Friday, November 04, 2011

Deals of the Week's Stamp Of Approval

FDA made a pre-emptive strike this week – perhaps a move to forestall an Occupy FDA protest?

Making the most of the (political) capital it has, the agency put out a glossy report on its FY 2011 approval performance, noting that between Oct. 1, 2010 and Sept. 30, 2011, the agency cleared 35 innovative drugs. IN VIVO Blog can’t help but point out that when the numbers haven’t been as good, the fanfare has been, um, lacking.

It’s been clear for some time that 2011 was stacking up to be a stellar year for positive nods from the agency: as of October, FDA had already tied the 27 novel drugs and biologics cleared for marketing in all of calendar year 2010. Though the second-half has fewer review deadlines than the first, 2011 still stands to be a record year, helping defray criticism about an overly safety conscious regulatory body.

You can’t fault FDA’s timing. In what’s surely a happy accident, the news coincides with ongoing negotiations over the reauthorization of the Prescription Drug User Fee Act. Certainly the official report and positive press could deter Congress from tinkering with the legislation, something that might have been easier given the negative coverage bandied about.

But the presser wasn’t only about placating Congressional types. An underlying message also seemed to be that industry should stop its incessant FDA bashing. And just to show that it’s above holding a petty grudge, FDA even went so far as to share a little credit for its success with biopharma companies.

“None of FDA’s accomplishments would be possible without the innovation and hard work of large and small biopharmaceutical companies alike. Not only did the drug applications that the industry submitted to FDA represent important medical advances, but their generally high quality permitted FDA to reach an approval decision, in many cases, after a single cycle of review.”
Well, isn’t that special?

No doubt, biopharmas will find other reasons to point fingers – and this won’t stop the hand-wringing of the med-tech crew. Launching in Europe first via a CE mark is now a preferred strategy for many device companies as they juggle how to satisfy safety measures mandated by FDA.

Maybe the PR was designed to curry favor, or remind folks that FDA is the government’s Rodney Dangerfield. Still there’s no denying the agency is under continued budgetary pressure. And really, does anyone in the industry want to see PDUFA held hostage to partisan politics?

In the interim as you muse over the specifics of FDA’s approval memo, we hope Deals Of the Week garners a stamp of approval. It’s that time again.

Bristol-Myers Squibb/Aslan: Out-licensing alert! Bristol-Myers Squibb has formed a partnership with Singapore-based Aslan Pharmaceuticals to hasten the development of an early-stage compound, BMS-777607, an oral MET receptor tyrosine kinase inhibitor that it considers promising, but not core to the big pharma’s focus on more advanced oncology compounds. The Bristol compound is the second acquired by privately held Aslan, established last year by former AstraZeneca executive Carl Firth to in-license and develop early-stage compounds in oncology, respiratory and inflammatory indications and to take advantage of efficiencies in conducting trials in Asia. The companies didn’t release financial terms for the Nov. 3 deal, but Bristol said Aslan will run and fund development of ‘607 in gastric and lung cancer. Aslan obtains exclusive rights to develop and commercialize the compound in China, Australia, Korea and Taiwan, while Bristol retains Japanese rights to the drug. As opposed to its “String of Pearls” acquisition strategy, Bristol referred to the Aslan arrangement as part of its “Oyster” strategy. (Nope, we ain't gonna go there.) The goal of "OS"is to seek partners to run and fund early development of assets BMS presumably does not want to take forward itself. This is Aslan’s second acquisition – in July, it in-licensed HER2/EFGR inhibitor ARRY543 from Array BioPharma Inc.—Joseph Haas

AgonOx/MedImmune: Tiny Portland, Ore.-based startup AgonOx has been studying the OX40 receptor, a tumor necrosis factor superfamily member whose activation appears to trigger immune responses useful in fighting cancer. The company’s work has caught the attention of MedImmune, which will pay an undisclosed amount to develop oncology drugs using AgonOx’s platform. Although the companies aren’t releasing many details, MedImmune will apparently lead continuing preclinical and clinical studies on one OX40 agonist program, while supporting ongoing research on OX40 at Portland’s Providence Cancer Center. AgonOx has also studied one drug, an anti-OX40 monoclonal antibody, in 30 human patients over the past year, and further trials are in progress. In September, AgonOx said it received a patent covering OX40-related ligand fusion proteins for use in cancer. The company is seeking partners for combination therapies, potentially involving cytotoxic compounds, tumor ablation methods, and other immunologic therapies. Privately-held AgonOx hasn’t named any outside investors, but has acknowledged support from the Prostate Cancer Foundation. – Paul Bonanos

GlaxoSmithKline/DOJ: GSK's toughest negotiations this year have been with the federal government. On Nov. 3, the drug maker announced it had reached an agreement worth $3 billion (in principle) to resolve three separate government investigations tied to the following: its development and marketing of Avandia; sales and promotional practices relating to Wellbutrin SR, Advair and 7 other top selling products from January 1997 to 2004; and its nominal price exception to the best price reporting requirements of the Medicaid drug rebate program. Just to put the dollar amount in perspective, that $3 billion is more than a quarter of GSK’s Q3 2011 revenue of £7.1 billion, and in terms of potential deal value is the pharma's biggest transaction of the year thus far. Moreover, the sum is on top of the $750 million settlement GSK and DOJ reached last year tied to good manufacturing praction violations at a Puerto Rico facility. In case you are wondering, the new agreement breaks Pfizer’s 2009 record $2.3 billion settlement, which resolved allegations of off-label marketing of four drugs and kickbacks to health care providers involving nine other drugs. Still to be determined: whether any of GSK's officers will face criminal charges. The government has said for the past two years that it intends to hold individual executives responsible for health care fraud. Pfizer escaped such a fate even though the government slammed it for repeatedly violating the law. GSK attorney Lauren Stevens had previously been indicted for obstructing an FDA investigation of off-label marketing of Wellbutrin SR and making false statements. A judge acquitted her in May.--Brenda Sandburg

Celgene/Quanticel: Forget the most interesting man in the world, methinks Celgene is gunning for most interesting deal maker of 2011 award. This week comes news that Celgene is teaming up with privately-held Quanticel Pharmaceuticals in a deal that is part option-to-acquire, part financing, and all around interesting. Versant Ventures has launched Quanticel, a start-up with genomic analysis technology aimed at discovering and developing cancer drugs that target the unique genetic makeup of patients' tumor cells, after incubating the idea for more than a year. The tie up with Celgene is unusual, underscoring how VCs are desperately seeking new biotech investment models that tie early stage companies closer to potential pharma acquirers. Although details regarding the deal were light, what's know is that Celgene is committing $45 million to Quanticel in return for an undisclosed equity stake in the biotech as well as an exclusive three-and-a-half-year technology license. Celgene has sway over Quanticel in another way: more than one exclusive time-based option to buy Quanticel outright. "We hope it ends in an acquisition by Celgene," said Quanticel CEO Stephen Kaldor. "That's the design." All parties involved declined to discuss the size of Celgene's ownership stake or the details of its acquisition options. But the arrangement effectively limits Quanticel's potential buyers to one and thus caps the potential return for Versant. "This is a different risk-reward ratio than traditional venture," says Versant managing director Brad Bolzon. The trade-off, he says, is a higher ownership stake for Versant than it would have in a syndicated deal. (The amount of Versant's investment was also left undisclosed.) For more see coverage in Elsevier's Pink Sheet Daily and November's START-UP. --Alex Lash

Pfizer/Ablynx: Ablynx said today that Pfizer had returned all rights to the companies’ anti-TNF-alpha nanobodies program, which emerged over the last five years from a 2006 deal between Ablynx and Wyeth; that deal was extended in 2010 and has thus far generated two clinical candidates. Ablynx recovers full rights to ATN-103 (aka ozoralizumab), which this past May achieved positive Phase II proof-of-concept data, and PF-05230905, a pegylated backup compound in Phase I, along with clinical supplies of ‘103, IP and knowhow around the programs and manufacturing. In return Ablynx will owe Pfizer a share of milestones received from a future partnership around these assets, capped at $50 million, plus royalties. The ‘103 program was among Ablynx’s furthest along nanobodies (the camelidae-inspired, single-domain, antibody-derived proteins are so named because of their small size, and, presumably, because “Camelbodies” just didn’t sound right), and possibly its biggest commercial prospect. As such the market reacted poorly to the news today, sending Ablynx shares down 18% on the day to levels not seen since the company began public trading in 2007. During a call with analysts today CEO Edwin Moses said the assets were still “very valuable” before quoting a “former Pfizer SVP”’s morning email to the company that suggested the development would be positive for Ablynx. In fact, he suggested, were Ablynx still working with an un-Pfizerized Wyeth, the asset might "be in Phase III by now," and that plenty of companies will show interest in the newly-partnerable program. Pfizer, he noted, has other options, including its late-stage JAK3 inhibitor, and a different senior commercial team committed to that program. That may be true, but unless the company opts to find a partner straight away, it could also be expensive transition for Ablynx and have an impact on the progress of the company’s existing pipeline. Moses noted that the company would almost certainly conduct a strategic review “in the coming weeks” to reprioritize, but would probably not cut its Eur60-70 million R&D budget.--Chris Morrison

Image by flickrer Avius Quovis, courtesy of creative commons. FDA commentary written by Mary Jo Laffler and Derrick Gingery. Editing this week by Ellen Licking

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