Friday, December 21, 2012

Deals Of The Week: 'Tis The Season To Be Jolly

'Tis the Season to be Jolly, so deals of the week has finalized its last offering of the year, confident that dire warnings of apocalypse coinciding with the ending of a Mayan calendar are hokum.

Business development executives are also ignoring such suspect perils, and are continuing to close on deals, collaborations and tie-ups, producing their own version of Christmas Cheer.

Europe is one region where holly bedecked halls will hopefully take the mind off austerity and its continuing toll on individuals' livelihoods and the funding of health care. At least no European country has succumbed to defaulting on their debts, yet.

So when office parties clog up your favourite eateries, and shopping in the malls and down the boulevards becomes too much of an assault course, return to your armchair to read who wound up under the mistletoe this week, in ...

Celgene/Sutro: Sutro Biopharma Inc. announced a collaboration Dec. 18 with Celgene Corp. to design and develop optimized antibody drug conjugates (ADCs) and bispecific antibodies (BSAs) for two undisclosed Celgene targets. The San-Francisco antibody specialist will also manufacture a naked antibody owned by Celgene using its high-yield, low-cost cell-free protein synthesis technology. The Celgene deal harnesses the Sutro platform’s strengths in combinatorial candidate design, post-lead optimization, and R&D scale up. Sutro CEO Bill Newell said the platform, using one basic cell-free extract, allowed them to make ADCs, BSAs, naked antibodies, and peptides. Sutro is responsible for the design and production of preclinical materials. Celgene will pay a "substantial" upfront consisting of cash and equity, as well as research, development, and regulatory milestones totaling over $500 million if all programs are successful. Sutro is also eligible for royalties on product sales. Although the deal conforms in some respects with Celgene’s earlier R&D collaborations – the equity investment has become a signature – the New Jersey biopharma will not take a seat on Sutro’s board. Coming on the heels of Celgene’s April collaboration with AnaptysBio Inc. and June tie-up with Inhibrx LLC, the deal represents a deepening of the biopharma’s involvement with next-generation antibody technologies. Beyond the cash and biobucks, Sutro and its investors get the validation of a high profile partner and the gratification of seeing a relentless and disciplined focus on its lab-to-commercial scale protein platform finally pay off – Michael Goodman

Biogen Idec/Duke University and Others: Adding to a commitment undertaken since George Scangos took over as CEO in 2010, Biogen Idec will provide more than $10 million in research funding to a consortium of academic research centers that will seek to identify new approaches to treating amyotrophic lateral sclerosis (ALS). The three-year initiative will encapsulate an earlier initiative with Duke University and the Hudson Alpha Institute to sequence the genomes of 1,000 living ALS patients. The efforts will involve researchers based at Harvard, Yale, Columbia and Rockefeller University, with Biogen Chief Scientific Officer Spyros Artavanis-Tsakonas spearheading the effort through his own lab at Harvard. Biogen’s hope is that by coordinating research and sharing results across a number of different disciplines, understanding of the mechanism of ALS can be accelerated and new targets and approaches to treatments discovered. The Cambridge, Mass., biotech also is involved in trying to develop a therapy for the disease, having licensed worldwide rights in 2010 to Knopp Neurosciences’ dexpramipexole, now in Phase III. – Joseph Haas

MorphoSys/Bio-Rad Laboratories: Germany’s MorphoSys has decided to trade its revenue-generating antibody reagent business for a “laser-like” focus on its therapeutic pipeline. The company announced Dec. 16 that Hercules, CA-based Bio-Rad Laboratories Inc. has agreed to pay €53 million ($69.7 million) to acquire its antibody reagent business, AbD Serotec. The price will include MorphoSys subsidiaries in Raleigh, North Carolina; Oxford, England; and Dusseldorf, Germany. The deal is expected to close in January 2013. The price also includes a non-exclusive license to MorphoSys's HuCAL (Human Combinatorial Antibody Library), a collection of several billion distinct fully human antibodies, for diagnostic applications. The German biotech's revenues have been largely dependent on AbD Serotec and incoming payments from antibody discovery partnerships based on HuCAL; during 2012, AbD Serotec generated 28%, or €13.7 million, of MorphoSys revenues. The deal will add AbD Serotec’s more than 15,000 antibodies, kits, and accessories to Bio-Rad’s portfolio of research and clinical diagnostic products. Bio-Rad will also receive milestone payments or royalties related to the AbD Serotec business, which was working with more than 20 diagnostic companies to develop antibodies for diagnostic use. MorphoSys will continue to rely on revenues from its HuCAL therapeutic partnerships. It has more than 60 of these with partners such as Pfizer Inc., Novartis AG, and Daiichi Sankyo Co. Ltd., which generated revenues of €32.1 million in the first nine months of 2012. – Lisa LaMotta

Amgen/ImmunoGen: With ImmunoGen’s T-DM1 (trastuzumab emtansine) on the verge of approval with collaborator Genentech/Roche, the company is continuing to attract partners for its targeted antibody payload (TAP) technology, which delivers a targeted cancer-killing agent to tumor cells. On Dec. 19, Amgen licensed the rights to use Immunogen's maytansinoid TAP technology to develop an anticancer therapeutic to a third target, having licensed rights to use the technology for two other targets in 2009. The original licensing option agreement was struck between the two companies in 2000. With each license Amgen chooses to option, ImmunoGen receives an upfront payment of $1 million and is entitled to $34 million in milestones, plus sales royalties. While ImmunoGen has brought in over $300 million in cash from partnerships over the last decade, the company has been trying to shift its focus to its own internal pipeline. It has three compounds in the clinic, with its lead compound, IMGN901, in Phase II in small cell lung cancer. - Lisa LaMotta

Intercell/Vivalis: A new European vaccine and antibody specialist, Valneva, will be formed by the proposed merger of two publicly quoted biotechs, Austria's Intercell AG and France's Vivalis, announced Dec. 17. Valneva will combine the product development and commercialization skills of Intercell with the vaccine cell line technology of Vivalis, and will become one of the few remaining independent European vaccine companies, after a string of takeovers and mergers in the sector over the past five years or so. Intercell develops and markets the Japanese encephalitis vaccine Ixiaro/Jespect, whose sales growth has not been as smooth as the company expected. In 2012, vaccine sales are likely to be 10% to 20% lower than expected, around €26.5 million to €28.5 million. Vivalis, whose EB66 embryonic duck cell line is used by numerous pharmaceutical companies to produce antibodies and vaccines, has also seen revenues decline in the first nine months of 2012 because of the ending of some manufacturing licenses. Through a stock merger, Vivalis shareholders will end up with 55% of Valneva. Intercell shareholders will also receive an earnout relating to the successful development of a Pseudomonas aeruginosa vaccine that the Austrian company's collaborator Novartis is currently evaluating in a Phase II/III clinical study. And a €40 million ($53 million) rights issue supported by France's strategic industry investor, Fonds Strategique d'Investissement (FSI), will follow the closing of the merger in May 2013. – John Davis

Janssen/Evotec: Janssen Pharmaceuticals Inc. has acquired an exclusive worldwide license to Evotec AG's NR2B subtype NMDA-antagonist portfolio of drug candidates, which have potential in the treatment of depression. Evotec will receive an upfront of $2 million from Janssen, with a further $6 million paid upon confirmation of certain preclinical properties of the candidates. The Hamburg, Germany-based company could also receive additional milestones totaling up to $67 million upon successful completion of certain clinical, regulatory and launch events for a first product. Additional, reduced milestones would be paid for the development of additional indications and/or compounds. Furthermore, Evotec could also receive an additional $100 million in commercial milestones depending on certain sales thresholds, and royalties that could be as high as double-digit on sales. However, a portion of the payments will be shared with Roche, which originally discovered the compounds. Evotec developed the compounds from discovery through to clinical studies, and Roche entered into an agreement in 2009 with Evotec on Phase II studies of portfolio compounds in treatment-resistant depression, although that collaboration ended in 2011 because of difficulties the study protocol caused in recruiting patients. - John Davis

MedImmune/Progenics: AstraZeneca's biologics arm is in-licensing Progenics Pharmaceuticals’ Clostridium difficile late-stage preclinical program as part of MedImmune’s search for monoclonal antibody candidates to prevent and treat bacterial infections. Under the deal, MedImmune will assess the potential efficacy and safety of antibodies targeting C. difficile toxins. Preliminary research suggests the antibodies are highly potent against most of C. difficile strains found in the U.S. and Asia, and are potent against hypervirulent strains. For Progenics, the move reflects its decision in 2011 to focus on its oncology programs. The biotech’s pipeline candidates include PSMA ADC, a human monoclonal antibody-drug conjugate in Phase II for prostate cancer, and preclinical stage novel phosphoinositide 3-kinase (PI3K) inhibitors for cancer. Clostridium difficile infections are the leading cause of hospital-acquired bacterial infections in the U.S. and are associated with more than 20,000 deaths and more than $1 billion in healthcare costs annually. The infection most often occurs in people who have been hospitalized, although up to 28% of cases are community-acquired through contaminated soil, water, pets, cattle, and food. – Sten Stovall

Merck/GE Healthcare: Merck & Co. Inc. is pitted in a tight race with Eli Lilly and Co. to bring the first BACE inhibitor to market for Alzheimer’s disease. The company announced Dec. 18 it has partnered GE Healthcare to use that company's imaging agent flutemetamol as a potential companion diagnostic to its BACE inhibitor, MK-8931. The announcement comes on the heels of Merck’s Dec. 3 announcement that it had started a Phase II/III study of the drug. Under the GE deal, Merck will use flutemetamol – a positron emission tomography (PET) imaging agent – to select patients for clinical trials of MK-8931, particularly a future trial in prodromal Alzheimer’s disease patients. That’s the phase in which patients have only mild cognitive impairments and have not yet been diagnosed with Alzheimer’s disease. Flutemetamol is being developed by GE to detect beta amyloid deposits in the brain, the buildup of which is believed to be a hallmark of Alzheimer’s disease. In Phase III testing, flutemetamol images showed a strong concordance with Alzheimer’s disease-associated beta amyloid brain pathology demonstrated in brain autopsy and in vivo-cortical biopsies, according to GE. Lilly already markets the PET tracer Amyvid (florbetapir), which shows the amount of beta-amyloid plaque in the brain, for use in diagnosing Alzheimer’s disease, following U.S. FDA approval in April this year. Merck said it opted to partner with GE on flutemetamol because the company had a long history in imaging, and access to infrastructure including PET scanners and cyclotrons that produce the radioactive isotopes used in the procedure. GE continues to own rights to the agent, is studying it independently, and plans to file the product with regulators in the near term - Jessica Merrill

Pfizer/Halozyme: The world’s biggest pharma is paying San Diego biotech Halozyme $8 million upfront for a worldwide license to Halozyme’s Enhanze technology to produce a pair of proprietary biologic drugs that can be administered subcutaneously. It is an earn-out-heavy deal, with Halozyme able to receive future licensing fees for up to four more targets, as well development, regulatory and sales-based milestones that could reach $507 million and royalties on net sales of any products reaching market. The targets and indications for the first two drugs to employ Halozyme’s recombinant human hyaluronidase enzyme (rHuPH20) technology were not disclosed, although a release said one product would be for primary care and the other for a specialty care indication. Future target selections by Pfizer can be made on an exclusive or non-exclusive basis. By addressing volume limitations, the Enhanze platform enables biologics which otherwise might need to be administered intravenously to instead be subcutaneous injections. Halozyme says the delivery technology also could reduce the need for multiple injections, improve patient convenience and reduce health care system costs. The deal is positive news in a year that saw the company's fortunes dragged down by a delay and subsequent FDA complete response letter around Baxter's HyQ immunoglobulin product, which uses the Halozyme technology. – Joseph Haas

Merck/Hanwha Chemical: Is Merck stepping back from biosimilars? That’s a question some industry stakeholders are asking after Korea’s Hanwha Chemical disclosed Dec. 18 that Merck had terminated a deal for Hanwha’s biosimilar of Amgen/Pfizer’s blockbuster Enbrel (etanercept). Merck had acquired developmental and commercial rights to Hanwha’s late-stage biosimilar in 2011 (in all markets except Korea and Turkey), surprising many in the West who had not thought of the Korean conglomerate as a biopharma player. Hanwha received an undisclosed upfront payment and was eligible for technology transfer and regulatory milestones, and tiered royalties on sales. Total upside for the deal was $720 million, Hanwha said at the time. Since then Hanwha has moved forward in its home market, submitting its Enbrel biosimilar for KFDA approval several months ago after completion of local Phase I and Phase III trials. So what happened? A “routine pipeline review,” Merck told our sister publication PharmAsia News, emphasizing that its decision did not reflect a change in biosimilars strategy or commitment. Yet some may wonder. As reported first in the IN VIVO Blog, Merck cut bait on Merck Bioventures earlier this year, deciding to merge the biosimilars unit back into its biologics and vaccines division. And perhaps more to the point, Amgen threw a wrench in development plans for Enbrel biosimilars late last year when it announced a stealth patent that could keep competitors off the U.S. market until 2028. So what’s next? Merck says it will continue to pursue a portfolio of biosimilars and novel biologics that meet unmet needs, including a previously disclosed biosimilar of Roche’s rituximab. But the emphasis, at least to our ears, seems to be leaning more to the novel these days then the similar. As for Hanwha, it says it will look for other multinational partners, not only for etanercept, but also for the next biosimilar in its pipeline, Roche’s Herceptin (trastuzumab). In other words, you better stay tuned. -- Josh Berlin

mistletoe by lovelorn poets, via flickr/creative commons

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