Friday, January 31, 2014

Deals Of The Week Looks at The Intersection Of Patient Empowerment, Generic Drugs, And Macaroni & Cheese

It’s a challenge to pick up an annual report or listen to a CEO present at a conference these days without reading or hearing something about “patients being at the center of everything we do.” But patient empowerment is a slippery concept. It means different things to different stakeholders.

To health insurers and policy mavens, it’s about providing consumers with information about health care delivery and payment options. To disease advocates, it’s about sparing no effort to make clinically meaningful, affordable therapies available to patients. To some investors, it’s about giving consumers a stake in the funding of medicines.

To drug companies, patient empowerment is all too often about educating consumers – via print and broadcast, online media and through the physicians they detail – about their proprietary drug and shielding them from information about competing drugs.

To explore the issue, “The Pink Sheet” recently talked with Harvard Medical School Professor Eric Campbell, a sociologist who heads the Mongan Institute for Health Policy at Massachusetts General Hospital. Among his research projects, Campbell and institute colleagues published an article in the Feb. 11, 2013 issue of JAMA Internal Medicine reporting on a survey that sheds an interesting light on patient empowerment.

The basic takeaway was that 37% of physicians surveyed (n=1,891) sometimes or often prescribed a brand-name drug at a patient’s request when a generic is available. Campbell commented, “[That] is a wasteful medical practice, and part of the reason that health care is so expensive.”

The survey turned up some interesting determinants of the surprisingly high cave-in rate. Forty-three percent of physicians in practice for more than 30 years acquiesced to patient demands for the brand drug, compared to 31% of physicians in practice 10 years or fewer. Fifty percent of internal medicine docs caved compared to specialties like pediatrics (17%), anesthesiology (20%), and general surgery (26%). And physicians in solo or two-person practices were significantly more disposed to cave to patient demands than those working in a hospital (46% versus 35%).

Not surprisingly, physician-industry relationships were positively associated with accommodating patient requests for brand-name drugs. In particular, physicians who received industry-provided food and/or beverages in their workplace or who got free drug samples were more likely to accede to patient demands. But the biggest predictor of the propensity to cave in was the frequency with which docs met with drug reps to stay up to date.

The survey leaves unanswered other questions, both about the physician-patient relationship and about how patients and physicians, as distinct groups, view generics versus branded drugs. For instance, wouldn’t drug companies and health care policy makers like to know whether patients, emboldened by information gleaned from social media and the Web, are requesting FDA-approved drugs with alternative mechanisms in place of the physician’s recommendation?

And wouldn’t all health care system stakeholders appreciate some hard data on patient views about generics? Do a majority see them as inferior to the brand? As less safe? Less prestigious? How well informed are patients about the concept of bioequivalence or about the clinical dossier required for approval of a generic drug? And the same goes for physicians – what are their views about generics?

Docs working in large, increasingly corporatized settings like hospitals or large physician groups seem to toe the line more when it comes to prescribing generics. As accountable care organizations gather steam, physicians will be economically incentivized to prescribe generics.

And other trends are at work that will nudge over-obliging physicians toward generics and away from brands. Formulary exclusion programs, such as have been instituted at pharmacy benefit managers like CVS Caremark Corp. and Express Scripts Inc., are targeting branded drugs in categories where there are generic alternatives. Caremark’s program, in its second year, has designated 70 drugs in its 2014 formulary as “not covered.” Express Scripts’ exclusion list, which began on Jan. 1 of this year, targets 48 drugs, including mega-brands like GlaxoSmithKline PLC’s Advair Diskus (fluticasone/salmeterol) and excludes more specialty products than Caremark.

The Sunshine Act, which went into effect in August 2013, prohibits drug industry value transfers to physicians. While it’s too early to say whether it’s casting an overall chill on industry interactions with physicians, some regional health systems like ThedaCare in Wisconsin are using the new law to ban drug rep visits and product samples even though neither are proscribed under the law. The trend over the past decade has been for larger academic centers to prohibit reps from leaving samples or, in some cases, from in-clinic visits altogether.

Meanwhile, the influx of generics in the wake of major brands going off-patent helped tamp down drug expenditures in 2012 from all sources of drug spending – public plans, private plans and out-of-pocket payments. The implementation of four-tier formularies, for instance among employer-sponsored plans, has helped constrain patient and physician use of brand-name drugs.

Campbell offered an insight into the poorly understood world of patient psychology as it pertains to evaluating and selecting a therapeutic option:

“I think people see generics and think of it like macaroni and cheese. If you buy generic macaroni and cheese at the grocery store, you know in advance that it won’t taste as good as the brand-name Kraft Macaroni & Cheese. You can see why some people might be reluctant to use generic drugs.” But then he hastens to point out a crucial difference: “In the drug world, they’ve actually proven that the generic macaroni and cheese is completely identical to the Kraft Macaroni & Cheese.” -- Mike Goodman

Meanwhile, here's a sampling of this week's choicest transactions, served piping hot:

Biogen Idec/UCB

Biogen Idec Inc. will be taking its multiple sclerosis portfolio into several Asian markets, along with its candidates for hemophilia A and B, under a commercialization pact signed with Belgium’s UCB SA on Jan. 30. Financial terms of the deal were not disclosed.

Under the agreement, UCB obtains the rights to commercialize six MS drugs in South Korea, Hong Kong, Malaysia, Thailand, Singapore and Taiwan, as well as Eloctate and Alprolix, Biogen’s investigational long-acting recombinant therapies for hemophilia A and B. In MS, the deal confers rights to fast-growing Tecfidera (dimethyl fumarate), blockbuster biologic therapies Avonex (interferon beta-1a) and Tysabri (natalizumab), Ampyra (dalfampridine), Plegridy (pegylated interferon-1a) and daclizumab. UCB also gets development and commercialization rights to all eight drugs in China.

During its year-end investor call Jan. 29, Biogen reported that Tecfidera had produced sales of $876 million worldwide in 2013; all but $12 million of that was realized in the U.S. The Weston, Mass.-based biotech expects Plegridy to obtain marketing approval this year in the U.S. and Europe, and Eloctate and Alprolix to obtain approval in the U.S., although it does not project meaningful revenues this year from the hemophilia drugs. --Joe Haas

Baxter/Xenetic Biosciences

Baxter International Inc. and the U.K.’s Xenetic Biosciences Inc. announced they were restructuring their 2005 collaboration to co-develop hemophilia drugs that could be administered less frequently than current therapies, perhaps once weekly. The expanded deal, announced Jan. 30, includes a $10 million equity investment by Baxter in its partner and also amends the terms of a licensing agreement, increasing the potential milestones payable to Xenetic to $100 million. The amended deal would increase sales royalties on any products reaching market, as well.

Xenetic CEO Scott Maguire said the company plans to use the money to advance its own pipeline assets, which include ErepoXen, a polysialylated formulation of erythropoietin for the treatment of anemia in pre-dialysis patients with chronic kidney disease, and OncoHist, a recombinant human histone H1.3 compound in development for refractory acute myeloid leukemia. The partnership with Baxter centers on using the biotech’s PolyXen technology platform to develop polysialylated blood-coagulation factors, including a reformulation of Factor VIII.

Baxter’s website notes the company has completed Phase I clinical trials of BAX 855, a longer-acting recombinant factor VIII protein for the treatment of hemophilia A based on the full-length ADVATE [Antihemophilic Factor (Recombinant), Plasma/Albumin-Free Method] molecule. ADVATE is approved in more than 50 countries for hemophilia A, most recently China. --JH

AstraZeneca/FOB Synthesis

AstraZeneca PLC is delving further into antibiotic research through an option licensing deal with drug discovery company FOB Synthesis Inc. The deal, announced Jan. 27, will provide AstraZeneca with access to two of FOB Synthesis’ preclinical carbapenem antibiotic programs, FSI-1671 and FSI-1686, to potentially be combined with a preclinical beta lactamase inhibitor from AstraZeneca’s pipeline. AstraZeneca will develop the compounds through Phase I and then have an option to acquire them outright. The terms of the deal were not disclosed.

Carbapenem antibiotics are a backbone treatment for Gram-negative bacterial infections, but have grown less effective against drug resistant bacteria. FOB’s novel carbapenem products have demonstrated strong activity against Gram-negative infections in preclinical models. Combining an antibiotic like carbapenem with a beta lactamase inhibitor has been shown to help break down bacteria’s resistance to the drugs.

The field is one AstraZeneca knows well. The company already has a novel beta lactamase inhibitor avibactam in Phase III development in combination with the antibiotic ceftazidime in collaboration with Forest Laboratories Inc. The two are studying the drug in five Phase III studies for Gram-negative infections.

While the market for antibiotics that address Gram-positive infections has seen several new entries in recent years and there are several more antibiotics in late-stage development, the market for antibiotics that address Gram-negative infections has been slower to develop while the need for new treatments has grown dire. At least one analyst, ISI Group’s Umer Raffat, puts the market opportunity for antibiotics that treat resistant Gram-negative infections at $2.5 billion.--Jess Merrill


Galectin Therapeutics Inc. enjoyed a bump in its stock price during January, thanks in part to fellow fibrosis treatment developer Intercept Pharmaceuticals Inc.’s clinical success. On Jan. 27, Galectin teamed with cell-based assay developer SBH Sciences to form a joint venture that will investigate oral small-molecule galectin-3 inhibitors.

The two companies will share ownership of newly created, Georgia-based Galectin Sciences LLC. The company will develop a series of compounds SBH recently discovered that show potential in inhibiting galectin-3, one of several galectin proteins implicated in inflammatory diseases, organ scarring disorders and cancers. The collaborative venture will also attempt to discover new compounds using both companies’ expertise. Norcross, Ga.-based Galectin Therapeutics has two clinical compounds currently under development, but both are intravenous rather than oral.

Natick, Mass.-based SBH has provided contract research services to Galectin Therapeutics for more than a decade. Founded in 1997 to develop mammalian-derived recombinant cytokines, SBH now performs in vitro drug development and is a vendor of cytokine-measuring bioassays. Galectin Therapeutics was established in 2000, and was known as Pro-Pharmaceuticals Inc. until 2011. --Paul Bonanos

Actavis/Zhejiang Chiral Medicine Chemicals

Actavis PLC inked a deal with Zhejiang Chiral Medicine Chemicals Co., Ltd to divest its joint venture in China, Actavis Foshan China, the company announced Jan. 24. Terms of the deal were not disclosed. Weeks earlier Actavis CEO Paul Bisaro had said China was an "unfriendly environment" for biopharmaceuticals and that he would pull out of the country.

During the company’s Jan. 31 analyst day in New York, the company said it would continue operations in China with business partners, but it would focus on other emerging markets such as Russia, Brazil, Turkey and Southeast Asia. Global Operations President Bob Stewart told analysts that as the company focused more on supply chain rather than manufacturing, it took out a number of assets through sales and divestitures, and it would continue to do so. Along those lines, Actavis sold a facility in India, a JV in Russia, exited out of two facilities in China and divested operations in China.

“We will always make modifications based on portfolios,” Stewart said, adding, “the map continually evolves.”

"Actavis is focused on strengthening our investment in high-growth markets where our size and scale allow us to maintain a competitive presence with the leading companies in the market," said Actavis Pharma President Sigurdur Oli Olafsson.  "Our operations in Foshan were limited in scope and we believe that their value will be better capitalized on by Chiral, which will add manufacturing and marketing capabilities allowing them to expand their portfolio and strengthen their position in the Chinese market.”

CEO Paul Bisaro told analysts that the company has roughly $2 billion in cash and will look for strategic M&A that will focus on geographic expansion. --Tamra Sami

Friday, January 24, 2014

Deals Of The Week: New Academia/Industry Partnership Template In Eisai/JHU Collaboration?

As founder and president of a coalition working to enhance academic drug-discovery and collaborations between academia and industry, Barbara Slusher has a good idea of the advantages and pitfalls of such arrangements. She points to ongoing work between Japan’s Eisai and Johns Hopkins University, where she serves as director of neurotranslational drug discovery at the medical school’s Brain Science Institute, as a potentially more mutually rewarding template for academic/industry tie-ups.

In October 2011, Eisai signed a five-year drug-discovery alliance with JHU, initially slated to focus on central nervous system targets. Slusher, who heads up the Academic Drug Discovery Consortium (ADDC) in addition to her responsibilities at JHU, said the partners are about 18 months into a partnership currently focused on two targets, one undisclosed. The other is aimed at identifying drug-like molecules that inhibit xCT, a glutamate cysteine exchanger that Eisai believes could offer potential in combating inflammatory disease.

Barbara Slusher, JHU Brain Science Institute
and Academic Drug Discovery Consortium

Under this alliance, written to last the greater of five years or to the completion or termination of all related projects, the Brain Science Institute reviews target research throughout JHU’s roster of researchers and presents potentially novel and interesting targets for Eisai’s review. Eisai then selects the targets of greatest interest for the high-throughput screening collaboration.

The compound libraries generally available to academic researchers are not as large, diverse or drug-like as those found within a biopharmaceutical company’s library, developed through years of wide-ranging R&D work, Slusher said. Slusher came to JHU in 2010 after working in drug discovery at five biopharma companies, including Eisai, and set a goal of establishing collaborations offering greater potential for academic discovery work.

“One of the things that my team did when we first came to Hopkins was try to establish a relationship with a pharma company such that if any targets we identified were of interest to the company, we would develop a high-throughput screening assay, share that with the company, and they would screen using our assay and compound library,” she said.

“At the point that they find hits, they then transfer those back to my team here and we do all the drug discovery and chemistry to identify a compound to get to the clinic,” Slusher added. “At that point, Eisai has first rights to license that compound.”

“The exciting thing about this collaboration is that it is truly a win/win,” she continued. “From my perspective, academia is excellent at identifying new targets of therapeutic interest, but our screening ability is limited due to the size and quality of the compound libraries available. Our collaboration with Eisai gives us access to a real pharma library. From the Eisai side, the collaboration provides access to new targets and novel therapeutic approaches.”

Lynn Kramer, Eisai’s chief clinical officer and president of its Neuroscience and General Medicine Product Creation Unit (PCU), concurs, saying the JHU tie-up and a similar partnership with University College London, offer Eisai “a novel target identification program that incorporates early drug development.”

“For us, it expands the novelty of our programs and it’s designed to utilize the best skills from each of the two partners to facilitate drug development and pass the compounds back and forth between our strengths and their strengths,” he said. The Brain Science Institute is a little unique from an academic perspective in that it has a number of people who have a lot of drug-development experience in pharmacokinetics, medicinal chemistry, toxicology and animal models,” skills that increasingly are available in top academic medical centers as they try to move up the research value chain.
Lynn Kramer, Eisai

Slusher’s team sorts through the most-promising research from a consolidated team of about 550 researchers to find target prospects for Eisai. His company therefore has access to the most concentrated group of neuroscience researchers outside of Boston, but with a single point of contact and first rights to option programs, Kramer said. JHU advances the programs selected by Eisai as far as the IND-ready stage, with pre-arranged terms for licensing fees, milestones and royalties on those assets it takes in-house.

“Eisai has the ability at multiple stages to come in and acquire the project,” Slusher said. “Depending upon when they in-license, the value derived by the university varies. If Eisai in-licenses the drugs early in the process, Johns Hopkins derives less value than if they in-license late in the process. It’s correlative to the amount of effort we’ve put in.”

About 18 months into the collaboration, JHU has developed assays for the two targets, Eisai has conducted high-throughput screening and is now sending first hits back the university for the next stages of work. “We probably have a year or two of chemistry and drug discovery to do before leads will be identified as options for the company,” Slusher noted. “This whole process probably likely will take three to five years.”

Kramer would not specify Eisai’s internal goals for producing a first clinical candidate from the partnership, other than to say “our goal is in the not-too-distant future – by that I don’t mean in a year. This takes a while.”

In general, Kramer thinks further collaboration with academia will be beneficial for his company. ADDC, founded in 2012, intends to serve as a clearinghouse for both academia and industry on research taking place within U.S. and international drug research programs. It doesn’t do tech-transfer work itself, but aims to make it easier for academics and biopharmaceutical companies to work together.

“You see from our two associations that they’re very flexible,” Kramer said. “We have gotten away from a lot of the intellectual property issues that used to plague the industry, because we’re really interested in molecule IP, not target IP, which used to lead to years of back and forth and impaired academic development. By getting over that hurdle, I view the academic groups as our ‘bread-and-butter’ for novel targets. It’s very hard in the industry to develop a novel, previously unidentified target – it’s too expensive and takes too long.”

It wasn’t just the academic world that biopharma companies were dealing with this past week, though. Read on for …

Teva/NuPathe: Teva expects to launch the migraine patch Zecuity (sumatriptan iontrophoretic transdermal system) in the first half of 2014 after acquiring the developer, NuPathe. The two announced the acquisition plans Jan. 21, with Teva’s $3.65 per share offer, approximately $144 million upfront, trumping rival bidder Endo’s proposal of $3.15 per share. Teva, which needs near-term revenue generators, gains a new product to add to its specialty central nervous system portfolio. FDA already approved the drug in January 2013, but NuPathe held out on commercializing it in order to find a partner. The drug is the only patch approved for migraine. The Israeli pharma’s offer represents a significant 58% premium over the $2.30 NuPathe shares closed at on Dec. 13, the last business day before Endo announced its intentions to buy the company. But it doesn’t offer much financial reward for longer-term investors. NuPathe’s stock opened at $3.80 about a year ago, on Jan. 18, the day after Zecuity was approved by FDA. NuPathe investors could receive additional payments, however, of up to $3.15 per share based on the future sales performance of Zecuity. Investors will receive $2.15 per share if net sales of the product are at least $100 million in any four consecutive calendar quarters on or prior to the ninth anniversary launch date. Another $1.00 per share in cash is payable if sales are at least $300 million in any four calendar quarters over the same time period. - Jessica Merrill

Par Pharmaceuticals/JHP Pharmaceuticals: Par Pharmaceutical is looking to expand the types of generic drugs it can offer beyond the solid, oral-dose pills it has been producing for years. The Woodcliff Lakes, N.J.-based company announced Jan. 21 that is has entered into an agreement to acquire privately held JHP Pharmaceuticals for $490 million in cash, a 2.5x return on investment for JHP’s main investor, private equity firm Warburg Pincus. Par has arranged for $505 million in debt financing to cover the deal and related costs. JHP and all of its assets, including a sterile manufacturing facility in Rochester, MI, will become a wholly owned subsidiary once the deal closes later this quarter. JHP was launched in 2007 when it acquired biologics contract manufacturing assets acquired from King Pharmaceuticals (now part of Pfizer) for $92 million. JHP performs contract manufacturing services worldwide for pharma and biotech customers, producing sterile injectables that require liquid, lyophilized and suspension formulations. The King deal also included branded hospital and acute-care drugs that JHP distributes. The main appeal of JHP to Par is the 14 specialty injectables that it already has on the market, as well as 30 additional candidates it has in its pipeline. Par is looking to expand into high-barrier-to-entry injectable generics as some of the major players in that space falter due to manufacturing problems. - Lisa LaMotta

Biocon/Advaxis: India’s Biocon and New Jersey biotech Advaxis announced an exclusive licensing pact Jan. 22 for co-development and commercialization of ADXS-HPV, a novel cancer immunotherapy for treatment of human papillomavirus (HPV)-associated cervical cancer in women. The deal covers India and key Asian emerging markets and gives Biocon access to Advaxis’ innovative and proprietary technology for the development of other novel therapeutics. Advaxis recently completed Phase II clinical trials in patients with recurrent cervical cancer in India, and the immunotherapy also is being evaluated in three clinical trials for HPV-associated cancer like recurrent advanced cervical cancer, head and neck cancer, and anal cancer. A spokesperson for Advaxis said the company will receive double-digit royalties on all sales of its immunotherapy product. The biotech will have exclusive rights to supply ADXS-HPV to Biocon, and Biocon will be required to purchase its requirements of ADXS-HPV exclusively from Advaxis at the specified contract price, which may be adjusted periodically. In addition, Advaxis will be entitled to a “six-figure” milestone payment if net sales of ADXS-HPV for the contract year following the initiation of clinical trials in India exceed certain specified thresholds. - Vikas Dandekar

McKesson/Celesio: In a “No Deal” that has turned into a deal, 10 days after saying its proposed acquisition of German drug wholesaler Celesio had fallen through, U.S. drug wholesaler McKesson has reached agreements that will allow it to complete the purchase after all. McKesson launched its bid to greatly expand its global reach through Celesio in October 2013. However, on Jan. 13 it announced that the deal could not be completed due to its failure to acquire 75% of outstanding Celesio shares through a tender offer. Then, in a Jan. 23 release, McKesson said it had reached an agreement with Franz Haniel & Cie. GmbH to acquire its entire holding of Celesio shares at €23.50 per share and another agreement with an affiliate of Elliott Management to acquire Celesio convertible bonds, which will be enough to give McKesson more than 75% ownership of Celesio on a fully diluted basis. The transactions are expected to close within 10 business days. McKesson plans to launch a voluntary tender offer to purchase shares from the remaining minority shareholders shortly after the close of the other transactions. The company said it will consolidate the financial results of Celesio during its fiscal fourth quarter ending March 31, and McKesson’s earnings will reflect its proportionate share of Celesio’s earnings. It expects to realize annual synergies of between $275 million to $325 million four years after the close of the deal. - Scott Steinke

Photo credits: Johns Hopkins University, Eisai Co. Ltd.

Financings Of The Fortnight Asks For The Envelope, Please...

"And the Best Hair Restoration Product of 2013 goes to..."
It's awards season, as they say in Hollywood, and this blog is no stranger to polished hardware. A bit later, we’ve got another red-carpeted treat for you: The 2013 A-List winners. But first, a story…

Back when Financings of the Fortnight was a cub reporter on the high-tech beat, there was this new thing called a “Web browser” and a company called “Netscape.” The chief proponent of both was a young unassuming fellow named Marc Andreessen. He was, in the day’s currency, a bit of a rock star.  Perhaps you’ve heard of him.

Your correspondent happened to be at a small gathering to hear a panel discussion with Andreessen and others, including Apple Computer’s “evangelist” Guy Kawasaki (yes, tech companies bestowed ridiculous titles upon executives 20 years ago, too, and yes, that is actually his real name). The wiry, California-tanned and caffeinated Kawasaki regaled the audience with his bird/elephant rule for innovation:  one must consume information like a bird. Birds eat far more than their body weight, you see, and thus eat constantly. Then, at the other end, you take what you’ve learned and… how should we put this?... spread it around like an elephant. Andreessen, the big-boned, corn-fed Midwesterner, the phenotypic opposite of Kawasaki, followed. He picked up the mic and said, “Hi, I’m Marc. I try my best to eat like a bird, but usually I just shit like an elephant.”

We reconstruct this true tale to illustrate the trickle-down theory, to underline the importance of inputs and outputs, to draw attention to… oh, all right, we just like telling poop jokes.

But we admit trickle-down is fresh on our minds these days, what with the 2013 US venture data fresh in our inbox. Specifically: did the boffo IPO year for biotechs have any effect at the other end of the, uh, elephant? Have VCs begun spreading it around?

According to DJX Venture Source, health care venture investments in 2013 were up from 2012 ($8.2 billion vs. $7.8 billion) but fell well short of 2010 ($8.8 billion). Looking specifically at the biopharma and device sectors, which make up the bulk of healthcare investment, the 2013 numbers are down a tick from 2012 ($6.6 billion vs. $6.7 billion). No IPO effect there.

But much of the IPO activity in 2013 took place from spring through late summer. Perhaps the typical fourth quarter surge of investments was stronger than normal? Not in devices: 4Q was actually below the 1Q and 2Q totals. And in biopharma, the $1.3 billion for 4Q was the best quarter of the year, but a lower total than the 4Q totals of 2011 and 2012. Keep in mind that one-tenth of that quarterly total went to one company, Juno Therapeutics.

The rival MoneyTree report from PricewaterhouseCoopers and the National Venture Capital Association slices numbers in slightly different ways, but presents essentially the same trajectory. It also reports that first-time life science financings (biotech and device) were at near-record lows for the year: 154 deals total, just squeaking past 2012’s nadir of 148 deals.

So there hasn’t been much evidence of trickle-down, to which you might ask: Why should there be? Returns to old funds don’t simply translate into investments from new ones. LPs got to get paid.
And what if the IPO window slides shut, just as a new batch of hopefuls line up? It’s certainly not clear what kind of reception they’ll receive. Public investors fret that among a fresh flood of offerings, the quality will erode. “Biotech tends to fade when there is an over-supply of equity. More and more lower-quality IPOs continue to be thrust on generalists who don’t understand them,” says Andy Smith of biopharma specialist Mann Bioinvest. “To give management and VCs lots of money, that will continue. Do I want to divest another holding to buy into a new company? We are scraping the bottom of the barrel in terms of quality.”

That’s not what Cara Therapeutics, Dicerna Pharmaceuticals, Auspex Pharmaceuticals, Argos Therapeutics and others currently on their roadshows want to hear. But we think the bellwether for the next few months will be rare disease firm Ultragenyx Pharmaceutical. It’s got big clinical milestones coming up this year, and it’s the only one with a bulge bracket bank amongst its underwriters. (Not one, but two: J.P. Morgan and Morgan Stanley.) That’s a signal the big banks see money to be made, not just on the IPO itself but by establishing a relationship with a biotech that will subsequently be able to successfully raise funds on a large scale. (For more on Ultragenyx, see our roundup below.)

If IPOs continue apace, however, we see the VC trends shifting this year. There will be more liquidity, plus the momentum of new funds raised in 2013: OrbiMed Advisors, Third Rock Ventures, 5am Ventures, Atlas Venture, Frazier Healthcare, and others. They’ve got money to spend. In fact, among the unimpressive venture data from 2013, there was at least one sweet spot that, since the recession, has continued to attract more deals and more dollars: Series A financings.
In START-UP’s annual A-List, due out in a few days, we note that Series A deal flow increased for the fourth year in a row, as did the average dollars per round (in which figures were disclosed). Here’s a teaser:

We think the gradual increase, while overall venture numbers have remained unremarkable, is due to the growing emphasis on “long runway” A rounds, often funded by just one or two main groups. (Or in VC shorthand, A is the new A+B.) Plus, many early stage VCs have seed or equivalent programs for weeding out mediocre investments, but they’re not described or disclosed as seed round financings.  So: fewer first-time financings, but more enthusiasm for the ones that make it to a true Series A. That’s our theory. What’s yours?

While we’re in tease mode, how about the A-List winners of 2013? In alphabetical order, we present: 

Ajax Vascular
Allergen Research
Editas Medicine
GeneCentric Diagnostics
Juno Therapeutics
Middle Peak Medical
PharmAkea Therapeutics
Spark Therapeutics
Syros Pharmaceuticals
Vivex Biomedical

For explanations of our choices, and a deeper look under the hood of the overall Series A numbers, you’ll have to read Start-Up’s A-List feature, due out next week. (Ultragenyx, by the way, is an A-List alumnus: Class of 2011.)

You can get a jump start, however, by continuing with us here, because Juno leads off our roundup this week, just on the other side of our little JPEG… But first, thanks to Stacy Lawrence for extra help with this edition. We also want to thank our families, our producers, Giorgio our makeup artist, our chauffeurs, our spa technicians, and last but not least...

 Juno Therapeutics: Gobs of money. Stunning patient results. Legal disputes. It’s been a busy couple of months for the new cancer immunotherapy start-up. Most recently, the firm said January 13 it reeled in extra Series A cash to push the round past $145 million, with the booster shot coming from Bezos Expeditions, the personal investment company of chief Jeff Bezos, and Venrock. Juno debuted in December with a $120 million Series A round and exclusive license to three autologous cell therapy programs, two of which reported very promising clinical data in 2013. Its programs come from Memorial Sloan-Kettering Cancer Center, the Fred Hutchinson Cancer Research Center, and Seattle Children’s Research Institute. But it turns out Juno also took license to a slice of chimeric antigen receptor (CAR) technologies from St. Jude Children's Research Hospital, and it has jumped in on St. Jude’s side in a dispute with the University of Pennsylvania, whose CAR T-cell program is licensed to Novartis. According to court documents, Juno signed the license agreement with St. Jude the day it made its public launch, December 3, and agreed to shoulder 80% of the legal fees in the dispute with Penn. (For a much fuller description than we can afford here, read our Pink Sheet colleague Brenda Sandburg’s account here.) The lead scientist behind Penn’s CAR T-cell program is Carl June. Now, of course, “Juno” was the queen of the Roman gods and certainly makes an appropriate name for a big important new company. But seeing how the company knew well before its launch it would be going a few rounds, legally speaking, with Penn – June v. Juno, in a manner of speaking – you have to wonder if the name is also a sly tweak of the nose. – Alex Lash

GlycoMimetics: Two months after postponing its IPO, GlycoMimetics succeeded in going public on January 10th, grossing $64.4 million by selling 8.1 million shares (including the over-allotment) for $8. The biotech ended up offering more than the 5.75 million shares it had planned but at a steep haircut to its $14-16 price range. The IPO is the first in the biotech space in 2014, or second if you count rare disease-focused Retrophin's move to Nasdaq from the OTC exchange. GlycoMimetics develops small molecules that mimic the structure of carbohydrates involved in key biological processes, in particular the complex carbohydrates that attach to the surface of proteins, altering their function and interactions with other molecules. Its first target is selectin, an adhesion protein involved in inflammation in multiple diseases. Lead compound GMI1070 (rivipansel), an E-, P-, and L-selectin antagonist, is in Phase II for painful vaso-occlusive crisis (VOC), a severe complication of sickle cell disease. It has US and EU orphan drug status, and if approved, the company claims it would be the first drug on the market to interrupt the underlying cause of VOC, which is currently treated by just managing the symptoms. Pfizer holds exclusive worldwide rights to GMI1070 under a 2011 deal. GlycoMimetics’ next project is preclinical GMI1271, in combination with chemotherapy for acute myeloid leukemia and other hematological cancers. An IND for the E-selectin inhibitor is planned for Q1 2014. Since the company’s 2003 founding, GlycoMimetics has raised nearly $63 million; its principal shareholders are New Enterprise Associates, Genzyme Ventures, Anthem Capital, Alliance Technology Ventures, and Rosetta Capital. – Amanda Micklus

Ultragenyx Pharmaceutical: For its upcoming IPO, Ultragenyx has proposed to sell 4.8 million shares at $14 to $17 per share; that would raise $75 million at the mid-point and value the company at $436 million. It expects to price on or around Jan. 30. The biotech already has a legion of top-flight crossover investors to ease its transition to the public markets, including Adage Capital Partners, Capital Research, Columbia Wanger Asset Management, Jennison Associates, BlackRock and Cowen’s investment arm Ramius. Cowen and Canaccord Genuity join bulge-bracketers J.P. Morgan and Morgan Stanley as underwriters. Existing shareholders paid an average price of $4.68 per share, according to the S-1 filing with the SEC. The biotech’s strategy has been to go after low-hanging fruit in the rare disease space by in-licensing candidates with a clear mechanism in which the patient is missing something that can be restored through treatment, CEO Emil Kakkis said on the road show. It expects clinical data from five programs in the next 18 months, and is one of several biotechs with IPO ambitions that have big clinical milestones this year, as we report in the current START-UP. Ultragenyx anticipates Phase I/II data for KRN23, a monoclonal antibody to treat adults with X-linked hypophosphatemia, and for recombinant human beta-glucuronidase (rhGus), an intravenous enzyme replacement therapy to treat mucopolysaccharidosis 7 patients. In late 2014, it also expects additional Phase II data for an extended-release, oral formulation of sialic acid to treat hereditary inclusion body myopathy. – Stacy Lawrence

Alkermes: The expert on long-acting injectable drugs used the J.P. Morgan stage to announce January 13 a $248 million financing through the sale of 5.9 million shares to Invesco Perpetual Income Fund and Invesco Perpetual High Income Fund at a price of $42.25 a share, a 2% premium. The sale gives Invesco a 4% stake in Alkermes. CEO Richard Pops followed the follow-on news with an announcement January 14 that the company expects to file a long-acting injectable form of the atypical antipsychotic Abilify (aripiprazole) in the second half of 2014, with a potential launch expected in 2015. Abilify is copromoted by Otsuka Pharmaceutical and Bristol-Myers Squibb. The Invesco investment adds to the $395.2 million on Alkermes’ balance sheet as of Sept. 30, 2013, and gives the company more flexibility as it moves into the next phase of its lifecycle as it continues to develop its late-stage neurology pipeline. The sale of a significant slice of outstanding shares hasn’t dampened investor spirits; Alkermes shares closed January 22 at $50.52, up 133% from where they stood a year ago. – Jessica Merrill and Alex Lash

Best of the Rest (Highlights of Other Activity This Fortnight): Two cancer-focused companies completed Series A rounds: Madison Vaccines, a firm with a Phase II prostate cancer vaccine (MVI816), brought in $8 million in an offering led by Venture Investors... University of Basel spin-off Piqur Therapeutics closed an oversubscribed Series A round from existing shareholders and new industry investors concurrent with the start of Phase I European trials for its mTOR inhibitor PQR309... Regenerative medicine company Athersys closed a $20.5 million registered direct offering of common stock and warrants to fund ongoing clinical trials; it has pipeline programs in inflammatory bowel disease, ischemic stroke, myocardial infarction damage, and graft-versus-host disease prevention... Three months after closing its $89.5 million IPO, rare disease therapeutics developer Acceleron Pharma priced a FOPO of 2.4 million shares at $50, grossing $120 million…after postponing its IPO in October 2013, Celladon (calcium dysregulation therapeutics) has revived the offering with a new S-1 filing… RNA start-up Moderna Therapeutics spun out its 15 oncology assets into Onkaido Therapeutics and invested $20 million in the new company, which will be run by run by Stephen Hoge, Moderna’s SVP of corporate development. – Maureen Riordan

Photo from the Gulltaggen award show courtesy of Jarle Naustvik via Creative Commons license.

Friday, January 17, 2014

Deals Of The Week: New Remedies Sought From Nature And Old Technologies

To help calm many a frazzled J. P. Morgan attendee trying to get to grips with new ideas, technologies and market entrants announced each year at that key U.S. conference, there’s nothing like a return to tried and tested modalities, particularly in drug discovery.

Two deals announced this week in Europe appear to herald just such a return to basics, although on closer inspection these older drug discovery methods – searching through natural product libraries for active substances -- and the use of high throughput screening -- have never really gone away.

The first Europe-centered agreement, between France’s Sanofi and Germany’s applied research institute, the Fraunhofer Institute for Molecular Biology and Applied Ecology, involves  identifying potential therapeutic substances from natural sources, mainly micro-organisms, to boost the number of antibiotics in development.

It might seem old hat: the venerable old-timer penicillin was isolated from natural sources, for example.  Still, the collaborators are introducing a couple of new twists. They are going to work together, as one team in shared labs on analyzing the genetics of micro-organisms, stimulating them to produce new active substances, and identifying those substances with therapeutic potential. It’s part of Sanofi’s drive to get  closer to cutting-edge science and external collaborators.

A new facility will be built on the Institute’s campus to house the researchers. Cross-pollination between this collaboration and Sanofi’s on-going alliance with venture-backed biotech Warp Drive Bio, which is scouring the genome of soil samples for examples of natural products with therapeutic potential could be possible. Under that 2012 deal the French pharma gets right-of-first-refusal for all candidates stemming from the target area of the biotech’s first genomic search.

The German researchers have a secret weapon: access to Sanofi’s huge (150,000-plus samples) collection of micro-organisms built up by predecessor companies like Hoechst and Synthelabo, as well as by its own labs.  The Fraunhofer Institute, a network or more than 60 research centers mainly based in Germany, with 30% of its funding from the German government and 70% from  industry partners, gains from the deal by being able to exploit Sanofi’s collection for non-medical uses with its own partners. In the crop protection area, for instance, Sanofi could develop compounds that have potential as human or animal medicines.

The lack of new classes of anti-infectives nearing the market has horrified many public health experts, who are concerned by the emergence of bacterial resistance to commonly used agents. Thereis  not a lot left in the locker to treat life-threatening infections. So it’s good news that other companies, such as Roche, have re-energized their research efforts in the field.

The week’s second European deal involves the setting up of a European joint venture called Hit Discovery Constance GmbH to conduct high-throughput screening (HTS) for biotech and academic partners, and to act as a storage and management facility for compound libraries.

HTS has been a disappointment to some; nonetheless it is now commonplace throughout industry and is often used to narrow down the choice of compounds likely to bind to targets, which are then refined through computer-based analysis and other processes.

Hit Discovery Constance is based in facilities in Constance, Germany, that have had a long line of previous owners – most recently Takeda Pharmaceutical Co. Ltd., and before that Nycomed SPA and Altana Pharma GmbH. Three European companies – Germany’s Lead Discovery Center, Italy’s Axxam SRL and Belgium’s Centre for Drug Design and Discovery - have set up the joint venture to run a fully-automated robotic screening system using a library of compounds assembled by the partners. Combined with other novel biochemical, bioassay and HTS technologies developed by the three partners, Hit Discovery Constance will be one of the largest screening hubs worldwide.

The revival of technology previously thought to be a disappointment was also featured in the standout deal that kicked off the J. P. Morgan meeting, between RNAi developer Alnylam Pharmaceuticals Inc. of the U.S. and Sanofi’s biotech unit Genzyme.--John Davis

Now, time to get on with deals on other fronts. In a week that saw far more than its fair share of activities, we've culled some of the highlights, below:

Moderna/Alexion: A number of deals were made and broken within the RNA space during the J.P. Morgan gathering, including Moderna Therapeutics Inc.’s news it landed another major partner for its preclinical messenger RNA technology. Rare disease specialist Alexion Pharmaceuticals Inc. will pay $100 million upfront to purchase 10 product options and is taking a $25 million equity stake in the company. Moderna will use its mRNA platform to discover molecules for rare diseases and then transfer all rights to Alexion, which will handle preclinical and clinical work on the molecules. Moderna will be eligible for clinical-stage and regulatory milestones as well as high-single-digit royalties on any resulting products.

This deal is similar to one Moderna struck with AstraZeneca PLC in March 2013 for the rights to more than 40 cardiovascular assets. The British pharma paid $240 million for the options. In both deals, Moderna will be eligible for undisclosed clinical and regulatory milestones, as well as royalties on any products that result. Moderna’s technology is designed to use messenger RNA to spur the production of therapeutic proteins. A day later, Moderna also announced that it was spinning out a satellite company, Onkaido Therapeutics to focus exclusively on oncology. Moderna is providing Onkaido’s first $20 million in capital.--Lisa Lamotta
Regeneron/Geisinger: Cash-rich Regeneron Pharmaceuticals Inc.’s collaboration with Geisinger Health System on studying genetic determinants of human disease is one of the most ambitious efforts to date by a drug company to systematically apply genomic sequencing to the discovery of new drugs.

The deal is broad and long-ranging, initially signed for five years, but with a horizon that could go out 10 years. Announced on Jan. 13 at the start of the J.P. Morgan meeting, it calls for Regeneron to perform the heavy lifting on sequencing and genotyping and for Geisinger to provide samples collected from its patient volunteers.  From Regeneron’s perspective, correlating genetic variations and human diseases could yield insights about disease and biomarkers leading to development of better drugs. Geisinger, at the same time, is looking for funding for its own research programs and to incorporate genetic advances into clinical care of its patients. Regeneron separately but simultaneously said it was creating a subsidiary, the Regeneron Genetics Center LLC, based at its Tarrytown campus, to pursue both large-scale and family-specific genomics studies.

The research collaboration will seek to sequence a minimum of 100,000 patients who are part of Geisinger, which treats three million people a year.  During the initial five-year collaboration term, the Regeneron Genetics Center will perform sequencing and genotyping to generate de-identified genomic data. The size and scope of the study are meant to allow great precision in identifying and validating the associations between genes and human disease. No money changed hands, but Regeneron will pay Geisinger for its services. Down the road, if drugs or diagnostics come to market, Geisinger will receive small royalties on sales of products.--Wendy Diller

Prosensa/GlaxoSmithKline: For our top “No-Deal of the Week,” GlaxoSmithKline has exited its 2009 collaboration in Duchenne muscular dystrophy (DMD) with Prosensa Holding BV, but the Dutch biotech is determined to continue advancing a portfolio of DMD candidates on its own, at least for now.

Few observers were surprised when GSK decided to terminate the partnership Jan. 13, but Prosensa says it hopes to continue developing drisapersen, a Phase III RNA antisense oligonucleotide exon-skipping compound which failed a Phase III trial last September.

In theory, drisapersen and Prosensa’s other candidates, three of which have reached mid-stage clinical development, address the underlying cause of DMD with exon-skipping technology that restores the expression of dystrophin protein. GSK paid $25 million upfront, with the potential for up to $665 million in milestones, in October 2009 for exclusive worldwide rights to drisapersen, as well as options on three other exon-skipping candidates. Although drisapersen demonstrated efficacy, as measured by improvement in the six-minute walk test (6MWT) in two other placebo-controlled trials, the companies announced Sept. 20 that it failed to meet its primary efficacy endpoint in the Phase III DEMAND III study.

Prosensa CEO Hans Schikan did not specify whether Prosensa paid GSK anything to re-acquire its intellectual property rights, including the options GSK had held, but said the multinational pharma holds no downstream rights for any of the DMD candidates. Prosensa earned at least $28 million in milestones under the collaboration with GSK, but Schikan said that cash was secondary in importance to the role GSK played in advancing drisapersen. “After this collaboration with GSK, and thanks to their commitment, we now have the largest database in DMD,” he said. He noted Prosensa probably never would have been in a position to develop this compound in this way. More than 300 patients have been treated in various clinical trials.

Schikan would not be pinned down on whether Prosensa will seek another co-development partner for drisapersen. The first order of business is to meet with stakeholders to see if there is a regulatory path forward for the compound, he said.--Joseph Haas

McKesson/Celesio: Our other notable “No-Deal” was McKesson Corp.’s announcement Jan. 13 that it had failed to complete the acquisition of Germany-based drug wholesaler Celesio AG because it did not attain the necessary 75% share position through its tender offer, despite raising its bid to €23.50 per share from the original €23. The acquisition was an effort to expand McKesson’s global reach, but the outcome was contingent on acquiring a minimum of 75% of shares on a fully diluted basis. The bid was announced in October.

McKesson CEO John Hammergren raised the topic during the company’s presentation to the J.P. Morgan Healthcare Conference, also on Jan. 13, and said redoing the tender offer was not a possibility. As a result, the failed offer “clearly puts us back to the drawing board in some respects.”

“Although we remain optimistic that we will continue to find ways to add value to our company through capital deployment and continued scale, it's not clear to us that Celesio will be part of that,” he said. However, asked if a joint venture with Celesio might be an option, he observed, “We obviously have been talking to Celesio for some time about various alternatives. I think clearly there is an opportunity for us to venture with them and jointly buy. In the past, we had the view that an acquisition and the complete control of the asset would give us faster and better throughput than a joint venture would, but clearly a joint venture would be an alternative to consider.”--Scott Steinke


Wednesday, January 15, 2014

Return to Seller: GlycoFi Next Tech to Exit Merck?

As the J.P. Morgan conference began to clog the San Francisco streets and restaurants on Sunday night, Alnylam Pharmaceuticals got the party started with a bang. In industry's first major deal of the year, Alnylam signed a broad agreement with Sanofi’s Genzyme Corp. and, separately and perhaps more dramatically, bought Merck & Co.’s RNA interference assets (essentially the remnants of Sirna Therapeutics) for $175 million ($25 million was cash and $150 million in Alnylam stock).

The latter deal unleashed the schadenfreude. Merck paid $1.1 billion for Sirna, then Alnylam’s biggest RNAi rival, back in 2006. It had been predictably if annoyingly tight lipped about any progress (or lack thereof) it was making with RNAi therapeutics ever since. And with 200 people within Merck working to surmount the therapeutic modality’s famous delivery challenges and more or less build an RNAi franchise for most of the past seven years, $1.1 billion was likely just the tip of the iceberg.

Why Alnylam wanted Sirna goes beyond (figuratively of course) putting the stuffed head of its former rival on the wall in the Cambridge company’s boardroom (but sure, on some level, that’s gotta be part of it?). Merck apparently did make some progress on sub-q delivery of RNAi and it had some IP that Alnylam likely wanted to tie up.

The broader point is that technologies once coveted by pharma but now seen as dead-end cost centers or just gathering dust may have utility – and potentially a lot of value – back out in the broader world. That’s been true for drug candidates for a long time – and we’ve seen plenty of deals where a company has acquired valuable drug compounds and eventually sold them off, even back to the VCs and executives that offloaded them in the first place (think Esperion, Vicuron, etc.).

Those originators are often the best placed to understand the compounds or technology and make another go at driving value. And Merck’s decision to part ways with Sirna and RNAi (and the ongoing reorganization the company’s R&D group) got us thinking about what other technologies the pharma may offload. One that comes to mind was another high-profile 2006 acquisition: the yeast-based antibody manufacturing play GlycoFi.

Allow us to speculate:

In May 2006 Merck plunked down $400 million to buy the technology. On a Sirna-scale, that’d mean a $10 million (or less!) down payment might be enough to extricate the technology. And GlycoFi founder Tillman Gerngross and his venture backers are now at the center of myriad antibody discovery partnerships via the decidedly profitable Adimab and a small handful of drug development start-ups enabled by the Adimab technology. They would be a logical set of suitors (Gerngross wouldn’t comment).

GlycoFi’s glycoengineering and optimization technologies would surely complement Adimab’s yeast-based antibody discovery tech. The company was never fully integrated into Merck and is still based in Lebanon, NH, home to Adimab and Gerngross’s other ventures (if the two companies don’t share an address, they’re at least within walking distance to each other near Dartmouth). GlycoFi was meant to enable Merck’s follow-on biologics strategy, but the big company’s ambitions around what is now biosimilars have shifted over the past several years. Biosimilars leadership specifically and R&D leadership more generally has turned over. GlycoFi’s ‘internal champion’ at Merck is likely gone. Merck is, like other big companies, shrinking its R&D footprint.

Adimab has somewhat famously – famous for the set that converges around Union Square in San Francisco this time of year, anyway – advertised its technologies and successful partnerships on the Powell-Mason cable cars that roll up the hill out front of JPM’s epicenter St. Francis hotel. The current biotech boom feels very much like a throwback and so it’d be fitting: maybe next year we’ll see GlycoFi on those cars instead?

Friday, January 10, 2014

JPM Survival Guide: DOTW Keeps the Party Going

The last few years have been quite a bash for biotech. Astoundingly, the NASDAQ Biotechnology Index (NBI) has added more now than it did during the genomics bubble.

Since the current biotech rally started around August 2011, the NBI has increased about 1,500 points. Around the turn-of-the-millennium, the NBI rose around 1,200 points in a year and a half. Then over the following roughly two years, the NBI proceeded to give back all but about 200 points of that gain by mid-2002.

That makes the ongoing, almost two-and-a-half year upswing the longest, highest biotech rally to date. 

Does this make anyone else nervous? Apparently not, at least not yet.  (In December, Mark Schoenebaum of ISI Group circulated a succinct, hypothetical argument for the bear case in biotech. But this is not his view on the sector.)

Going into the 32nd Annual J.P. Morgan Healthcare Conference, optimism in the sector is continuing unabated. The NBI is up over 5% already this year, by market close on Jan. 10.

That doesn’t even include the phenomenal, two-day 516% climb for Intercept Pharmaceuticals after its Data Safety Monitoring Board recommended stopping early for efficacy at an interim analysis of a Phase II trial of its obeticholic acid to treat the liver disease nonalcoholic steatohepatitis. Intercept isn’t an NBI component. In one week, the biotech has leapt from mid-cap into large-cap territory; it now has a market cap of $8.6 billion, up from $1.4 billion ahead of the news.

On the news front at JPM, Wall Street expects Celgene and Acorda will pre-announce 2014 guidance at JPM. Celgene has hinted it may also update its long-term guidance for 2015 and 2017. Exceeding even the very early JPM curve, Eli Lilly and Bristol-Myers Squibb have already pre-announced their 2014 guidance.

Other likely highlights include various details from big biopharmas with recent management changes. We could get hints from Teva about the direction it plans under newly appointed President and CEO Erez Vigodman, as well as some color from Amgen on why CFO Jonathan Peacock is departing.

The above should give you a few talking points, as will the deals discussed below. That’s essential when you run into industry colleagues you are just meeting or seeing for the first time in years.

A list of all the JPM parties is also indispensable. Last year was the first time we saw a spreadsheet of all these events. Despite the fact that the Excel document ran a couple of pages, shockingly there were still a few omissions discovered by us and a hedge fund manager who shall remain anonymous.

One of this year’s versions of the JPM party list, linked to above, has been upgraded to a PDF and carefully annotated to note invitation-only parties. Although we wonder, isn’t this list specifically designed for party crashers? Or, maybe it’s just so we’ll know all the fabulous parties we weren’t invited to? The most prosperous entities at any given time always seem to commandeer the penthouse at the pricey Clift Hotel, but of course no spot is cheap at the height of the conference.

Another JPM must is a lot of hand-washing – someone at the last JPM gave DOTW a horrible case of the stomach flu that felled us by Wednesday afternoon. Not to alarm anyone, but the number of flu cases in the U.S. is peaking right now, with a heavy concentration in the Western states. And a San Jose hospital reportedly set up an over-flow tent because of all the flu patients. So, avoid shaking hands with all those Silicon Valley VCs, unless you really need their money.

And for the ladies: no high heels, please. Unless you’re a former model trained to stand the fourteen hours of pain or you are powerful enough to have a suite where everyone is coming to you. Although JPM has promised it’s working to cut back on some (non-paying) attendees this year, so perhaps there will be ample seating at every major session and the hallway traffic will flow freely. Or not.

Most importantly, remember to 'slip' at least once and call the conference H&Q. So, everyone will know you’ve been coming to the conference for a long, long time.

As promised, we continue below to give you ample party-chatter fodder with the latest on biopharma wheeling and dealing in this week’s missive of  . . .

Forest/Aptalis: Forest Laboratories continues to build on the business development strategy of new CEO Brent Saunders with its $2.9 billion buy of privately-held Aptalis on Jan. 8. The specialty pharma has been trying to flesh out its key therapeutic areas – CNS, CV, GI, respiratory, and anti-infectives – since Saunders took over the top slot in October. This strategy began with Forest’s $240 million purchase of the antipsychotic Saphris (asenapine) from Merck & Co. in December; building on the company’s central nervous system franchise, which includes the antidepressants Viibryd (vilazodone) and Fetzima (levomilnacipran). Aptalis will give Forest multiple products in the GI space – Carafate (sucralfate) for duodenal ulcer disease and Canasa (mesalamine) for ulcerative proctitis, as well as others. The privately held company also has a strong presence in the cystic fibrosis space in Europe, where it owns three of the five approved drugs for pancreatic enzyme insufficiency: Zenpep, Ultrase and Viokase (pancrelipase, in three formulations). Forest sees this as a way of bolstering its Colobreathe (colistimethate sodium) business. The drug was approved in February 2012 in Europe for the treatment of cystic fibrosis patients aged 6 years and older with chronic lung infection caused by P. aeruginosa. The spec pharma hopes eventually to bring those products to the U.S. market. Forest is acquiring all outstanding shares of the TPG Capital-backed Aptalis with a mixture of cash and debt. The company has secured a $1.9 billion bridge loan to close the deal within the first half of the year, pending regulatory review. The acquisition is expected to add $700 million to 2015 revenues and be immediately accretive to earnings. -- Lisa LaMotta

Royalty Pharma/Fumapharm investors: Royalty Pharma – the investment firm that buys up royalty streams on marketed drugs – is doubling down on its investment in Biogen Idec’s multiple sclerosis drug Tecfidera (dimethyl fumarate), the stand out drug launch of 2013. The firm announced Jan. 6 it would acquire more interest in the earn-outs payable to the former shareholders of Fumapharm for $510 million. Biogen Idec gained dimethyl fumarate with the acquisition of Fumapharm in 2006. Royalty Pharma already owns an interest in Tecfidera from a deal inked with Fumapharm investors in 2012, when it paid $761 million for some rights, back before the drug was approved by FDA. Now it’s obvious why Royalty has come back for more. Tecfidera, which launched in April, appears on pace to generate more than $1 billion in its first 12 months on the market. The royalty company won’t say how much of the sales it stands to receive. Fumapharm investors still own rights to a “substantial portion” of the earn-outs, Royalty said. Under a complicated payout scheme laid out in Biogen Idec’s SEC filings it appears the entire earn-out is worth about 10% of Tecfidera sales annually if the drug reaches $3 billion in sales, which it now seems likely to do. -- Jessica Merrill

Biogen Idec/Sangamo: In a move that could help validate its proprietary genome-editing technology and further strengthen its balance sheet, Sangamo BioSciences signed a worldwide collaboration and licensing agreement with Biogen Idec on Jan. 9 to co-develop potentially curative stem cell therapies for sickle cell disease (SCD) and beta-thalassemia. During a same-day conference call, Sangamo President and CEO Edward Lanphier noted that those two hemoglobinopathies are serious diseases with sub-optimal current treatment options. There are a number of symptomatic approaches to treating the two conditions that do not address the underlying cause of the disease. And while a bone marrow transplant of hematopoietic stem cells can be curative, such procedures are rare due to a lack of ideal matching donors and the risk of graft versus host disease. Biogen is paying $20 million upfront for worldwide license to both Sangamo’s zinc finger nuclease technology platform and its preclinical intellectual property for treating the two diseases. Richmond, Calif.-based Sangamo also can earn up to $300 million in development, regulatory, commercialization and sales milestones under the agreement with Biogen, along with double-digit royalties on any product sales. In addition, the biotech has an option to co-promote for either indication in the U.S., a decision which the company will not need to make for some time, Lanphier said. Sangamo will continue to perform all R&D activities through the first clinical proof-of-concept trial in beta-thalassemia, while the companies will work together on the IND-enabling work for the program in SCD. Biogen will be responsible for all subsequent clinical development and commercialization of both programs, and will reimburse Sangamo for its internal and external R&D costs related to both programs. -- Joseph Haas

Johnson & Johnson: To bolster its network of innovation centers, the global health care company said this week it has helped establish a new incubator in Israel and has signed early stage collaborations or made investments with eight biotech and academic groups. Johnson & Johnson is teaming with the Israeli government, Takeda, and venture firm OrbiMed Advisors to open the facility in early 2014, adding to incubators J&J has opened with partners in Montreal, Toronto, San Francisco, and Boston. J&J’s Janssen group also runs an incubator in San Diego. The collaborations or licenses are with Cambridge, Mass. biotech Scholar Rock, to pursue new biologics that target TGF-beta 1 for immune-mediated disease; Intrexon, to develop new consumer hair and skin products; University of Texas's MD Anderson Cancer Center, to develop a translational program for cancer immunotherapy; diagnostic firm Nodality, to hone J&J’s immunology R&D, particularly in rheumatoid arthritis and inflammatory bowel disease; and Dutch firm Bioceros, for exclusive rights to develop a monoclonal antibody against an immune checkpoint modulator. Through its venture arm Johnson & Johnson Development Corp., the J&J Innovation group also announced investments in Assembly Therapeutics, which is developing allosteric modulators to treat Hepatitis B and other viral infections; TopiVert, which is working on topical medicine for inflammatory diseases; and SutroVax, a new entity spun out from antibody platform company Sutro Biopharma to pursue vaccines. -- Alex Lash