Friday, May 01, 2009

DotW: Freak Out!

As the aporkalyspse continues (we apologize to the pork lobby but the a-H1N1-alypse just doesn't have the same ring), we advise you to repeat this soothing mantra: 1. wash hands; 2. cover cough; 3. don't touch eyes or nose; 4. breathe. Of course, if you are Joe Biden or members of his family, you should feel free to add this refrain: HEAD FOR THE BUNKER NOW! (Preferably accompanied by gestures reminiscent of Edvard Munch's The Scream.)

And if that doesn't work, you can join the millions who are preparing by stock-piling Relenza, Tamiflu, Purell hand sanitizer, and Clorox wipes (not necessarily in that order).

While H1N1 news has been hogging center stage (sorry, we had to say it), a few other things of note happened this week. It's was that hallmark holiday of presidents--the 100th day celebration--which means the honeymoon, if not officially over, is probably a little less dreamy. And because life really does imitate art, Obama's tenure to date seems like an episode of The West Wing on steroids: Chrysler is bankrupt! North Korean shot off a nuclear missile! Bombings in Iraq! Swine flu pandemic!

What's happened in our industry in the same period? Oh, just three mega-mergers; renewed hope that Dendreon's cancer vaccine Provenge will actually make it the market; a surfeit of lawsuits aimed at Sequenom thanks to employee mishandling of data associated with the diagnostic maker's highly touted prenatal test for Down's syndrome (and potentially the collapse of at least one of the hedge funds who backed the company?); any number of biotechs on the brink; and a Health and Human Services department that finally has a leader (good thing, cuz in case you haven't noticed we are in the middle of an outbreak).

We'd like to interrupt this doomsday version of deals of the week with non-porcine related animal husbandry: glowing red puppies--courtesy of South Korea--and Snowball, the dancing cockatoo, come to mind.

And now, the news you've all been waiting for...

Alnylam/Isis Pharmaceuticals: Alnylam and Isis announced another tie-up this week--and no, it wasn't news they were headed to the altar. (Does this make the two companies' Regulus J/V a love child?) This time around the biotechs are teaming up to develop new therapeutics via a single stranded RNA interference technique originally developed at Isis. Under the joint R&D arrangement, which is centered around an unknown number of targets, Alnylam could owe Isis as much as $31 million in license fees. Payment of the fees will be staggered, with $11 million due at the deal's signing, $10 million tied to in vivo efficacy in rodents, $5 million contingent upon achievement of in vivo efficacy in non-human primates, and the final $5 million owed when first-in-man trials of an ssRNAi drug commence. Alnylam will also pay Isis $3 million annually in research funding for the next three years, with ssRNAi studies ongoing at both firms. If Alnylam develops and commercializes drugs utilizing ssRNAi technology on its own or with a partner, Isis will receive milestones and royalties, initially receiving up to 50 percent of any sublicense payments due to Alnylam based on that company's ability to partner the ssRNAi products. That amount will decline over time as Alnylam's investment in the technology and drugs increases. Alnylam, for its part, could get up to 5 percent of any sublicense payments due to Isis based on Isis' partnering of ssRNAi products. Both firms are eligible for royalties from each other on any ssRNAi products developed by the other. The unevenness in the deal terms might suggest that Alnylam, worried that ssRNAi drugs might supersede double-stranded versions, has chosen to partner with Isis purely for defensive reasons. In an interview with "The Pink Sheet" DAILY, Isis's CEO Stanley Crooke downplayed this hypothesis, however. "Alnylam recognizes this is a great added arrow in their quiver, and now they have the option of picking the drug class for whichever target they're working on," he said. So perhaps this is a ploy by Isis to get Alnylam, winner of IVB's deal of the year award, to do its deal-making? Au contraire. "We don't need anybody to partner for us," Crooke said, making sure to note that his biotech has brought in over a billion dollars in alliances.

Sanofi-Aventis/Oxford BioMedica: Call this your deal of the week/no deal of the week two-fer. Your point of view depends on whether you see the glass as half full or half empty. Let's get the bad news out of the way first: this week Sanofi handed back worldwide rights to Oxford's Phase III cancer vaccine TroVax as part of a broader portfolio clean-up. Back in 2007, Sanofi paid Oxford €29 million ($39 million) up front for worldwide rights to the program, plus €19 million in subsequent milestones. The TroVax handback wasn't particularly surprising: a Phase III study of the drug in renal cancer patients hit the rocks last summer and was halted on recommendation from the Drug Safety Monitoring Board. It was clear then that another study would be required for registration and that dose optimization would be very challenging. With a new CEO in place at Sanofi Aventis, and following an in-depth R&D pipeline review, TroVax was one of several Phase II or III programs that didn't make the cut for efficacy, safety, or commercial reasons. Oxford BioMedica's chief, for his part, tried to persuade analysts that Sanofi's decision to hand back the program was not product-specific. "We don't think the decision reflects on TroVax's clinical potential," said John Dawson. Of course, what else could the biotech say? Oxford still hopes - pending the outcome of an FDA meeting - to re-partner the drug, which uses a viral vector to induce an immune response against the tumor-associated antigen 5T4. And who knows? Dendreon's recent positive Phase III news related to its therapeutic cancer vaccine candidate Provenge may drive some interest in TroVax from potential partners. Of course, Dendreon's story also illustrates the complexity of cancer immunotherapy development, and in particular how long it takes to achieve suitable survival data. Dawson didn't exactly give the program his vote of confidence in declaring that "we won't be starting a Phase III [trial of TroVax] at our own cost."

Without TroVax, Oxford BioMedica becomes a significantly earlier-stage biotech. The salve to ease the sting? The biotech has plenty of money to spend on other pursuits thanks to a separate deal with Sanofi to develop gene-based medicines for ocular diseases. The switch in Sanofi's focus results in an immediate payment of £29 million for the UK biotech - £11 million to exit the TroVax deal, and the rest as upfront for the ophthalmology deal. The money will fund the biotech through 2012, according to management - a long time relative to most other UK biotechs. In addition to the upfront payment, as part of the ophthalmology collaboration Sanofi Aventis has committed up to another $24 million over three years. This should pay for Oxford BioMedica to take the four pre-clinical programs that are the subject of the deal - RetinoStat for age-related macular degeneration, StarGen for Stargardt disease, UshStat for Usher syndrome 1B and EncorStat for corneal graft rejection - to Phase I/II studies. Sanofi Aventis has the option, any time before the Phase I/II study or within a defined period afterwards, to license the products. If it does, it will take over development responsibility. The four programs all use Oxford BioMedica's LentiVector gene delivery technology, offering potential validation of the biotech's platform. Sanofi Aventis may broaden its license to develop the four products in other indications, and has rights of first refusal on other LentiVector based products for ocular disease--Melanie Senior.

Bayer/Ardea: Bayer Schering signed a biggish deal with San Diego-based Ardea this week centered around the development of small molecule inhibitors of mitogen-activated ERK kinase (MEK). The deal provides Ardea $35 million in cash up-front and the promise of another $407 million, not including royalties, based on development, regulatory, and sales-based milestones. In addition, Ardea is also eligible to receive low double-digit royalties on sales of products under the agreement. In exchange, Bayer gets an exclusive worldwide license to develop Ardea's MEK inhibitors for all indications. It's perhaps not to surprising that Ardea and Bayer teamed up. Phase I/II studies of Ardea's lead compound, RDEA119, plus Bayer/Onyx Pharmacuetical's Nexavar (sorafenib) are already on-going in a number of cancers. "We are very excited about the potential use of MEK inhibitors to treat a broad range of cancer indications," stated Kemal Malik, Head of Global Development and member of the Bayer HealthCare Executive Committee in a press release announcing the news. In addition to paying a nice up-front, Bayer will also take over all costs associated with the development and commercialization of RDEA119 (which is also in Phase I studies as a single agent) and Ardea's other MEK inhibitors post completion of the ongoing Phase I and Phase I/II trials. Thus, the deal allows Ardea to off-load expenses at a time when its facing larger costs associated with the development of its Phase II medicine, RDEA806, a non-nucleoside reverse transcriptase inhibitor currently being developed as a treatment for HIV and gout. Further upstream the company also has a Phase I medicine, RDEA594, which is a metabolite of RDEA806, that is turning heads as a potential gout treament. Both RDEA806 and RDEA594 remain unpartnered and probably will stay that way until proof-0f-concept data are achieved. To bolster its resources, Ardea inked a private placement in December 2008 worth $30.6 million, selling nearly 3 million common shares to undisclosed institutional investors for $11.17-a-share, a 19% premium to the company's stock price at the time of the deal.


insider said...


Heading for parmageddon?

mjsee said...

hee hee hee hee. LOVE the use of the MOI/Zappa album.