Friday, January 07, 2011

Hark! DOTW Rings in the New Year

Lots of deals, lots of glory! Let's sit back and hear the story!

No, not of The Producers – that satire about Broadway, from which such a line was gleaned – and no, it's not the story behind the theatrical hit's flagship song 'Springtime for Dealmakers,' either. This story has to do a baker's dozen of pharma industry deals, which materialized this week, Number Two of the New Year, but so far reflective of old, non-too entertaining trends: notably a desire to access pre-clinical targets or biomarker tools without taking too much risk, i.e., spending much $$ upfront.

The reality is hard to decipher because the deals revealed little about financial terms, but fair to say that a good portion seemed to involve small up-fronts and were heavily backloaded. Interestingly, two of the pack involved companion diagnostics, a field that is making slow but steady progress, despite uncertainties around the regulatory pathway, especially in the U.S.; valuation basics, which is a particularly sticky point for business development executives, and commercial potential of linking tying therapeutic decision making to particular drugs.

Quite a few of this week’s deals (only some of which are noted below) involve antibody discovery—and the field of antibody conjugates is heating up, as Pfizer became the latest Big Pharma to put its toe in the water ("Making the Case For Antibody Conjugates," IN VIVO, Dec. 2010). And from a geographic perspective, for reasons that may have to do with the amount of cash pharma holds overseas as well as the current mindset of European big pharma companies (oh, and government incentives), European biotechs like Immutep and Santaris continued to generate a disproportionate share of activity.

If there's a seasonal element to deal making, hopefully, this is the nadir of the cycle. But surely the biopharma industry and Broadway share a high-risk high reward model – only one is infinitely more entertaining than the other, depending on how you prefer your fixes (The comparison stops there). Below is a smattering of some of the more interesting activities, at least from this biopharma watcher's perspective.

GlaxoSmithKline/Immutep: This deal is an exception to the masses, perhaps in part because GSK shows no sign of letting up on its interest in autoimmune diseases. The Big Pharma has acquired worldwide exclusive rights to a potential new therapeutic approach to such conditions from Immutep, a small French biotech located on the outskirts of Paris. One of Immutep’s founders discovered lymphocyte activation gene-3 (LAG-3) a number of years ago, and the company has since designed a cytoxic antibody, IMP731, which kills off cells whose LAG-3 gene is active. As this includes T lymphocytes involved in the autoimmune disease process, but not resting “memory” T lymphocytes involved in protecting against infections, it is hoped that IMP731 represents a new, safer, approach to treating autoimmune conditions. Immutep is in line for an upfront payment and milestones worth up to $100 million from the GSK deal, and also single-digit, tiered royalties on any eventual sales. The agreement covers all antibodies discovered at Immutep that deplete cells that are positive for LAG-3. GSK is nearing the market with its first product for an autoimmune condition, the lupus therapy Benlysta (belimumab, developed in collaboration with Human Genome Sciences), which has a US PDUFA action date of 10 March. The multinational has a number of other potential autoimmune products in its R&D pipeline, including the antibody ofatumamab, which is licensed from Danish company Genmab and is already marketed for chronic lymphocytic leukemia, as Arzerra. –John Davis

Genentech/Plexxikon: With Plexxikon and Roche's high-profile first-in-class BRAF inhibitor PLX4032/RG7204 in late-stage clinical trials, the development partners announced an additional agreement that gives Plexxikon the right to co-promote the drug through a specialty sales force in the U.S. PLX4032 has shown impressive tumor shrinkage in patients with metastatic melanoma; currently only limited, ineffective options exist, making metastatic melanoma one of the deadliest cancers. Plexxikon, which discovered PLX4032, has had a partnership with Roche since 2006, which included the U.S. co-promote option it exercised on Jan 6. As part of that deal, Roche's Genentech unit paid Plexxikon $40 million upfront, with the promise of another $660 million in milestones; in exchange, it got global rights to PLX4032. As the drug advanced, it has captured increasing attention in the scientific community, both because the data is strong and because it is one of the first drugs to be developed with a companion diagnostic in the protocol nearly from the start of clinical trials. PLX4032 could launch as early as late this year, according Plexxikon, pending a positive interim analysis of an ongoing Phase III trial and FDA's agreement to review the drug on a priority basis. –Jessica Merrill

Veridex (J&J)/Mass General: Mass General Hospital has signed a five-year, $30 million deal with Johnson & Johnson’s diagnostics unit Veridex to develop a third-generation microfluidics-based chip for capturing and analyzing circulating tumor cells (CTCs). The program will be jointly managed at J&J by Veridex and Ortho Biotech Oncology R&D. A few CTC systems exist but they are pretty basic; CellSearch, for example, which Veridex makes, counts CTCs in a blood sample for use in cancer prognosis but can't do sophisticated molecular analysis on the sample. The new collaboration aims to develop and obtain regulatory approval for a standardized diagnostic platform that will be able to conduct biomarker analysis on DNA, RNA, or protein from tumor cells collected noninvasively -- and presumably, repeatedly -- during the course of cancer therapy. J&J’s rationale for seizing now on this opportunity is two-fold: The technology for analyzing rare cells is at a point where it can provide relevant clinical information from very small numbers of tumor cells isolated from the blood; and a significant number of targeted molecular therapies are emerging that invite such monitoring before and during treatment. The collaborators say it will take 2-3 years for the new chip to be ready for clinical validation, which will include prospective clinical trials, first at MGH, then in multiple centers.—Mark Ratner

Transgene/Beckman Coulter – A growing trend in biopharmaceutical development, particularly in the oncology drug sector, is the effort to pair an experimental therapy with a companion diagnostic test that helps determine which patients might (or might not) be optimal candidates for therapy. France’s Transgene, already a player in this field, announced another deal Jan. 5 in which Beckman Coulter will develop a companion test for TG4010, its immunotherapy slated to begin Phase IIb/III development later this year in non-small cell lung cancer. Terms of the deal were not disclosed. Transgene, which is eligible for a $10 million option fee plus up to $956 million in milestone payments if Novartis elects to license TG4010 under a March 2010 agreement, already is collaborating with Ventana Medical Systems on a test enabling it to identify patients with MUC1 positive tumor cells. Beckman Coulter will develop a test that measures the level of activated Natural Killer (aNK) cells (CD16+, CD56+, CD69+/CD45+ lymphocytes) to help select patients for the upcoming trial. The pivotal trial, which also will use the Ventana test to choose participants, will follow on a previous study that showed TG4010 was well tolerated and extended survival in patients with normal baseline levels of aNK cells in their blood.—Joseph Haas

Receptos/Johnson & Johnson/Eli Lilly – A little over a year after completing a two-tranche, $25 million Series A financing, San Diego-based Receptos, focused on G-coupled protein receptor drug discovery and development, has finalized a pair of deals with Big Pharma. Financial terms were not disclosed for either deal, both announced on Jan. 6. First, Receptos agreed to a license and technology transfer pact with Johnson & Johnson unit Ortho-McNeil-Janssen Pharmaceuticals. Under that arrangement, Ortho personnel will be trained on multiple GCPR targets and then apply that technology to the company’s internal GCPR drug discovery efforts. Receptos President and CEO Faheem Hasnain called the deal “part of the Receptos plan to enable strategic partners with Receptos technology and enhance industry efforts to pursue rational drug design for this important class of therapeutic targets.” The biotech also aligned itself with Eli Lilly & Co., signing on for a collaboration in which the two firms will research and develop small molecule modulators of an undisclosed GCPR target. Receptos said the two companies will jointly identify potential orally administered candidates for the target and advance them into preclinical development based on shared structure-based drug design efforts.—JAH

Pfizer/Santaris: Pfizer announced this week that it will add an additional 10 molecular targets to a 10-target deal that Wyeth made in 2009 with the Danish biotech Santaris Pharma in the field of RNA-targeted medicines. For that work, it will pay $14 million, about the same Wyeth paid two years ago. Santaris is also eligible to receive up to $600 million in milestones, as well as royalties on sales of any eventual products that result from the collaboration. In January 2009, Santaris received an upfront payment of $7 million in cash from Wyeth, with the U.S. multinational also making a $10 million equity investment in the fledgling biotech. Pfizer said it has advanced several programs under this original collaboration and reached a number of early milestones. -- John Davis and Lisa LaMotta

Pfizer/Seattle Genetics: Pfizer this week also became the latest Big Pharma to license Seattle Genetics's antibody-drug conjugate technology, paying $8 million upfront to use the platform to discover antibodies to a single oncology target. The deal, whose value could inflate to more than $200 million in payments plus royalties if it results in a marketable drug, follows other agreements with GlaxoSmithKline, Genentech, Takeda’s Millennium Pharmaceuticals, and several others, and represents a higher price per target than GSK’s $12 million upfront deal for multiple antibodies, inked in December 2009. Genentech and Astellas also paid $12 million upfront in deals for multiple targets in August 2010 and December 2009, respectively. Seattle Genetics says it has generated $145 million in revenue from ten collaborative deals, with six targets in the clinic and others advancing toward clinical development. Pfizer, which acquired significant antibody-drug conjugate technology of its own when it bought Wyeth in 2009, also agreed to pay Seattle Genetics material supply and annual maintenance fees of unspecified size related to the project. The Millennium collaboration recently yielded highly encouraging results on the Phase II lymphoma candidate brentuximab vedotin, which like other ADCs links an antibody with a payload drug, enabling it bind to tumor cells and deliver cancer-fighting agents directly.—Paul Bonanos

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