still has plenty of risk to absorb. Kyprolis made it to the market through an accelerated review, but Amgen needs the results of two ongoing Phase III trials, ASPIRE and FOCUS, to play out in the drug’s favor before it can secure full approval and expand into Europe.

In November, a Bank of America analyst issued a note citing reports of cardiovascular events with Kyprolis. That, understandably, has spooked some investors while they wait for the Phase III data to report out in 2014. Amgen called the whole flap a misunderstanding that stemmed from the analyst’s dinner meeting with Celgene management and clarified that event rates are no different from what is already included in the Kyprolis label. The data monitoring committee overseeing the study has not reported any specific safety concerns, Amgen added. There's your intrigue!

Still, these things do get you thinking about the $10.4 billion Amgen paid for Onyx and what could happen between now and when the company reaps a return. In the drug industry, things are never straightforward despite how they might appear. Are you happy now? Then step right up and cast your vote.

flickr image via Dr Colleen Morgan under creative commons

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Photo credit: Wikimedia Commons

Deals of the Week: Value Surprise!

There’s a lot of talk about valuation these days. Sort of like the porridge in the nursery tale, it’s either too high, or it’s too low, but it’s almost never just right.

Start-ups and micro-caps are frequently valued on the strength of their lead candidate, with earlier-stage programs, certainly anything in research, heavily or entirely discounted. But it sometimes turns out that the real value was in these lowly, neglected candidates or technologies and not the glitzy lead.

Acquisitions, particularly serial acquisitions, often delay these early-stage programs, and sometimes bury them altogether. But decades later, the ones that squeak by sometimes go on to dizzying heights.  And in a few rare examples, the companies that birthed these hidden gems go on to do it again and again.

Take Sugen. An early specialist in kinase biology, it was founded in 1991, went public in 1994, and was acquired by Pharmacia in 1999 for $728 million. Pharmacia was acquired by Pfizer Inc. in 2003, and most of Sugen’s staff was let go. The few that remained were absorbed into Pfizer’s La Jolla campus. Sunitinib, a follow-on compound to Sugen’s lead angiogenesis inhibitor SU5416, was filed by Pfizer and approved in 2006 for advanced kidney cancer and gastrointestinal stromal tumor (GIST). 2012 sales of Sutent were a shade over $1.2 billion.

Pfizer’s next cancer launch, another Sugen discovery called crizotinib, was a more interesting story. Former Sugen researcher James Christensen, a senior director of precision medicine at Pfizer’s La Jolla campus, told us that it began as a c-Met inhibitor program in the early 2000’s. Around 2006 there was reason to think that ALK was an off-target effect, but the Pfizer team didn’t know what the application would be. In 2007, Nature magazine published an article on the role of ALK translocation in NSCLC. Xalkori launched 4 years later in 2011. 2013 sales are projected at around $290 million.

Fourteen years later, Sugen has returned many times its purchase price. With ALK screening issues out of the way, Pfizer executives expect Xalkori sales to climb. And Pfizer La Jolla may be working on other Sugen-discovered kinase surprises.

The next example was likewise buried under layers of acquisitions. In 1999, Millennium Pharmaceuticals (now Millennium: The Takeda Oncology Co.) acquired fellow Cambridge biopharm LeukoSite for $585 million. The first LeukoSite alumnus, Campath (alemtuzumab, licensed from BTG PLC in 1997), was ultimately approved for CLL in 2001. It never made much headway in that indication. But Sanofi/Genzyme Corp. are hoping it will fare better in multiple sclerosis, where the company has rights acquired from former Millennium partner Bayer AG in 2009, and have recently won approval for the drug as Lemtrada in Europe. LeukoSite also advanced Velcade (bortezomib) after acquiring ProScript, a foundering Cambridge biotech, a few months before being gobbled up by Millennium. Millennium went on to win approval for it in multiple myeloma, seven years after its initial synthesis, in 2003.

But the real buried value may lie in another LeukoSite antibody, vedolizumab, an alpha-4-beta-7 integrin which is expressed only on lymphocytes. It is essentially a targeted therapy for gut inflammation. Takeda Pharmaceutical Co. Ltd. filed in the U.S. for ulcerative colitis, and FDA recently gave it priority review. Tachi Yamada, head of R&D at Takeda, told us at Elsevier’s recently-held PSA: The Pharmaceutical Strategy Conference in New York that vedolizumab, which we thought had originated in Millennium’s labs, ultimately came out of LeukoSite’s antibody libraries.

Yamada said that when he started at Takeda in 2011, he saw the potential of vedolizumab and put resources behind it. “This was a little bit of a program that was being operated by a group of people under the radar,” he said. “We always understood the value of this library of antibodies, and we are looking through them very carefully for other potential applications.”

Nothing new here. Big fishes eat little fishes. Management hierarchies and scientists change. And so do portfolio priorities. Programs are killed or neglected, and sometimes redirected. And once in a rare while they’re spotted, and quietly pursued. -- Michael Goodman  (Thanks to churchwhisperer.com for use of the photo)

Speaking of the vicissitudes of value, here's the latest edition of . . .

Janssen/GSK: Johnson & Johnson’s Janssen Pharmaceuticals Inc. is determined to own a hefty slice of the oral hepatitis C market. The company now has Phase II antiviral candidates in three different classes, thanks to an Oct. 8 deal with GlaxoSmithKline PLC giving it worldwide rights to GSK2336805, an inhibitor of the non-structural 5a protein. Financial terms weren’t released.

Janssen already has an earlier-stage NS5a inhibitor in its pipeline, but plans to study ‘805 in combination with its other oral direct-acting antivirals. Potential two- and three-drug cocktails could include combos with protease inhibitor simeprevir, which has a Nov. 28 PDUFA date, and/or non-nucleoside polymerase inhibitor TMC647055. Janssen is already testing simeprevir in combination with Gilead Sciences Inc.’s nucleoside polymerase inhibitor sofosbuvir and Bristol-Myers Squibb Co.’s NS5a inhibitor daclatasvir, but the new deal gives it a chance to own all the parts of a combo therapy.

With the sale, GlaxoSmithKline has effectively exited the oral HCV arena, although it will complete an ongoing Phase II trial of ‘805 in combination with ribavarin and pegylated interferon. GSK and Vertex Pharmaceuticals Inc. agreed in November 2012 to conduct a Phase II study of ‘805 with Vertex’s nucleoside polymerase inhibitor VX-135. -- Paul Bonanos

Quintiles/Muscular Dystrophy Association: Quintiles, the global CRO, is reaching further into the world of patient registry development. The Muscular Dystrophy Association has tasked it to develop a neuromuscular disease registry which will provide real world evidence to help researchers, physicians, and patients understand the cause of the disease and identify effective treatments. Financial details were not disclosed. 

MDA will use the registry to study the natural history of muscular dystrophy and related muscle diseases such as ALS and SMA, collect information on practice patterns, inform care guidelines, and improve the quality of patient care. The registry is currently available at 25 clinics within MDA’s national network, with plans to expand to their full network of 200 clinics by 2015.

A Quintiles spokesman wouldn’t comment on the CRO’s plans to grow its registry practice, but he noted that patient registries “are an increasingly important component of real-world evidence development.” The CRO has touched the world of registries before through its Quintiles Outcome division which specializes in observational and real-world research. Quintiles said that the unit, “our real-world and late-phase division, has managed patient registries previously.” -- Michael Goodman

Vivus/Auxilium: Auxilium Pharmaceuticals Inc. stuffed another men’s health drug into its sales reps’ bags Oct. 11 when it licensed rights to Vivus Inc.’s Stendra (avanafil) in the U.S. and Canada. Auxilium will pay Vivus $30 million up front for the erectile dysfunction drug, and is on the hook for an additional $15 million contingent upon a label revision for the drug that reflects an even-better-than-Dominos-Pizza-15-minutes-or-less onset claim.  Further regulatory and sales milestones could eventually take the total outlay to $300 million, and Vivus will receive an undisclosed royalty on sales.

When Auxilium launches the drug at the end of 2013, Stendra will complement its Testim testosterone gel and other men’s health products. (FDA approved the drug in April 2012, though Vivus had yet to launch it.) Auxilium hopes to differentiate the product from its entrenched competition – led by Pfizer’s Viagra (sildenafil) – based on the onset claim. In July 2013, Vivus licensed rights to market the drug in Europe, Australia, and New Zealand to Menarini Group, for $21 million up front plus milestones and royalties.

Vivus, beset by multiple changes at the top of its management ranks this year, is largely valued on the promise of its Qsymia (phentermine/topiramate) obesity drug. With Stendra in the hands of a men’s health specialist, Vivus and new CEO Seth Fischer should now be able to focus on improving sales and/or finding a partner for its main asset. -- Chris Morrison

Lilly/Hutchison MediPharma: Eli Lilly & Co. and Chi-Med's Hutchison MediPharma Ltd. subsidiary have signed an agreement to co-develop and market a small-molecule drug discovered by Hutchison, HMPL-013 (fruquintinib), for treating a variety of solid tumors. Under the agreement, Lilly is to pay Hutchison as much as $86.5 million in upfront payments and development and regulatory milestones, plus tiered royalties based on net sales if the drug reaches the China market. The two firms will share future development costs, which would be carried out by Hutchison. Additional terms were not disclosed.

A vascular endothelial growth factor (VEGF) inhibitor, fruquintinib demonstrated clinical activity in patients with various heavily pre-treated advanced cancers, according to Hutchison MediPharma. Currently, a single arm Phase II study is on-going in China with results expected to be released in early 2014. In July 2013, HMP received Phase II/III Clinical Trial Application approval from China FDA. In the planned Phase II/III clinical trials, fruquintinib will be studied in patients with a variety of solid tumors.

“The collaboration with Lilly will allow for fruquintinib to be developed across various tumor types in China and at a far greater speed than if we went alone,” said Chi-Med CEO Christian Hogg in a statement. 

“In Lilly’s emerging markets business, we are focused on providing patients with innovative medicines from our own pipeline and through collaborations with respected science-based companies such as HMP,” added Jacques Tapiero, Lilly Senior Vice President and President of Emerging Markets. -- Tamra Sami

Novartis/ImmunoGen: Novartis AG has taken exclusive rights to ImmunoGen Inc.’s antibody-drug conjugate (ADC) technology for use in developing cancer therapies against an undisclosed target. This is the second license Novartis has taken onthe technology; the first, in 2010, involved a predetermined number of oncology targets, selected by Novartis. In 2010, Novartis paid ImmunoGen $45 million upfront and up to $200.5 million in milestones for each target resulting in a cancer compound, and royalties. Milestones in the latest deal are also valued at up to $200 million, not including the undisclosed upfront.

Novartis is responsible for development, manufacturing and commercialization of the products.  ImmunoGen’s ADC technology, known as TM1, uses a tumor-targeting engineered antibody that links to a cancer therapy and delivers that therapy to the cancer cells; it aims to be better tolerated and more effective. Roche/Genentech Inc.’s Kadcyla, which combines ImmunoGen’s ADC technology and Roche’s well-established trastuzumab antibody, recently was approved in the U.S. and elsewhere for previously treated HER2-positive metastatic breast cancer patients. ImmunoGen also has partnerships with Bayer Healthcare, Amgen Inc., Biotest AG and Sanofi.

Despite a string of platform deals, FDA approval of a key cancer agent that validates the biotech’s ADC platform, and a wildly optimistic run up overall in biotech stocks, ImmunoGen’s stock has traded within a narrow range for the past 12 months.  Investors are waiting for more data on its lead in-house compound, IMGN901, a small cell lung cancer drug which hit a delay last spring due to dosing adjustment in PII trials. -- Wendy Diller

Takeda/Immunomedics: Takeda will return rights to the humanized anti-CD20 antibody veltuzumab to Immunomedics Inc., not because of any issues that arose in clinical trials, according to Immunomedics, but because of lack of progress on the program. Immunomedics had filed arbitration proceedings against Nycomed (now owned by Takeda) concerning delays in the development of veltuzumab, which the company argued was a material breach in the licensing agreement. Neither Nycomed nor Takeda completed a single trial on the program. Immunomedics says it will continue to pursue arbitration procedures for damages due to the delay in development.

It is weighing its options for the program including signing a new partner or developing it independently. Nycomed in-licensed rights to veltuzumab in non-cancer indications in July 2008 for $40 million up-front and $580 million in potential milestones, with the aim of developing the drug for rheumatoid arthritis. After Nycomed was acquired by Takeda in 2011, it changed the development plan to focus on lupus instead, resulting in further setbacks, according to Immunomedics. In addition to the $40 million up-front payment, Immunomedics also received a total of $20 million in three follow up payments. Immunomedics is separately studying veltuzumab for the treatment of lymphoma. -- Jess Merrill