Friday, February 04, 2011

Deals of the Week: Super Sunday Edition

The news from around the globe wasn’t pretty this week, as uprisings in the streets coincided with dangerous weather, spreading misery from Cairo to Lake Shore Drive to northern Queensland. And while Deals of the Week is sensitive to the gravity of these situations – unlike a certain fashion designer who attracted plenty of attention for putting his foot in his mouth – we’re not above a bit of diversion as the weekend approaches.

Neither are at least a hundred million Americans, who will be parked in front of their TVs on Sunday. Whether your preference runs toward bratwurst and cheese curds or a Primanti Bros. sandwich with fries on it, or whether you just like expensive commercials and the Black Eyed Peas, chances are you’ll be watching.

This year’s Super Bowl matchup got DotW thinking: What were the crucial decisions that got the Steelers and Packers to the big game? Was it a deal, or even a no-deal, and is there a lesson that pharmas could draw from what they did? Like, say, keeping one potentially lucrative compound in-house while partnering a later-stage drug, the Pack sensed it was time to bet on Aaron Rodgers and trade aging Brett Favre in 2008, allowing their young star to emerge. The Steelers, meanwhile, dealt troubled asset Santonio Holmes to the Jets, despite his potential for delivering more value in someone else’s hands, and instead looked to their pipeline for standout deep threat Mike Wallace.

Like drugs in the clinic, the players’ performances are only somewhat predictable, and require enormous financial commitments with no guarantees. But a well-timed deal can leave exiting venture investors celebrating like B.J. Raji after his fourth-quarter pick against the Bears, while mounting discontent can get a biotech subsidiary pushed out the door like Wade Phillips.

With our metaphor in mind, admittedly stretched beyond belief like Dwight Clark's fingertips as he brought down The Catch, please enjoy this super edition of…

Alexion Pharmaceuticals/Taligen Therapeutics
: Announced Jan. 31, the union of Alexion and Taligen is designed to be complementary in more ways than one. Both companies have designed drugs that inhibit pathways in the complement system, a subset of the body’s innate immune system in which blood-borne proteins attack pathogens. Alexion, which has thus far specialized in orphan diseases, said it would pay $111 million upfront plus unspecified milestone payments for Taligen, whose lead program has been studied for ophthalmology as well as other disorders. Taligen had been planning to partner its lead program, TT-30, for age-related macular degeneration while keeping it in-house for orphan indications such as atypical hemolytic uremic syndrome and paroxysmal nocturnal hemoglobinuria, two rare disorders linked to deficiencies in complement factor H. Cheshire, Conn.-based Alexion already markets a complement inhibitor for PNH, Soliris (eculizumab), although it affects a different pathway. Robert W. Baird analyst Christopher Raymond speculated that TT-30 could replace Soliris as Alexion’s lead program. The deal represents a payday for Taligen’s venture investors, which had supplied at least $40 million to the Cambridge, Mass., startup since 2004. They include Sanderling Ventures, Clarus Ventures, Alta Partners and High Country Venture. -- Jessica Merrill & P.B.

AstraZeneca/WellPoint: A new agreement between Britain’s second-largest pharma and US-based health benefits provider WellPoint is designed to give AstraZeneca deeper insights into “real world data” surrounding post-market outcomes for its medications. AstraZeneca struck a four-year deal to harvest information from WellPoint’s clinical outcomes research unit HealthPoint, which will deliver data concerning cost effectiveness, clinical effectiveness and comparative effectiveness. That information could prove influential as AZ negotiates with payers to cover new pharmaceuticals. The agreement will focus especially on medications for chronic disorders including diabetes, cardiovascular disease and dyslipidemia, and will draw from a database covering 36 million enrollees in 16 US states. Specific terms of the contract weren’t disclosed, although the companies said the agreement could be extended beyond its initial term. The agreement could also be used to identify areas of unmet need in order to spur research and development initiatives, according to AstraZeneca executive James Blasetto. Although AZ has contracted WellPoint to study specific disorders before, their latest deal is the broadest yet. -- Cathy Kelly & P.B.

Allergan/Map Pharmaceuticals: Botox marketer Allergan paid $60 million upfront for rights to co-promote Map Pharmaceuticals’ orally inhaled migraine therapy Levadex, which has completed Phase III clinical trials and could be ready for an NDA submission in the first half of 2011. The deal value could increase to $157 million if milestones tied to Levadex’s approval in additional indications such as adolescent migraine are met. The first order of business is getting approval for acute migraine; while the companies establish joint steering committees, Map retains ownership of the NDA, which also means it bears the costs associated with the submission. The amount of upfront money is worth noting, given what the deal doesn’t include: Map keeps rights to promote to primary care docs in the US and elsewhere, meaning it ostensibly could capture more value for the product through a series of smart licensing deals. Still analysts and investors were puzzled why Map, which can’t afford the costs of primary-care marketing in a competitive space like migraine, didn’t seek a partner from the get-go that could broaden Levadex's commercial reach to U.S. internists and family-practice docs, as well as physicians practicing abroad. -- Ellen Licking

Valeant Pharmaceuticals International/PharmaSwiss: Focusing its growth almost completely on deal-making, Canadian specialty firm Valeant got off to a quick start this year, announcing a €350 million ($480 million) purchase of PharmaSwiss on Feb. 1. Having said in early January that Valeant planned at least five ex-U.S. deals this year, including one of significant size, CEO Michael Pearson looks to have made a smart move in acquiring the privately-held generics and over-the-counter products firm. PharmaSwiss has averaged growth rates of 20% the past five years and with its management team staying, the company will transition into Valeant’s European base of operations a year after Valeant expanded via last year’s $3.3 billion reverse merger with Biovail. In addition to tax benefits from operating in Switzerland, PharmaSwiss offers its status as partner of choice for companies such as Pfizer, Eli Lilly and Amgen that want to commercialize products in Eastern Europe without adding infrastructure. Pearson said PharmaSwiss will continue that practice under the Valeant umbrella. Separately, in a deal announced Feb. 3, Valeant acquired all U.S. and Canadian rights to topical herpes drug Zovirax (acyclovir) from GlaxoSmithKline for $300 million. -- Joseph Haas

Apeiron Biologics/Merck KGaA: Austrian immunotherapy firm Apeiron has licensed a fusion protein consisting of interleukin-2 linked to a GD2 antigen-targeting antibody from Merck KGaA, and it aims to conduct Phase II/III trials with it. Money from an out-licensing deal struck with GlaxoSmithKline a year ago enabled Apeiron to snap up the product, which CEO Hans Loibner said he has kept tabs on for some time. Apeiron believes it has the knowledge necessary to conduct trials in the very small numbers of children who develop neuroblastoma, and Merck probably recognized that, Loibner said. The immunocytokine has shown preliminary activity in a subset of children with neuroblastoma in a Phase II study. Apeiron now has full development and commercial rights and would like to take the product to market, but that decision may change, Loibner added. The companies did not disclose financial terms of the deal. Apeiron's previous deal came in October 2010, in-licensing a recombinant human superoxide dismutase (SOD) from fellow Austrians Polymun Scientific, which Loibner believes has potential as a dermatological for the treatment of skin damage associated with radiotherapy. -- John Davis

Image of "The Vince" courtesy of flickr user WBUR.

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