Friday, September 27, 2013

Deals Of The Week's Takeaway From PSA: Optimism With Aches

The federal government may be on the verge of a shutdown, with ‘unprecedented implications’ for new drug reviews, as our friends at Prevision Policy in D.C. put it in a note on Sept. 27. But in New York, the overall mood among investors and industry stakeholders attending Elsevier Business Intelligence’s 23rd annual PSA: The Pharmaceutical Strategy Conference last week was uncharacteristically and surprisingly upbeat.

Surprisingly, because anyone who has been involved with pharma for even a little a while has heard investors of all stripes rail against FDA, EMA and regulatory agencies in general as a chief contributor to industry’s malaise. Yet, industry experts at PSA were gushy about both FDA and the general state of R&D creativity.

Pharma’s R&D woes are well known – but they are on the scale of “fevers and chills and aches,” said McKinsey director Ajay Dhankhar, who opened the meeting on Sept. 24 with a talk on the “new math of innovation” – not death rattles.

Better than breaking down the R&D model and starting over at the core, as some have claimed necessary, he suggested that the industry needs to engage in “punctuated evolution” – in which it experiments in a few areas and takes big leaps. In other words, he argued, minor improvements in multiple areas could add up to big enough swings in productivity, which can put industry on solid footing and allow for the kind of leaps forward that result in longer-term, larger improvements in growth.

The IPO bull market obviously colors perceptions, but some of the leading institutional investors, empaneled to discuss investor perceptions on Sept. 24, even had praise for the much-maligned FDA and in particular agency commissioner Janet Woodcock. The quality of communication between FDA and companies has improved significantly, noted RA Capital’s Rajeev Shah, with the agency becoming more predictable, a change that is critical to investors. Speaking of the bull market, investors agreed fundamentals remain strong. The key market catalysts to watch, they said, are the performances of the “big four” biotechs: Biogen Idec, Amgen, Gilead Sciences., and Celgene.

At the other end of the investor spectrum, venture capitalists are also optimistic, a tone that VC panelists conveyed at PSA and one that is supported by more substantial quantitative, albeit nuanced, data compiled by our sister publication START-UP in its September 2013 issue.

Even opportunities in fraud-investigation-rattled China came in for kind words, despite the wave of publicity about big pharma’s compliance problems there. Heads of three Chinese companies that have commercial deals with Western pharma to sell innovative drugs in China argued that market remains a great growth story, with plenty of opportunity, in light of the ongoing health reform initiatives there.  Compliance woes for some are good news for others, and while “at the moment there is a lot of focus on this, fundamentally, it will not change the attractive situation in China for the pharma industry,” said Friedhelm Blobel, CEO of SciClone Inc., a U.S.-Chinese hybrid company that partners with Western companies seeking to sell their drugs in China. For those interested in more on China, attend Elsevier's upcoming PharmAsia Shanghai Summit in October.

About 250 attended the meeting and for those who weren't there, read about it in "The Pink Sheet" and twitter, under hashtag #PSA13. Meanwhile, as PSA strove to gain a sense of trends shaping deals to come, here are a selection of this week's deals that have happened: --Wendy Diller. (Note of thanks to Takeda for photo of Tachi Yamada speaking at PSA 2013)

AbbVie/Galapagos: AbbVie had a busy week, announcing its second drug-development collaboration in as many days on Sept. 24. The new deal is an alliance to develop cystic fibrosis therapies with Galapagos, marking the second tie-up between the companies in two years. The deal  extends from discovery through registration, with a goal of improving upon competitor Vertex's nascent success in addressing the root causes of the disease with small-molecule drugs. Vertex has investigated compounds that mediate mutations in the cystic fibrosis transmembrane regulator (CFTR) protein. That company made a big splash with CFTR potentiator Kalydeco (ivacaftor), a channel-opening drug that addresses the G551D mutation in CF patients, when it obtained FDA and EU approval last year.

The goal of the AbbVie/Galapagos collaboration is to develop both CFTR potentiators and correctors, moving a potentiator molecule into Phase I by the end of 2014. Galapagos will be in charge of discovery and Phase I and II development, with R&D input from AbbVie. The North Chicago, Ill.-based pharma currently markets CF drug Creon (pancrelipase), which yielded U.S. sales of $196 million over the first six months of 2013, up nearly 26% from its 2012 pace. AbbVie’s previous deal with Galapagos is part of its search for a pipeline replacement for top seller Humira (adalimumab), which loses patent protection in 2016. In 2012, it paid $150 million up front for Galapagos’ selective JAK1 inhibitor GLPG0634 for RA. - Joseph Haas

Ablynx/Merck Serono/AbbVie: Drug-discovery company Ablynx had a good week, unveiling two R&D alliances with key big pharma clients that could lead to novel Nanobody pipeline assets. On Sept. 23, the Belgian biotech unveiled a global license pact with AbbVie to develop and commercialize the anti-IL-6R Nanobody ALX-0061 to treat inflammatory diseases.

Two days later, Ablynx and Merck Serono announced a multi-year research alliance that could lead to at least four co-discovery and co-development collaborations and bind the Belgium-based Nanobody specialist closer to the German drug maker. Under their latest pact the biopharma division of Germany’s family-controlled Merck KGAA will fund a discovery group at Ablynx numbering up to 30 people, and the two will select disease targets jointly. The team will seek to identify Nanobodies to tackle these during a four-year alliance. Merck Serono will provide €25 million ($33.8 million) in funding over the first four years, including an initial payment of €11.5 million, with an option to extend the alliance a further two-and-a-half years if it’s successful. The Nanobodies R&D pact is that duo’s fourth.

The first, signed in 2008, focused on two targets in oncology and immunology, and was followed by a second in 2010 that added a new program for an inflammatory diseases target. In November 2011, they entered a third agreement to co-discover and co-develop Nanobodies against two targets in osteoarthritis. The R&D collaboration will span all of Merck Serono’s core R&D fields, including oncology, immuno-oncology, immunology and neurology. It will aim to deliver at least six programs with proof-of-principle in a relevant animal model. If there is sufficient in vivo proof-of-principle generated by the programs, Merck Serono will commit to taking at least four programs forward with Ablynx in co-discovery and co-development arrangements. If all goes to plan, the pact will run six-and-a-half years and generate cash in-flow of up to €100 million for the Belgian Nanobody specialist. Under its deal with AbbVie, Ablynx will receive an upfront payment of $175 million, which will be earmarked for clinical development of ALX-0061. If the candidate reaches certain development, regulatory, commercial and sales-based milestones, Ablynx is eligible for $665 million in additional milestone payments, along with double-digit tiered royalties on eventual net sales. - Sten Stovall

Servier/Egis: Being the first company in Europe to bring a biosimilar monoclonal antibody – infliximab – to the market could very well have provided the spark to bring to an end the 18-year arm's-length relationship between the Hungarian generics company Egis Pharmaceuticals and its majority shareholder, the private French company Servier.

Servier has offered 28,000 Hungarian forints, or around $125, a share for the 49% of Hungary’s Egis that it does not own, the privately owned French company announced Sept. 24. Egis no longer needs a listing on the Budapest Stock Exchange to raise funds, Servier said, suggesting the buyout was a tidying-up exercise. But with Egis’ sales revenues currently rather flat because of regulatory and reimbursement changes in Hungary and other countries in Central and Eastern Europe, and a growing appreciation of the future sales potential of the biosimilar infliximab product, Servier’s move appears well-timed.

Egis entered into an agreement in 2010 with South Korean company Celltrion to market its biosimilar infliximab as Remsima in Central and Eastern Europe, and as Flammegis in the Commonwealth of Independent States (CIS), countries such as Azerbaijan and Belarus. The European Commission approved Remsima, and the same product from Celltrion’s Western Europe licensee, Hospira, on Sept. 10. Servier’s offer is valued at $483 million, and is set to close over the coming months. The company noted that the offer, which was at a 33% premium over the previous day’s share price, was generous and would not be revised or updated. - John Davis

Allergan/Medy-Tox: The maker of Botox is defending its position as the market leader in the neuro modulator space with a global licensing deal – excluding Korea – with Korean pharmaceutical company Medy-Tox. Allergan agreed to pay $65 million upfront, $116.5 million in potential development milestone payments and $180.5 million in commercial milestones, as well as royalty payments for the right to develop and commercialize neurotoxin product candidates, including a liquid injectable.

The deal fits into Allergan’s sweet spot since Botox is its biggest drug; the product, which until recently derived most of its sales from cosmetic applications as a wrinkle reducer, brought in $970.9 million in the first half of 2013. The company has said that Botox has taken a 77% share of the neuro modulator market, which grew by 13% in 2012. Currently, Botox has eight indications that include migraines, overactive bladder and excessive sweating. Yet, Botox is a dry powder that physicians need to reconstitute – the liquid injectable could offer a more convenient alternative for some docs. Medy-Tox, founded in 2000, is the maker of a Botox-like product dubbed Neuronox that has been on the Korean market since 2006, and has next-generation botulinum toxin products in its portfolio. The company has plans to enter Western markets in 2014 with the ambition of becoming a leader in the botulinum toxin market. - Lisa LaMotta

Novo Nordisk/Adimab: For the third time this year Adimab has non-exclusively licensed its antibody discovery platform to a large biopharma, adding Novo Nordisk to previously announced tech-transfer partners GlaxoSmithKline and Biogen Idec. As with those previous deals, the financial specifics were not disclosed, but Adimab gets an upfront fee, annual licensing payments, R&D milestone payments and royalties on any products developed using its technology. Adimab’s business development plan involved first signing tightly circumscribed deals with drug developers whereby it would quickly provide its partner with monoclonal antibodies (and eventually bispecifics, antibody-drug conjugates and antibody mixtures as it added to its technology arsenal) against one or two specific targets. Novo Nordisk, for example, struck a deal two years ago to sample the Adimab platform around two undisclosed targets. That, and upwards of a dozen other early deals, were designed as demonstration projects, and Adimab’s goal for years has been to whet partners appetites for its technology, eventually earning big paydays by convincing companies like Novo Nordisk to internalize the discovery platform. The small, Lebanon, N.H.-based biotech said it would become sustainably profitable this year based on payments from its first two tech transfer deals, with GSK and Biogen, announced simultaneously in July. This year, the company plans to pay its venture investors their first dividend – a rare feat for a privately owned, discovery-focused biotech. - Chris Morrison

CRT Pioneer Fund/Bacit/Sareum: A co-funding pact to develop a novel class of cancer drugs called CHK1 inhibitors was announced in Britain this week by Cancer Research Technology Pioneer Fund and London-listed BACIT Limited and oncology drug discovery specialists Sareum Holdings. CHK1 inhibitors control a cancer cell’s response to DNA damage. Blocking CHK1 could boost the efficacy of chemotherapy drugs by blocking repair of the DNA damage caused by these drugs, but without harming healthy cells.

It’s hoped the candidate CHK1 inhibitor potentially could treat a range of cancers including pancreatic, bowel and non-small cell lung cancer in combination with DNA-damaging chemotherapy drugs and radiotherapy. The inhibitor also potentially could treat certain neuroblastoma and acute myeloid leukemia types when dosed alone. The candidate inhibitor originates from research in the Cancer Research UK Cancer Therapeutics Unit at London’s Institute of Cancer Research (ICR) by scientists funded by Cancer Research UK – the world’s largest charity - working alongside Sareum researchers and in collaboration with Cancer Research Technology (CRT), which is the commercial arm of Cancer Research UK.

Much of the further work funded by the new investment, announced Sept. 24, will be carried out at The Institute of Cancer Research. The drug candidate is expected to be taken into clinical development at The Royal Marsden NHS Foundation Trust. Rights to the preclinical program have been licensed into Cancer Research Technology Pioneer Fund from CRT and the ICR. Under the terms of the deal, CPF obtains worldwide rights to the preclinical CHK1 inhibitor program and is responsible, for future development and commercialization, funded by CPF, BACIT and Sareum. CRT and the originating research partners, Sareum and the ICR, are entitled to an upfront fee plus success milestone and royalty payments. Financial terms of the license are not disclosed.  As part of the agreement Sareum said it expects to commit up to £800,000 ($1.3 million) to the program in its current financial year. The partners say the overall funding will enable the project to move quickly towards, and potentially into Phase I clinical trials, and the successful outcome should allow for the further development and commercialization of a novel and broadly applicable cancer treatment.

The CRT Pioneer Fund is a £50 million ($80.4 million) fund that has been established with Cancer Research Technology and the European Investment Fund to bridge the investment gap between cancer drug discovery and early development. BACIT Limited is a self-managed, closed-ended investment company listed on the London Stock Exchange. Sareum, headquartered in Cambridge U.K., produces targeted small-molecule therapeutics, focusing on cancer and auto-immune disease. - S.S.

Friday, September 20, 2013

Deals Of The Week Watches GSK, Non-Profit Partner Adhere On Medication Management

On the face of it, GlaxoSmithKline PLC’s deal with the non-profit Community Care of North Carolina to improve medication management seems like a pro forma marketing initiative between an aggressive Big Pharma and a local provider of health care services.

The agreement, announced Sept. 18, calls for the drug company and the care network to develop health information technologies that help providers identify patients with medication management problems and determine solutions for them.

But look one step further and the tie up points to how Big Pharma is responding to changing dynamics among its core customer base. As reimbursement emphasis shifts from paying for volume to paying for value, biopharma has been working furiously to obtain more data on the effectiveness and cost savings benefits of the drugs in its R&D and commercial portfolios. But it is struggling against payer skepticism over bias built into its data, the rapidity of change, and a perception that, currently, reshaping of the health care system is largely in the hands of payers, providers and politicians. Many of the initial risk-shifting arrangements, endorsed by the Patient Protection And Affordable Care Act and now underway as Accountable Care Organizations, for example, were formed by providers and/or payers, with pharma limited to the role of supplier.

This new initiative places GSK in a different role entirely. While it is a small endeavor, it has endorsement of senior management, says senior director of U.S. payment and delivery reform, Jon Easter, who spearheaded the effort and whose job is to help the company learn from new health care delivery systems and payment models. The initiative is strictly about learning - there’s no marketing component and any independent business opportunity would be a secondary benefit.

CCNC coordinates care across roughly 1,000 health care provider types, including 110 hospitals and more than 1,700 primary care practices, serving 1.5 million people in North Carolina. GSK is dedicating data analytics experts and knowledge of comprehensive medication management to the collaboration, and CCNC is contributing experience in tailoring medication management interventions, gleaned from years of experience with patients with drug therapy problems. If all goes well, the partners, who began working on the project earlier this year, will  make a decision on whether their IT is marketable broadly to health care systems across the U.S.

The funding and staff time are shared evenly, as is ownership of any emerging intellectual property. The IT system will allow health care providers and payers to easily analyze individual patients’ medication challenges in real time and help determine which interventions in which setting of care would yield optimal results.

CCNC’s VP, Pharmacy Programs, Troy Trygstad, who has led his organization’s multi-year efforts to optimize medication management and resources, says a confluence of several trends made the timing ripe for such a relationship. “It was where we are at in the maturation of our medication management process. And, regardless of ACA, the larger system is going through a need to do more with less. Also, pharma is investing in figuring out how to work with healthcare ecosystems to maximize value.”

GSK, in a press release, distinguished the partners’ approach as relying on “small data,” as opposed to “big data” solutions. “Big data” currently dominates any conversation about the use of IT systems in health care, but the partners are banking on internally developed predictive analytics and algorithms to create customized approaches that allow doctors or other care givers to determine, sometimes in advance, what a patient’s specific barriers are to adherence, enabling them have meaningful conversations with patients in real time. Providers will have access to select information such as patient prescription fill history and hospital data.  Importantly, the system is also designed to work in a range of different settings, across multiple IT systems, avoiding integration and inter-operability issues that have been a drain on many big data approaches.

The collaboration does not involve specific patient information changing hands between the organizations and is independent of GSK’s core drug business. A recent favorable Office of Inspector General ruling in August on another manufacturer’s hospital discharge venture, designed to reduce hospital readmission rates, may have helped pave the way for the partners’ commitment. The ruling said that such a service did not run afoul of federal anti-kickback laws.

Pilot programs are underway. CCNC is already using the system across its network. The partners also have established a Community Medication Management Collaborative with the Indiana University Health Bloomington Hospital involving roughly 50,000 patients who use the hospital and its outpatient clinics and services. That pilot consists of two parts: the logistics and analytics platform supplied by the CCNC/GSK partnership and a pharmacy care arm, in which CCNC is providing its process and technical insights to Bloomington to incorporate into the latter’s own pharmacy care protocols as appropriate.

The deal points to how GSK – and potentially other drug companies – might leverage their expertise in drug-related data analytics to help various sectors of the healthcare system work with ‘adjacencies’ to adjust to an environment in which core constituents are increasingly driven by the need to demonstrate the value of their products and services in improving patient outcomes. Other companies, such as Merck & Co. Inc., have undertaken different approaches, establishing revenue-generating health care IT ventures; Merck's Vree Health helps hospitals deal with pressures of ACA’s emphasis on reducing hospitals’ 30-day readmission rates. The common thread: all  work with stakeholders on figuring out systemic value while remaining entirely separate from their core drug franchises.

Easter said GSK agreed to work with CCNC not only because the non-profit is a neighbor and already provides care to thousands of local GSK employees, but also because it is nationally known for its cutting-edge work in patient medical homes and medication management.

As GSK works to understand the big picture in medication management, select deals this week centered around the smaller, scientific universe.--Wendy Diller

Chiesi/Cornerstone: Italy’s mid-sized pharmaceutical company Chiesi Farmaceutici will purchase the 40% of North Carolina-based Cornerstone Therapeutics Inc. that it didn’t already own, according to a Sept. 16 announcement. Chiesi will pay $9.50 per share in cash, and, in exchange, obtain a sales organization based in the U.S.  According to an SEC filing in February, this transaction has been underway for some time. Months ago, Cornerstone revealed that Chiesi had been willing to pay $6.40 to $6.70 a share for the piece of the company.

The two companies paired up in May 2009 when Chiesi granted Cornerstone an exclusive U.S. license to sell its porcine-derived lung surfactant Curosurf (poractant alfa) for 10 years. The drug was first approved in the U.S. in 2009 for the treatment of respiratory distress syndrome in premature infants. At the time, Cornerstone also obtained the first right of refusal on any drugs or technologies that Chiesi plans to launch in the U.S. In return, Chiesi received 11.9 million Cornerstone shares valued at $70 million based on the company’s stock price at the time. Chiesi also gave Cornerstone $15 million in cash and agreed to buy another 1.6 million shares from Cornerstone’s CEO and EVP of manufacturing for $5.50 each, a transaction that totaled $8.8 million. As a result of the transactions, Chiesi became the majority shareholder.

This is Chiesi’s second acquisition in as many months – the company bought Denmark’s Zymenex AS in August for its Phase III rare disease therapy Lamazym (rhLAMAN). The structure and financial terms of the acquisition were not disclosed.--Lisa LaMotta 

Teva/Cancer Research Technology: Teva Pharmaceutical Industries Ltd. has teamed up with Cancer Research Technology Ltd. to study and develop cancer drugs that modulate DNA damage and repair response processes in cancer cells.

The three-year alliance between Cancer Research UK’s technology transfer arm and Israel-based Teva echoes one struck between CRT, AstraZeneca PLC and the Cancer Research UK Paterson Institute for Cancer Research at the University of Manchester to develop potential new drugs to target a key protein involved in DNA damage response (DDR), in a deal that would give AstraZeneca first rights to any molecules discovered and builds on an earlier 2010 collaboration.

No financial details were disclosed for either of CRT’s projects in DDR. Both reflect CRT’s expanding role as a bridge builder between research-based Big Pharma and academia.

Together with Cancer Research UK, CRT has created a hub of expertise in DDR-related basic, translational, and clinical research that is based on Cancer Research UK's extensive network of top UK universities, and its five cancer research institutes – Gray Institute, Oxford; Cancer Research UK Cambridge Institute; London Research Institute; Paterson Institute, Manchester; and the Beatson Institute, Glasgow. This hub will provide the foundations for CRT's and Teva's work towards developing novel therapies based on DDR-related targets for the treatment of cancer.

DDR plays a key role in protecting cancer cells from the damaging effect of chemotherapy – creating an in-built antidote to the toxic effects of the anti-tumor drug. AstraZeneca underscored the area’s importance to its oncology strategy by in-licensing Merck’s MK-1775 for study in certain types of ovarian cancer earlier this month.--Sten Stovall

Cleveland Clinic Innovations/Shield Biotechnology: Cleveland Clinic Innovations, the corporate venture arm of Cleveland Clinic, has spun off a company based on research from the Lerner Research Institute, Cleveland Clinic’s translational and clinical research center. The company, Shield Biotech, will complete preclinical development of a preventive breast cancer vaccine. It expects to file an IND and commence two proof-of-concept Phase I trials in women with triple-negative breast cancer within two years. The amount of investment capital raised from external sources was not disclosed. The trial will report out in approximately three years from initiation.

Triple-negative breast cancer has a high rate of recurrence and does not respond to current forms of adjuvant therapy. The research will be led by Shield’s CSO Vincent Tuohy, an immunologist at the Clinic’s LRI. “We have proposed that breast cancer may be effectively controlled by providing healthy cancer-free women with pre-emptive immunity against emerging breast tumors” said Tuohy. “We propose to provide women with an immune defense or shield.”  CCI has played an important role in the biomedical innovation landscape, particularly with the reduced involvement of venture capital in early stage funding and company creation.

CCI functions like a super-charged university tech transfer office, identifying promising research at its parent, licensing technology, launching companies, finding investors, and even helping with certain aspects of commercialization ([A#2012800153]). Since its founding in 2000, it has launched 63 companies that have received nearly $700 million in investment. Therapeutic or prophylactic medicines are the smallest category of inventions at CCI, and as such a rarity among its spin-off companies. Medical devices are by far the largest category.--Michael Goodman

ChemoCentryx/GlaxoSmithKline: In our “No-Deal” of the week, GSK, following the late August announcement that vercirnon missed the primary endpoint and a key secondary endpoint in the Phase III SHIELD-1 study, has returned the compound along with all data, back-up compounds and related intellectual property to ChemoCentryx. The Mountain View, Calif., biotech announced Sept. 18 that it will conduct a review of the unfinished trial data to determine if there is a different path forward for the CCR9 chemokine receptor inhibitor.

While the multinational pharma is ending development of the compound also known as Traficet-EN or CCX282, the disappointing outcome will not scuttle a larger collaboration between the two firms that dates back to 2006. GSK continues to develop a CCR1 inhibitor, CCX354, in rheumatoid arthritis that it licensed in 2011 under an option agreement, and is expected to make a decision about whether or not to exercise its option for CCX168, an inhibitor of complement receptor C5a now in Phase II for renal vasculitis.

On Aug. 23, GSK revealed that it had ceased dosing in the 2,500-patient four-trial SHIELD program testing vercirnon after one of the trials, SHIELD-1, failed to meet the primary clinical endpoint of induction of response in Crohn’s disease, as well as a key secondary endpoint of maintaining clinical remission ([A#14130823003]). ChemoCentryx hopes it can determine a clinical path forward for the candidate by evaluating design differences between its successful Phase II trial and the failed GSK study. --Joseph Haas

Thursday, September 19, 2013

Financings of the Fortnight Explores the Alternatives

With all the noise this year about IPOs in our little corner of the world, it’s been easy to forget that most biotechs out there are scrambling for any source of cash they can lay hands on. Assurances aside that traditional biotech VC is making relative bank, the overall pool of traditional venture capital available to invest will continue to dwindle, as respondents in START-UP’s 3rd annual life science VC survey were quite adamant about.

(The survey is now available, by the way.)

This week we got a taste of the post-VC world; or at least, a reminder of the various types of alternative funding out there for health care and biotech that, in a few years, could replace a significant chunk of traditional venture and interrupt for good the boom-and-bust cycle.

First, the elephant in the room: Google announced it would fund a new health care company, Calico, dedicated to anti-aging. The search-and-so-much-more giant is clearly obsessed with health, and doing something about the drastic – dare we say “tragic” – flaws in the care system. Our correspondent Paul Bonanos did a great job delving into Google Ventures’ health care investment strategy in this feature earlier this year, and we recommend reading it (non-subscribers can sign up for a free trial) as background to what might be going on with Calico.

Paul also reminds us that the Googlers aren’t the only tech-heads with health-care ambitions: Peter Thiel, Yuri Milner and others are shifting their fortunes in small measures. And bully for them; we could certainly use fresh minds and tech-savvy strategies (Tech Tonics?), what with the data-intensive nature of health care these days.

But Silicon Valley’s libertarian streak is often at odds philosophically with another important source of biotech funding that we were reminded of this week. The National Institutes of Health announced the recipients of $45 million from the funds dedicated in 2012 to Alzheimer’s research. Those funds aren’t going directly to biotech companies, but the trials and other efforts they’re backing are much needed in an area that seems practically abandoned by industry – at least in proportion to the level of the dire medical need Alzheimer’s represents. So, indirectly, one can only hope the NIH funding can move the needle enough for biopharma, big and small, to see clearer pathways that deserve cash outlays from the private sector, as well.

Finally, we’re about to see a small but significant step toward equity crowdfunding. Title II of the JOBS Act, which loosens the rules for general solicitation of accredited investors, takes effect next week. It’s not quite crowdfunding nirvana – or the apocalypse, depending on your viewpoint – because we’re still a ways away from Mom and Pop, Joe Sixpack, and the Joneses being able to participate.  (That’s Title III.) But all manner of folks are lined up, ready to provide investment platforms for those with an eye on biotech, as our colleagues have written about here.

If you happen to be at PSA: The Pharmaceutical Strategy Conference in New York next week, you can ask Greg Simon, who’s running the equity crowdfunding site Polliwogg, all about the latest developments. (Or you can catch him on the panel “Funding Biotech: New Ways To Create Value.”)

Or, if you hate going anywhere near New York because you’re convinced it’s about to be overrun by giant drooling sea-dragon spiders, well, the people we write about have products that can help you. Until then, relax in the safety of your home or office, avoid the crowds (and their funds), and enjoy the latest edition of….

Civitas Therapeutics: From the ashes of the inhaled insulin efforts of the previous decade comes Civitas, which said September 11 it has raised a $38 million Series B financing to fund late-stage development of the company’s lead program, CVT-301, an inhaled formulation of levodopa (L-dopa) to treat debilitating motor fluctuations – known as “off episodes” -- associated with Parkinson’s disease. Civitas spun out of Alkermes' pulmonary business in 2010, then the latest casualty in Big Pharma’s complete retreat from several efforts to create inhaled insulin products. But Longitude Capital and Canaan Partners raised $20 million for a Series A, and in early 2011 new CEO Glenn Batchelder told FOTF he hoped to bring a Parkinson’s-related treatment to clinical proof of concept by the end of 2012. (Why an inhaled L-dopa for Parkinson’s? During acute “off periods,” characterized by halting or frozen movement, the Civitas technology aims to deliver drug even when it might be difficult for patients to draw a sustained breath.) CVT-301 is being positioned as an adjunct therapy to oral L-dopa. Bay City Capital led the round and was joined by crossover hedge fund RA Capital, an undisclosed blue chip public investment firm, and all returning shareholders including Alkermes, Canaan Partners, Fountain Healthcare Partners, and Longitude Capital. Partners from Bay City and RA Capital joined the company’s board. Civitas will also explore pipeline expansion with its ARCUS delivery platform for other diseases where what the company defines as a “large, precise” dose delivered from an inhalation device “would provide a significant clinical advantage.” – A.L.

DRI Capital: The Toronto health care royalty investor said September 9 it has raised a new $1.45 billion fund, its third following $240 million and $926 million vehicles, raised in 2006 and 2010 respectively. Investments under the first two funds followed a fairly straightforward set of criteria: drugs with FDA or EMA approval that offer strong efficacy and an attractive pharmacoeconomic profile and that are used to treat very serious, chronic conditions, DRI President and CEO Behzad Khosrowshahi told our “Pink Sheet” colleagues. For the third fund, however, DRI also plans to consider investments in Phase III assets and the higher returns that might come from higher-risk investments. It’s part of a larger but still subtle trend of royalty firms dipping toes into pre-commercial assets, even as traditional venture firms cross the other way and dabble in royalty investments. Khosrowshahi said that DRI has “a decent level of internal expertise” to evaluate pre-commercial risks. The drug royalty business has certainly attracted the capital to lure health care specialists, with DRI joined by competitors such as Capital Royalty L.P., Orbimed Advisors LLC and Healthcare Royalty Partners. Earlier this year, Capital Royalty raised more than $1 billion for its second fund, announcing a revised strategy under which it would emphasize debt instrument financing that would offer its deal partners a more concrete sense of the cost of capital. -- Joseph Haas

Five Prime Therapeutics: The protein therapeutic company notched on September 18 the first biotech IPO of the fall season. More than a dozen are waiting in registration, and an unknown number are also still under wraps with confidential filings. Five Prime raised $62 million by selling 4.8 million shares at $13 each, right within its projected range of $12 to $14 a share. Insiders bought about 408,000 shares. Five Prime was founded in 2001 and built at a time when VCs were more willing to wait for long-term payoffs for platforms. Five Prime’s platform consists in part of a library of 5,600 extracellular proteins to yield novel targets, and biotech or pharma partners have signed on with more than $220 million in partnership or licensing money. Its most advanced candidate FP-1039 is a selective FGF inhibitor that Five Prime and its partner GlaxoSmithKline put into a Phase Ib trial in July.  “If you were to tell a VC, ‘Give me four or five years and a chunk of money to develop this kind of platform,’ it might be a tough sell these days,” Five Prime VP of Biology Brian Wong told our sister publication START-UP earlier this year. Befitting a company that’s taken 12 years to reach the public markets, the pre-IPO ownership was spread rather widely. Only Pfizer had more than a 10% stake, with 13.7%. Venture or priate equity groups Advanced Technology Ventures, Domain Associates, Kleiner Perkins Caufield & Byers, HealthCap, Versant Ventures – from the firm’s very first fund -- and Texas Pacific Group all owned 9%. Founder and CEO Rusty Williams owned 6.8%. Jefferies led the underwriting team, which has the option to sell an additional 720,000 shares. – Alex Lash

Cubist Pharmaceuticals: The antibiotic maker said September 16 it bought $25 million in Series A preferred stock from Optimer Pharmaceuticals, a sale that was negotiated this summer as part of Cubist’s agreement to buy Optimer. That acquisition, not yet consummated, hasn’t gone over well with Optimer shareholders, who have filed suit to stop it because Optimer shares have actually been climbing since the company dumped its CEO and put itself up for sale in February. The $10.75-per-share offer, or $535 million, was at a 19% discount to Optimer’s July 30 closing price. Shareholders could earn more post-acquisition if Cubist hits sales milestones with Optimer’s Clostridium difficile treatment Dificid (fidaxomicin), a product it has been selling in the U.S. since 2011, when it signed an exclusive co-promotion deal with Optimer. The $25 million stock sale is essentially a bridge to help Optimer pay the bills – or as a Cubist spokeswoman told FOTF, “to address Optimer’s near-term cash needs” -- until the merger takes effect. The purchase repeats quarterly, so if the deal hasn’t closed in three months, Cubist will pay another $25 million, and another $25 million three months after that. As of June 30, Optimer had $73 million in cash on hand, down from $119 million at the end of 2012. Seeing how the deal was unusual for its discounted price, there certainly is a chance that the lawsuit will have legs and hold matters up for some time. The Cubist spokeswoman declined to comment on the suit. – A.L. and Jessica Merrill 

All The Rest: myoscience, developing Focused Cold Therapy devices for peripheral nerve conditions, closed on a $25M Series E round…Index Ventures is initially investing $10M into Egalet to support work on abuse-deterring pain meds, with the option for another $10M…Emmaus Life Sciences raised $7.5M to complete Phase III studies for its sickle cell candidate…to pay for its acquisition of CNS assets from Merck, Cerecor got $6.8M in Series A-1 financing…Taglich Brothers led a $3.2M round for screening and assay development services company Caldera Pharmaceuticals…Sanofi was an investor on Hadasit Bio-Holdings-portfolio company KAHR Medical’s $2.5M fundraise…BioMotiv and the NYU Innovation Fund launched autoimmune start-up Orca PharmaceuticalsKV Pharmaceutical emerged from Chapter 11 bankruptcy, simultaneously closing on a $100M credit facility and $275M rights offering…Cell Therapeutics sold $15M in 15k Series 18 convertible preferred shares…Taiwanese biotech Amaran provided half of the $10M private investment in Stellar Biotechnologies…A $10M PIPE by NanoViricides gives the company a total of $22M in cash for the next two years to fund its FluCide and DengueCide candidates…A day after revealing positive outcomes in its Phase II glioblastoma multiforme vaccine study, Agenus raised $6.5M in an at-the-market registered direct offering…injectables developer Sagent Pharmaceuticals closed on a $75M FOPO…to continue work on ZFP Therapeutic candidates, Sangamo BioSciences completed a $64.5M secondary offeringGalena Biopharma’s $35M FOPO will help to commercialize its first product, Abstral…electroporation drug delivery company OncoSec publicly raised $12M…protein therapeutics company Acceleron priced its IPO at the top end of its range to gross $83.7M...glaucoma drug developer Aerie Pharmaceuticals filed for its IPO, while Bind Therapeutics, Ophthotech, and Enzymotec set terms for their offerings…Cubist offered $800M in two series of convertible senior unsecured notes…therapeutic protein maker Protalix BioTherapeutics closed on $69M in 4.5% convertible notes due in 2018…ProMetic Life Sciences$Cdn10M debt financing will help put its plasma purification facility into operations for manufacturing plasma-derived orphan drugs…Benu BioPharma established Benu BioVentures for investments in preclinical to proof-of-concept candidates…and Daiichi Sankyo teamed up with Mitsubishi UFJ Capital to launch a new fund for start-up creation; Daiichi gets rights to buy the companies and IP. -- Amanda Micklus 

Image courtesy of flickr use Kitschweb through a Creative Commons license. 

Tuesday, September 17, 2013

Invitation: Join PharmAsia News' Twitter Chat On China Pharma Issues

Over the last month China pharma issues have been on the front page as the government has launched a wide-ranging probe focused on compliance. The probe comes at a time when many players are already re-assessing business models in China to find new avenues for growth.

Opportunities still abound in China given huge unmet medical needs, demographic changes (e.g., an aging population, adoption of Western lifestyles), and China's health care reforms, which have extended basic medical insurance to virtually all of the country’s 1.3 billion citizens.

But challenges abound too. Sustaining growth will require new models and flexibility: smaller cities are now growing faster than Tier I cities; off-patent medications are under more severe pricing pressure, threatening the traditional business model of multinationals; and compliance has taken center stage.

While support for biopharma innovation is a major government goal, so is curbing health care costs. How can pharma companies collaborate and thrive in this environment?

To take a closer look, PharmAsia News' Twitter site, @PharmAsiaNews, will host a half-hour Twitter chat (hash tag #PAS13) Sept. 19 (3-3:30 pm EST) to discuss hot topics related to the China pharmaceutical industry. The chat will include special industry guests and PharmAsia News editors, and is sponsored by the PharmAsia Summit.

We invite you to join the discussion, ask a question, or just tune in and watch the chat live. It’s a great way to learn the latest on China pharma without leaving your laptop, tablet or smart phone.

For more information, please see below, or contact our editor Joshua Berlin via email or Twitter . We hope to see you there!

• Who: The chat is hosted by @PharmAsiaNews and includes China industry consultants @GeorgeBaeder and @DebraYuPharma , and PharmAsia News editors @TamraPharmAsia and @BioPharmaJosh.

• What: A half-hour Twitter chat to discuss the latest hot topics in the China pharma industry.

• When: Thursday, Sept. 19, 3-3:30 pm EST (for those who can’t attend the chat live, we will provide a link to the discussion at a later date). Go to @PharmAsiaNews at 3 pm to tune in or participate.

• Where: The chat is hosted on the Twitter page of @PharmAsiaNews. To follow the chat, join the discussion or ask a question, go to @PharmAsiaNews or follow hashtag #PAS13.

• Why: China represents the fastest-growing large pharma market, but new models are needed to succeed in a rapidly changing environment. Our Twitter chat is a great way to tune in for a half hour and learn the latest on China pharma.

• How: To join the discussion or ask a question, use hash tag #PAS13 and reference @PharmAsiaNews. Or reply to our ongoing discussion on @PharmAsiaNews using hash tag #PAS13.

Monday, September 16, 2013

Early-Stage Funding: Replacing Dwindling VC and Alliance Dollars?

We live in strange times. Venture capitalists, the traditional support for research-stage biopharmas, have been pulling back from early stage investments. Some are moving downstream, some are choosing not to raise new funds, others are exiting life science investment altogether. A few stalwarts – firms like Third Rock, Flagship and Atlas – have stayed the course, continuing to invest in unprecedented, high-science ideas. Although they’ve shown themselves able to re-up their funds, in some cases out-raising their last funds by good measure, it’s too early to say that their portfolio bets will pay off.

Pharma has been stepping into the breach, acting as LP or co-investor with venture. But it’s not enough to reverse the fall in Series A rounds.

What’s odd is that, despite the decline in VC investment, we’re seeing a steady trickle of truly novel products come to market. Immunotherapy, epigenetics, gene therapy, optimized antibodies aimed at exciting new targets – they’re all working their way through the pipeline. But venture’s declining interest (overall) in early stage start-ups has been going on for over five years now. Shouldn’t we be seeing some signals of scarcity or a fall-off in quality?

So we speculated that maybe that other fount of early stage support, big pharma alliances, is compensating for the drop in venture dollars. Maybe big pharma through its business development activities is correcting for the absence of venture with non-dilutive support for fledgling companies.

But early stage alliance funding, as measured by disclosed upfront payments, has also been trending down. The chart above measures upfront dollars from big pharma/biotech collaborations and licensings.  At its current run rate – as best this can be predicted – the alliance line will finish 2013 at around $940 million, sharply reversing its five-year downward trend.

As to the apparent paradox of a healthy, productive pipeline in the absence of the high investment levels seen in prior years, it appears that the most interesting ideas continue to be funded. As Bruce Booth of Atlas Ventures wrote in his blog two years ago “. . . less capital chasing fewer companies with more disciplined investors offers a mix that bodes well for returns from early stage investing.”

Solid returns is good news for investors, for sure. But is that what pharma, whose own internal labs are sputtering, needs from these engagements? And what about the potential for new players, like crowdfunders, to disrupt the life science investment supply chain? In the next few years, we may be looking at a markedly different environment for financing early stage ideas.

We intend to probe these and other matters at Elsevier’s 2013 PSA: The Pharmaceutical Strategy Conference in the panel “Funding Biotech: New Ways to Create Value.”  We’ll be joined by Gregory Simon, CEO of Poliwogg; Martin Shkreli, CEO of Retrophin; Noubar Afeyan, CEO of Flagship Ventures; Mark Clein, President and Founder of Precision for Medicine; and Damien McDevitt, VP and Head of Business Development for R & D Therapy Areas at GlaxoSmithKline.

We hope you’ll join us.

Agios CEO David Schenkein Makes The Case For Early Stage IPOs

If the rest of the year is like spring and summer, we are in for one of the busiest years ever for biotech IPOs.

With four more slated to price this week, we 're wondering if the new hopefuls can gain as much traction as others in this year's class. For example, cell metabolism specialist Agios Pharmaceuticals enjoyed a 74% bump on its debut day in July, the biggest first-day biotech pop since the turn-of-millennium bubble. Its shares are still up 50% since the IPO, and it boasts a valuation of more than $800 million. All without a single clinical candidate. Why?
In his first post-IPO interview, CEO David Schenkein said Agios convinced investors that, once in the clinic with its cancer and rare disease drugs, it could quickly reach proof-of-concept and get to market in as little as four years. Agios pitched its capability to identify the right patient groups for early clinical trials.

“We would not move a targeted agent into the clinic unless we had the ability to identify the right patient population,” said Schenkein. “In Phase I, we are only enrolling patients with the molecular marker. We are not enrolling any patients that don’t have it. Not only will we find out about safety and pharmacokinetics, but we’ll also get a very clear sense of if this drug is likely to work in a patient population.”

It's not a unique pitch. Many biotechs are looking to patient stratification to reduce clinical costs and risk. But investors are obviously willing to bet large on Agios' ability to make good on it, perhaps even start with a Phase I/II trial that establishes safety, dosage and efficacy all at once, which Schenkein said Agios is planning. 

For its IPO strategy, Schenkein said the company had been meeting with Wall Street investors for years. Going public was always the plan. In November 2011, the company closed a $78 million mezzanine round led by Fidelity and two other, undisclosed crossover investors. That was a big turning point.

“When we made that decision to do a crossover round, part of that was we weren’t going to take any more venture money. We got a very significant step-up at that round. It valued the company at that time, after the money was in at about $350 million,” said Schenkein. “It’s fair to say that’s a higher number than venture investors could have offered. That helped set the range of what we were looking for going public.”

(For an in-depth look at the changes in biotech brought on by crossover investments, see this START-UP feature.)

Agios initiated the IPO process this year with a confidential SEC filing on May 23, taking advantage of one of the more widely used provisions of the Jumpstart Our Business Startups (JOBS) Act that President Obama signed into law in April 2012.

About three-quarters of this year's biotechs to go public have filed confidentially first, but Agios has been by far the fastest through the process. It filed its S-1, making its intentions public, on June 10. It then debuted shares on July 24, a 62-day turnaround from its first confidential filing. Schenkein said Agios went faster than normal in order to get out before the typical August lull on Wall Street.

We'll have a lot more on the Agios IPO and others in an upcoming feature in START-UP, plus more here and in our sister publications on the confidential IPO process.

Schenkein will also be a featured speaker at our PSA: The Pharmaceutical Strategy Conference this year (September 23-25 in NYC; Click here for agenda). His talk, as part of our Leadership in Transition series, will focus on piloting the young company through the private-to-public transition. We hope to see some of you there.

Wall St. bull photo by flickr user Christopher Chan // creative commons license

Friday, September 13, 2013

Deals of the Week: Prime Time For Parkinson's

Parkinson’s disease is about to receive plenty of media attention. Most of that will come as NBC’s The Michael J. Fox Show makes its debut Sept. 26, returning its star to center stage in a sitcom that deals with neurodegenerative disease. But here at Deals of the Week, we’re pointing our camera at a small but potentially influential Big Pharma bet on a company whose early progress in Parkinson’s is funded by the foundation that bears Fox’s name.

Biogen Idec and Amicus Therapeutics revealed a tie-up this week that will fund continued research on the link between the glucocerebrosidase, or GCase, enzyme and Parkinson’s. Known primarily for its research in rare lysosomal disorders such as Fabry disease and Pompe disease, Amicus specializes in repairing lysosomal enzyme function related to protein instability and misfolding. There’s a connection between those disorders and Parkinson’s: Scientists have known since the late 1990s about a connection between Gaucher disease, another lysosomal storage disorder, and Parkinson’s; mutations in the GBA1 gene cause Gaucher, and are a known risk factor for Parkinson’s. And indeed, Amicus’s continued research on a first-generation Gaucher product showed early promise in treating Parkinson’s as well.

The Michael J. Fox Foundation, one of the best-known Parkinson’s charities, has funded preclinical research on Amicus’s AT3375 since 2006. Beginning with a predecessor compound, AT2101, Cranbury, N.J.-based Amicus learned that pharmacological chaperones could be used to stimulate GCase activity, prevent buildup of alpha-synuclein – a protein associated with Parkinson’s – in mice’s brains, and improve motor function. That led to the development of AT3375, a more potent and selective next-generation product, and a series of MJFF grants.

The Biogen Idec deal includes discovery, development and commercialization of new molecules that address GCase activity. The companies didn’t disclose specific terms, but said Biogen Idec will own the candidates, fund the projects, and reimburse Amicus for its employees’ time, while Amicus can receive milestone payments and “modest” royalties if a product succeeds in the clinic and is commercialized.

It’s the latest among several Parkinson’s deals for Biogen Idec, including its 2010 purchase of an alpha-synuclein-targeting compound from Neurimmune Holdings. The pharma has also invested in neurodegeneration start-up Knopp Biosciences, most recently in November 2012.

Overall, the Parkinson’s field is still dominated by generic drugs. In light of some recent discoveries, it's possible that both symptomatic and disease-modifying treatments could reach the market within several years, though none will imminently. The clinical failure of Merck’s Phase III candidate preladenant in May raised some doubts about one class, adenosine A2A agonists.

But if the Biogen/Amicus deal is a modest step forward, it’s still another sign that a pharma will commit capital to an early-stage Parkinson’s project with a lot yet to prove. Other recent alliances include a couple of university deals. AstraZeneca partnered with Tufts University in a broader neuroscience pact in July. And last year, Bristol-Myers Squibb licensed a group of metabotropic glutamate receptor 4 modulators from Vanderbilt Center for Neuroscience Drug Discovery. Plus, watch for coverage of Civitas Therapeutics’s latest venture funding, another bet on Parkinson’s disease that’s likely to be featured in Deals of the Week’s cousin, Financings of the Fortnight, next week. --Paul Bonanos

Which other deals are ready for prime time? We'll do our best Don Pardo voice to introduce...

Biogen Idec/Isis: Biogen has been an active dealmaker lately, and struck another partnership with a familiar ally. In a move that capitalizes on the already-existing relationship, Biogen teamed with Isis Pharmaceuticals for a fourth partnership – one that broadens their discovery work in antisense technology and raises the stakes financially. The two companies announced what Isis refers to as ‘Biogen 4’ on Sept. 9. The broad, six-year strategic research collaboration will use Isis’s antisense technology to discover and advance compounds that treat neurological conditions. Biogen will pay $100 million upfront – the payment will be reflected in its third quarter R&D expenses – and Isis is eligible to receive as much $220 million in milestone payments, as well as royalties and clinical trial expenses. Once targets are validated the team can choose to utilize Isis’ antisense technology or opt to develop a small molecule or biologic. Should antisense be chosen, Isis will receive an additional $10 million milestone payment and have the opportunity to earn an additional $250 million in pre-commercial milestone payments. If not, Isis still will receive a $5 million milestone and have the potential for another $85 million in milestones. The strategic relationship builds on three earlier collaborations inked in the last two years, including one around a Phase II program to develop a treatment for spinal muscular atrophy. –Lisa LaMotta 

Merck/AstraZeneca: AstraZeneca’s in-licensing of Merck's MK-1775 for study in certain types of ovarian cancer is the UK drug maker’s latest move to build a dynamic oncology portfolio and highlights its keen focus on the DNA damage response area and efforts to induce cancer cell death. Under the Sept. 11 deal, Merck will receive $50 million upfront, and will be eligible for undisclosed development and regulatory milestone payments, as well as tiered royalties. MK-1775 is currently in Phase IIa clinical studies in combination with standard of care therapies for treating patients with P53-deficient ovarian cancer. WEE1 helps to regulate the cell-division cycle and WEE1 inhibitor MK-1775 is designed to cause certain tumor cells to divide without undergoing the normal DNA repair processes, ultimately leading to cell death. For AstraZeneca, the addition of WEE1 inhibitor MK-1775 gives it yet another agent that targets tumor-specific DNA damage response dependencies, such PARP inhibitor olaparib and first-in-class AZD6738. Preclinical evidence suggests that MK-1775 can enhance anti-tumor properties in conjunction with DNA damage-inducing chemotherapy agents.  AstraZeneca intends to study the compound in a range of solid tumor cancer types as part of a concerted push in oncology, part of a larger turn-around plan. Merck will continue to focus on its later stage oncology candidates, MK-3475 and vintafolide. In the spring, FDA granted breakthrough status to MK-3475, or lambrolizumab, a PD-1 specific monoclonal antibody for the treatment of advanced malignancy. Vintafolide is a treatment for a variety of tumor types expressing folate receptors, including ovarian and lung cancers, which Merck licensed from Endocyte Inc. in April 2012. It is paired with a radio-labeled imagingn agent to identify high-responding patients whose tumors express folate receptors. – Sten Stovall

Roche/Inovio: Roche announced a deal Sept. 10 to license two preclinical assets, one of which will be used as a potential combination with other cancer immunotherapy candidates in the Swiss pharma’s pipeline. Its partner, Inovio Pharmaceuticals gets $10 million upfront in exchange for rights to INO-5150 for prostate cancer and INO-1800 for hepatitis B, as well rights to use an electroporation delivery technology for the two candidates. Both candidates are multi-antigen DNA immunotherapies well into preclinical work. Inovio CEO Joseph Kim said ‘5150, which targets both prostate-specific antigen and prostate-specific membrane antigen, could move into clinical development before the end of the year. In a release, Roche said it plans to use ‘5150 in combination with cancer immunotherapies in its pipeline in hopes of developing next-generation approaches to treating a variety of cancers. Roche also gets an option to license additional back-up vaccine candidates that Inovio will discover and develop, as well as an exclusive license for use of the biotech’s Cellectra electroporation technology in the development of ‘5150 and ‘1800. In addition to the upfront payment, Roche also will finance the remaining preclinical work for the two candidates. Inovio could earn development and commercial milestones up to $412.5 million for the two programs and up to double-digit tiered royalties on product sales. Joseph Haas

Cellceutix/PolyMedix: One company’s loss may be another’s gain. In this case, Cellceutix is taking advantage of PolyMedix’s bankruptcy to acquire the company’s assets at an affordable price and strengthen its own portfolio. Cellceutix said Sept. 9 it will acquire the Phase II antibiotic brilacidin and eight other compounds previously in development at PolyMedix for $2.1 million in cash and 1.4 million shares of Cellceutix stock, in a deal orchestrated in bankruptcy court. Financially distressed PolyMedix filed for Chapter 7 bankruptcy protection April 1, after it ran into trouble in May 2012 while testing a different product, PMX-60056, in development for reversing the anticoagulant activity of unfractionated heparin in patients undergoing percutaneous coronary intervention procedures. Brilacidin will be Cellceutix’s latest-stage compound in clinical development, and the company said it is anxious to begin Phase III trials testing the first-in-class defensin mimetic. The question now for Cellceutix is if it will be able to succeed where PolyMedix failed and turn brilacidin and other molecules in the portfolio into valuable late-stage drugs. - Jessica Merrill

GSK/Suntory: By arranging the sale of its iconic drink brands Lucozade and Ribena to Suntory Beverage & Food of Japan for net proceeds of £1.3 billion ($2.11 billion), GlaxoSmithKline has disposed of two valuable non-core assets, freeing itself to focus on its late-stage drug and vaccine pipeline. The Sept. 9 divestment had been expected after GSK in April said it had put Lucozade and Ribena on the auction block. Introduced in 1927 and 1937 respectively, the two drinks deliver strong cash flow and together generate annual sales of around £600 million ($915 million). Both drinks are well-loved in Glaxo’s home country, but lack global reach, especially in the emerging markets that are now becoming the focus of the British drugmaker's consumer health business. Proceeds from the sale will be used to reduce GSK’s debt. SBF, the number 4 supplier of soft drinks globally in 2012, will get global rights to the two brands and GSK’s Coleford, UK, manufacturing site in the Forest of Dean. Most employees at the site and those working on Lucozade and Ribena in commercial and R&D functions will transfer to SBF. In Nigeria, GSK will continue to manufacture and distribute Lucozade and Ribena under license. The deal is part of a number of housekeeping moves set in motion early in 2013 by GSK’s chief executive Andrew Witty. They include hiving off some 50 medicines, including stomach acid treatment Zantac (ranitidine), migraine medication Imitrex (sumatriptan) and anti-nausea treatment Zofran (ondansetron), into a separate global established products portfolio. - S.S.

Bayer/Broad Institute: MIT and Harvard-backed cancer research center The Eli & Edythe L. Broad Institute turns 10 this year, and is solidifying its status as a key partner for pharmas. Its latest ally is Bayer: the German giant inked a five-year oncogenomics deal under which the pair will attempt to discover new drugs that target genomic alterations selectively. The two didn’t release financial terms of the Sept. 10 deal, but the early-stage collaboration gives Bayer an exclusive option to license the compounds discovered jointly, at the pre-clinical stage. Bayer and the Broad Institute will share their compound libraries, screening platforms, and expertise, and establish a joint steering committee to decide which candidates to pursue. Established in 2003 with a $200 million gift, the Broad Institute was enlarged in 2008 when its namesake benefactors donated another $400 million. The Cambridge, Mass.-based Institute struck a two-year antibiotics research deal with AstraZeneca in September 2012, and a multi-year agreement with Roche to explore repurposed drugs in December 2012. It also granted NanoString Technologies Inc. rights to a genetic signature implicated in liver disorders, invented by Broad Institute CSO Todd Golub, in April. – P.B.