Friday, May 06, 2011

Deals of the Week Cares Enough To Send The Very Best

Even if it's just a Hallmark holiday, Mother's Day is still special to Deals of the Week. We'll be spending some time this weekend contemplating the sacrifices our moms made for us, and honoring them for what they gave us.

But like Anna Jarvis, one of the holiday's founders, we're not so crazy about the way Mother's Day has become commercialized over the years. Just a few years after hatching a plan to memorialize her mother with a special day everyone could share, she became a vocal opponent of the holiday's industry, despising saccharine cards and similar trite gestures so much that she was once arrested for disturbing the peace while protesting a celebration. A lot can happen between the time an idea is conceived and the moment it turns into a billion-dollar juggernaut. A well-intentioned plan can go sour when big money's at stake -- a notion with which readers of this column are likely all too familiar.

Indeed, this week's "no-deals" show how four companies took interest in others' ideas, only to walk away as their projects marched toward commercialization. Meanwhile, one company that faced a hostile bidder has plenty of reasons to thank its new parent -- a relationship we'll explore in...

Teva/Cephalon: Teva's gentler, kinder – and more lucrative -- offer to buy Cephalon for $6.8 billion in cash may be viewed as the rescue of a biotech flagbearer from the hands of Valeant, a scruffy, R&D-hating, efficiency loving hostile bidder. Teva plans to use Cephalon to build out its specialty pharma branded business, now at $4.6 billion in annual sales, to $9 billion by 2015. To do so, it'll capitalize on Cephalon's R&D capabilities, pipeline, and currently marketed products. That's in stark contrast to Valeant, which had planned to discontinue Cephalon's pipeline programs. But Teva's and Valeant's approaches may not have been as far apart as executives' speeches would have listeners think. Valeant, which offered $5.7 billion for Cephalon, would almost certainly have come up in price. And Teva, like Valeant, is placing a heavy emphasis on cost synergies and cash flow from marketed products to make this deal work financially. Teva expects to attain about $500 million in cost savings a year by year three after the deal closes, executives said. The difference, perhaps, is where and how those cuts would be made. Valeant was ready to go in and axe much of Cephalon; Teva will more likely bundle the best from its own assets and the acquiree's before deciding what to jettison. Teva is currently engaged in patent spats concerning multiple sclerosis therapy Copaxone (glatiramer), while its robust generics business will confront headwinds as the number of large innovative drugs expected to go off patent falls off post 2012. Many of Cephalon's late-stage pipeline assets could start to contribute to the company's revenues by that time. - Wendy Diller

Allergan/Molecular Partners
: Coinciding with the announcement of Phase I/II trial results for its VEGF-antagonist drug candidate at the Association for Research in Vision and Ophthalmology conference, Molecular Partners AG reached an agreement with Allergan Inc. to out-license the molecule for a $45 million upfront payment. Privately held Molecular Partners will be eligible to receive up to $375 million in development, regulatory and sales milestones under the deal announced May 4, and could earn tiered, double-digit royalties on sales of MP0112, a designed ankyrin repeat protein (DARPin) about to enter Phase IIb development. The two companies will collaborate during Phase IIb, after which Allergan will be responsible for all development and commercialization activities. With ‘0112 investigated in both wet age-related macular degeneration and diabetic macular edema, the partners hope to position the molecule as a best-in-class treatment for neovascular eye disease, with a dosing frequency advantage over current wet AMD standards Lucentis (ranibizumab) and Avastin (bevacizumab). Molecular Partners uses its designed repeat protein technology platform to develop small target-binding proteins that perform significant functions in cell signaling and kinase inhibition. Combining some of the benefits of antibodies and small molecules, the Swiss biotech says DARPins offer lower molecular weight and better affinity, stability and selectivity compared to traditional antibodies. –Joseph Haas

Onyx/S*Bio: What was once considered among the biggest deals between a U.S. company and an Asian biotech has come undone. Onyx Pharmaceuticals walked away from its option agreement with Singapore’s S*Bio, covering two janus kinase inhibitors. The tie-up, originally announced in January 2009 and broadened in 2010, cost Onyx $25 million upfront plus an additional $20 million when it was expanded; milestone payments could have made the original deal worth $550 million in total. Onyx had negotiated an option to license, develop and commercialize two drugs, SB1518 and SB1578, in the U.S., Europe and Canada; the former drug was in Phase II for myelofibrosis and had been studied for lymphoma. Onyx’s decision came as the company announced redoubled focus on its potential blockbuster proteasome inhibitor carfilzomib, obtained when it acquired Proteolix in 2009. S*Bio said it will seek a new partner urgently, with a goal of beginning a pivotal Phase III trial on SB1518 later this year. - P.B.

AstraZeneca/Targacept: AstraZeneca opted not to license Targacept’s selective alpha 7 neuronal nicotinic receptor modulator, TC-5619, a schizophrenia treatment. TC-5619 is considered by Targacept to be one of its most promising assets; it recently announced positive results in a mid-stage study in schizophrenia patients. Yet, the compound failed a Phase II proof-of-concept study in attention-deficit/hyperactivity disorder. The biotech has vowed to move forward with '5619 on its own; saying it has the cash to fund further trials by itself. This is not the first time the British pharma has decided not to work with the Winston-Salem, NC-based biotech. Two years ago Targacept announced that another NNR compound, AZD3480, was not going to be pursued in Alzheimer's disease or schizophrenia after two poor mid-stage (Phase IIb) results. In October, AstraZeneca dropped Targacept’s ADHD drug, AZD1446, when it failed to perform better than a placebo in a Phase II trial. Yet Targacept’s future relies largely on the success of AZD5214, a major depressive disorder treatment that is partnered with AstraZeneca and is currently in Phase III trials. -Lisa LaMotta

Pfizer/Rigel: Six years ago, Pfizer licensed a portfolio of preclinical spleen tyrosine kinase inhibitors from South San Francisco-based Rigel. Although the companies identified a promising lead candidate, R343 for allergic asthma, Pfizer has returned all rights to the drug program to Rigel, giving the company full control of the drug as it heads for Phase II trials. Pfizer had paid $10 million upfront and acquired $5 million of Rigel stock at a premium price when the agreement was announced in 2005, although analysts said milestone payments could have added $200 million to the deal's value. With the partnership unraveled, Rigel now says R343 is its most advanced clinical asset; the company did not say whether it would seek a new partner, but claimed it will design a Phase II trial later this year. Rigel said the decision came out of Pfizer's desire to exit the allergy and respiratory area completely. - P.B.

Sanofi-Aventis/Metabolex: Well-funded
, privately-held Metabolex seemed to have scored a coup last June when Sanofi licensed its oral GPR119 receptor agonist, MBX-2982, for type 2 diabetes. But that deal, too, has come apart: In a regulatory filing, Sanofi said it would walk away from the agreement, reportedly after seeing the data from a Phase IIa trial. Full terms of the agreement were never released, but Metabolex will keep the upfront payment from a deal valued that could have been worth up to $375 million including milestones. The licensing was part of Sanofi's push to diversify beyond Lantus, the primary drug in its diabetes franchise. Metabolex, backed by a long list of investors including Alta Partners, Novo Ventures, Venrock Partners and Versant Ventures, hasn't yet said whether it will seek a new partner. - P.B.

1 comment:

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