Deals of the Week Takes Time to Travel

Like any conscientious time traveller, a biopharma needs to tread carefully around iterations of its current, past and future deal-making self. (Spoiler alert!) In the new sci-fi flick Looper, the younger version of Bruce Willis does a terrible job cultivating his present while tending to his future and reconciling himself to his past. But this week Celgene proved a bit more adept than the action hero at tending to its past and future self. The biotech bellwether disclosed a pair of early stage deals, while putting out positive data that helps justify its largest acquisition to date.

The biotech added two cancer deals, one to develop a Phase I immunotherapy with VentiRx and the other a research partnership with the Leukemia & Lymphoma Society (LLS). Celgene has now disclosed six partnerships this year, the most since 2007 when it inked 10.

Celgene will pay VentiRx $35 million upfront to develop Toll-like receptor 8 (TLR8) agonist, VTX-2337, in cancer indications. The two companies will advance the compound in a pair of Phase II trials in ovarian and head-and-neck cancer over the next few years under an exclusive, worldwide partnership. Celgene also gains an option to purchase the company. VentiRx is eligible to receive additional funding during the option period, including a potential equity investment by Celgene.

In-licensed from Array BioPharma in 2007, ‘2337 is an immunotherapy that directly activates human myeloid dendritic cells, monocytes and natural killer cells to produce high levels of mediators which orchestrate the integration of a patient’s innate and adaptive anti-tumor responses, according to VentiRx.

Celgene included a similar option to purchase in its deal late last year with genomics start-up Quanticel, which got $45 million upfront and sold an undisclosed amount of equity to Celgene. The biopharma gained exclusive third-party rights to Quanticel's platform, which conducts single-cell genomic analysis of tumor samples.

Likely even more long range than the VentiRx deal, the LLS partnership seeks to identify and fund blood cancer research projects. The idea is to use the patient advocacy group’s connections with academic research centers to advance the scientific and medical understanding of hematological malignancies. The partners will also work with biotech companies to help develop of novel treatments for blood cancer.

Defining its present and past, Celgene also helped make the case this week for its $2.9 billion acquisition of Abraxis BioScience, which was met with skepticism when announced in 2010, with the disclosure of positive Phase III data for Abraxane in melanoma. The company’s share price climbed nearly to $80 on the news. That’s close to its 52-week high, but Celgene still hasn’t broken out of the roughly $50-$80 range it’s been in for about six years.

Now that Abraxane has hit some milestones and has a slew of upcoming catalysts Celgene may not wish it could go back in time to undo the deal, although there were plenty of investors who wished it could do so in the deal’s aftermath.

Abraxane (paclitaxel protein-bound particles for intravenous suspension) has an Oct. 12 PDUFA date for the treatment of non-small cell lung cancer (NSCLC). An approval in NSCLS would be the first new indication for the drug since Celgene acquired Abraxis. At the time, Abraxane was already approved as a second-line treatment for metastatic breast cancer.

If it can successfully add NSCLC, along with melanoma and pancreatic cancers, Celgene is expected to build Abraxane into its next blockbuster franchise. Just modelling sales for second-line breast cancer and NSCLC, Jefferies analyst Thomas Wei expects Abraxane could hit more than $1 billion in sales by 2016 or 2017.

Still, Abraxane may be little help when it comes to Celgene’s long-term patent issues. The drug comes off patent in the U.S. next year, but newly approved indications would have five to seven years of protection, said ISI Group’s Mark Schoenebaum in a note this week. He expects Abraxane IP to hold up through 2020 in the U.S. Revlimid (lenalidomide) starts losing IP protection as early as 2019; it accounted for two-thirds of Celgene’s $4.7 billion in net product sales last year.

But as sci-fi aficionados know, when time travel is involved current and future selves often end up at odds, if not at outright war. Celgene needs to hit a lot of milestones including next week’s Abraxane PDUFA date and Phase III pancreatic data for the drug this quarter.

Celgene isn’t the only one working to get a glimpse of a rosier future. See who else is partnering up to do so in this week’s installment of . . .

Sanofi/Genfar: Sanofi chief executive Chris Viehbacher seems as good as his word when it comes acquisitions. Three weeks after identifying Colombia as an attractive emerging market to be in, he bagged the country’s second-biggest generics maker, Genfar. While in China last month at the World Economic Forum, Viehbacher identified Colombia, Vietnam and Indonesia as emerging markets that look attractive in terms of growth. On Oct. 2 Sanofi announced it was buying Genfar, which had total sales last year of $133 million, some 30% of that from outside Columbia. The purchase builds on Sanofi’s previous forays into Latin America comprising the $662 million purchase of Medley Pharmaceuticals, the big Brazilian generics maker, in April 2009, just days after the French company bought Mexico's Kendrick Farmaceutica. Genfar does business in Venezuela, Peru, Ecuador and 10 other countries. No financial terms were announced. Viehbacher has been diversifying the group since he took control in 2008 by acquiring small or mid-sized companies in areas including vaccines, over-the counter drugs and generics, especially in fast-growing emerging markets, such as Eastern Europe, Latin America and Asia. So, does the Genfar purchase mean Viehbacher – who has said Sanofi is open to “bolt-on” transactions of as much as €2 billion ($2.6 billion) this year – will soon announce deals in Vietnam and Indonesia? It would seem a safe bet. – Sten Stovall

Janssen/Astellas: J&J-owned Janssen Biotech beefed up its autoimmune pipeline by acquiring rights to Phase II Janus kinase inhibitor ASP015K from Astellas Pharma. Horsham, PA-based Janssen paid $65 million up-front in the Oct. 1 deal, which also includes development, regulatory and commercial milestones that could add $880 million to its value. Janssen would also pay double-digit royalties if the drug is commercialized. The deal covers the entire world except for Japan, where Astellas retains rights. Astellas has already conducted a Phase IIa study of the drug in moderate-to-severe plaque psoriasis patients, and will complete three Phase IIb trials already underway in rheumatoid arthritis. Janssen will assume all further development costs outside Japan after those studies are completed. The drug could be an eventual successor to Janssen’s top-selling Remicade (infliximab) and Simponi (golimumab), both of which are approved in RA, psoriatic arthritis and ankylosing spondylitis. No JAK inhibitor has yet been approved for rheumatoid arthritis, but FDA is soon expected to rule on Pfizer’s tofacitinib, with a PDUFA date of Nov. 21. – Paul Bonanos

Takeda/LigoCyte: The Japanese pharma is making good on its commitment to make vaccines a priority. Takeda will acquire vaccine play LigoCyte for an upfront payment of $60 million, with additional undisclosed contingent development payments. Late last year, Takeda announced the establishment of a Vaccine Business Division. To run the new division, Takeda hired the former director of vaccine delivery in the Global Health Program at the Bill & Melinda Gates Foundation, Rajeev Venkayya. Prior to the Gates Foundation, Venkayya was the special assistant to the President for Biodefense at the White House. With the Ligocyte acquisition, Takeda will gain a Phase I/II vaccine to prevent norovirus gastroenteritis, the only norovirus vaccine in clinical trials, according to the company. Novovirus is the most common cause of gastroenteritis and food-borne illness in the U.S. and the cause of about 200,000 deaths annually, mostly in developing countries. The norovirus vaccine uses LigoCytes proprietary vaccine-like particle (VLP) technology. Takeda will also gain LigoCyte’s preclinical vaccines against respiratory syncytial virus, influenza and rotavirus. LigoCyte management will join Takeda’ Vaccine Business Division and continue to operate in Bozeman, Montana. - Stacy Lawrence 

Evotec/Bayer: Two European pharmas forged a multi-target alliance to develop clinical candidates to treat endometriosis. Bayer Pharma paid €12 million ($15.5 million) up-front to enter a five-year collaboration with Hamburg-based Evotec, with a goal of discovering up to three clinical candidates and jointly bringing them through preclinical research. Bayer will assume development costs related to the drugs upon their entry into the clinic, and could owe Evotec up to €580 million in preclinical, regulatory, clinical and commercial milestone payments, plus low-double-digit sales royalties, if the drugs advance and are commercialized. Bayer already markets Visanne (dienogest), a once-daily oral tablet that treats pain and lesions associated with the disorder, as well as a variety of other women’s health products including contraceptives. Endometriosis, which most frequently afflicts women between 25 and 35, is said to affect 176 million women worldwide, including about 10 percent of women of reproductive age. – P.B.

Servier/Ethical Oncology Science: French drug maker Servier is again moving to bolster its oncology pipeline through a deal with the Italian biopharma Ethical Oncology Science, its second in-licensing deal in as many weeks. In the latest agreement, Servier has acquired rights to an early clinical-stage antitumor drug targeting Fibroblast Growth Factor Receptor 1 and Vascular Endothelial Growth Factor Receptor 1-3, the company announced Oct. 1. In exchange Servier will pay €45 million ($57.5 million) upfront for rights outside the U.S., Japan and China. In those territories, EOS will retain rights. EOS also stands to receive clinical and registration milestones as well as royalties. The focus of the development of the drug will be mainly on breast cancer, where it has demonstrated promising results in early human trials, according to the company. In an earlier deal, announced Sept. 20, Servier partnered with MacroGenics Inc. for an option to develop and commercialize Dual-Affinity Re-Targeting (DART) products from its bi-specific antibody platform directed at three undisclosed tumor targets. Servier paid $20 million upfront for an option to obtain licensing rights in markets outside the U.S., Canada, Mexico, Japan, Korea and India. - Jessica Merrill

Leo Pharma/Charité: The Charité, which started out in the 1700s as a plague hospital for the poor but now incorporates Berlin's university hospitals, one of the largest medical organizations in Europe, is to collaborate with Denmark's mid-sized company, Leo Pharma, to discover and develop new treatment options for patients with skin conditions like psoriasis and actinic keratosis. It’s a bold step for Leo Pharma, which has previously not been particularly active in forging scientific collaborations, and can be viewed as the next move in the company's quest to search for future growth opportunities. The partners will test treatment solutions that no one has explored before, and identify new therapeutic areas within dermatology for Leo Pharma, the company announced Oct. 3. The collaboration is billed as the first of five long-term research relationships that Leo Pharma wants to set up with external partners in four countries – the U.S., Germany, France and Australia - by the end of next year. The research will supplement Leo Pharma's own internal R&D activities.- John Davis

Theravance/Alfa Wassermann: Mid-sized Italian company Alfa Wassermann is continuing to focus its research on all things gastrointestinal by collaborating with San Francisco-based Theravance on the development of that company's Phase II 5HT4-agonist, velusetrag (TD-5108), in gastroparesis. There are few therapeutic options for the disorder, which is characterized by delayed gastric emptying leading to bloating, nausea and vomiting. Velusetrag has already shown significant prokinetic activity after once-daily dosing in 400 patients with chronic idiopathic constipation. Under the agreement, Alfa Wassermann will fund the velusetrag research program in gastroparesis until the end of Phase II, and at that point will have an exclusive option to license the product for further development and commercialization in the EU, Russia, China, Mexico and certain other countries. Theravance will retain full rights to velusetrag for the U.S., Canada, Japan, and certain additional countries. If Alfa Wassermann exercises the option, Theravance will receive a $10 million fee and could receive further development, regulatory and sales milestone payments totalling up to $53.5 million, the two companies announced Oct. 2. Theravance could also receive royalties on net sales ranging from the low teens to 20%. Alfa Wassermann, a private Bologna-based company with revenue of €335 million ($434 million) in 2011, is best known for its gut-selective antibiotic, Xifaxan (rifaximin), which is marketed in more than 30 countries. It also markets a low molecular heparin, Fluxum (parnaparin), and a heparinoid, Vessel (sulodexide), and has ambitions to extend its direct presence in the EU and emerging markets. Theravance markets the injectable antibiotic, Vibativ (telavancin) in the U.S., and is collaborating with GlaxoSmithKline on the development of a combination COPD product which has completed Phase III clinical studies.- J.D.

BioSante/ANI Pharmaceuticals: In perhaps a last-ditch effort to derive value from development-challenged, female sexual-dysfunction drug LibiGel (transdermal testosterone gel), BioSante is undertaking a reverse-merger with specialty branded and generic pharmaceutical company ANI Pharmaceuticals. Each company’s board of directors has approved the proposed all-stock transaction in which ANI shareholders would end up owning 53% of the combined company and BioSante shareholders the remaining 47%. The deal, announced Oct. 4, also includes a contingent value right tied to the potential sale, transfer or licensing of LibiGel that could yield up to $40 million for existing BioSante shareholders. After Phase III trial data were clouded by a higher-than-expected placebo response, BioSante was left to design new pivotal studies for LibiGel, intended to address female hypoactive sexual disorder, that would ameliorate the placebo effect. In July 2011, the Illinois-based firm raised $45.1 million in a follow-on public offering, selling 16 million shares at $3 per share to fund continued development of LibiGel. The new company will be called ANI Pharmaceuticals, Inc., with existing ANI President and CEO Arthur Przybyl at the helm. Przybyl also will hold a seat on the board of directors, along with four current ANI directors and two from BioSante. The new company will seek to out-license LibiGel and put BioSante’s cash toward ANI’s niche branded and generic drug business, which generated net sales of $16 million in 2011. BioSante also brings a pipeline of cancer vaccines being investigated in 17 Phase I and Phase II trials to the new entity, while ANI has a contract manufacturing organization. - Joseph Haas

Flashing back to 5AM? Trippy alarm photo courtesy of loopoboy 2.0.

We're Not the Beast You Thought We Were....

"When people think about Sanofi Aventis, they think about Plavix and about Acomplia. Plavix is going away, and Acomplia never came."

That just about sums up Sanofi Aventis' quandary. And it came not from disgruntled investors but from the group's new CEO, Chris Viehbacher, during the company's full-year results presentation in Paris today. (Which, in a sign of the company's new world-friendly face, was held at 2pm CET, not early morning when the US is asleep.)

Okay, so he was trying to dispel various myths about Sanofi Aventis--including, one gathers, those he himself entertained before joining ten weeks ago (he missed out on the top-job at GlaxoSmithKline).

He went on to say: "But there's a lot more."

The 'more' is: Sanofi's vaccines business, ranked number one (if you include Sanofi Pasteur MSD, a joint venture with Merck), a foothold in generics (read: Zentiva), the most geographically-spread business in the sector (spread about a third each across the US, Europe and RoW; Sanofi claims to be #1 in sales terms in BRIC and Mexico) and a bit of OTC. All of the starting points, in other words, to create a 'diversified health care business'.

Heard that goal before? It was Kindler at Pfizer a couple of weeks ago, justifying spending $68 billion on Wyeth. We don't need to do that, Viehbacher argued; indeed, "Pfizer had to buy Wyeth just to get where we are--a major player in vaccines, with biologics and OTC."

Okay, so maybe he had a point in dispelling what he saw as another myth: that Sanofi Aventis has missed the biologicals boat. "30% of our sales come from biologicals," he told the audience, referring to once-daily insulin Lantus, low molecular weight heparin Lovenox (whose generic exposure is a particular uncertainty for the business) and vaccines. Not necessarily your anti-TNFs or anything like that (and it's not as if Sanofi has been at the forefront of buying new technologies like RNAi either) but large molecules nevertheless.

But Viehbacher wasn't trying to pretend that Sanofi-Aventis is ok, really. It isn't; the company's three years from a patent cliff and doesn't have enough new products. That's why he kept talking about transformation and getting back to growth. And one myth he didn't try to dispel was that Sanofi-Aventis has been inward-looking. "We have not looked outside of our walls enough," he acknowledged. That's about to change (though it won't be mega-mergers): €4 billion in annual cash flow and virtually no debt to finance will help.

We thought Viehbacher did a good job of setting out what he has to work with, and what he wants to do. Here are some other messages that came through (to us, at least) from the flurry of PR and appointments launched concurrently:

1. We’ve learnt from our mistakes.....(that means Acomplia)
2. ... thus our regulatory person is now our CMO (so we won’t get stuck at the authorities again, no way)
3. ... and we keep repeating that "patient safety is of the utmost importance to Sanofi Aventis," just in case you still remember how we tried to foist a CNS-meddling drug on you to help you lose weight (that means Acomplia)
4. To push home that point a bit more still, we've created a Benefit/Risk Assessment Committee which our new CMO will chair
5. Our CFO is becoming our chief strategy officer (CSO) so the future is about spending MONEY on DEALS (but no, we don't plan to buy Regeneron as that would spoil the bloom)
6. We've hired a top-notch scientific advisor in Dr Elias Zerhouni (lauded in the New York Times yesterday) to help us assess what platform technologies and partners we need, tell us how well we're doing (or not), and keep our feet on the ground. (We weren't great at that before.)
7. He'll also help us sort out R&D. (And we'll give our ex-employer a dig by saying the jury's still out on the CEDD structure.)

New CMO Means Business For GSK

No new CEO in our industry has done more to shake up his organization than GlaxoSmithKline's Andrew Witty (except perhaps Severin Schwan of Roche with his bid for Genentech--but that's another story).

Earlier this spring he created high level positions devoted to corporate strategy and emerging markets and the formation of a new $500 million corporate venture fund. Just days after rumors concerning also-ran Chris Viehbacher's departure were confirmed comes news that Witty's lured Ellen Strahlman, MD, away from Pfizer, where she served as VP Licensing and Worldwide Business Development, to the role as GSK's chief medical officer.

As the press release announcing Strahlman's appointment helpfully points out:

"the Chief Medical Officer is the most senior physician leader of the company with primary responsibility for matters of patient safety, general medical governance, ethics and integrity, medical information, and investigation involving human subjects relating to any GSK products in development or on the market."

Which is what makes Strahlman's appointment so interesting. Yes, she's a well respected physician--an ophthalmologist by training. And since she once served as CMO and Global Head of R&D for Bausch and Lomb, so she's no stranger to the duties a CMO title brings with it. But her most recent stint at Pfizer, where she was at least partly responsible for spin-outs and outlicensing, means she comes with a business focus that's atypical of most of the industry's CMOs.

And Strahlman's background is by no means unique in the boardroom at GSK. When you look at who occupies the top spots at this pharma, a number of them have deep biz dev experience. Among them: Russell Greig, head of the new GSK Venture Fund, who was GSK's senior VP of world-wide business development before becoming president of Pharmaceuticals, International; David Redfern, the company's new strategy guru, who has held stints at GSK as SVP Corporate Strategy and Development and SVP of Northern Europe; and Moncef Slaoui, who was SVP world-wide business development for GSK before becoming chairman of the R&D program.

And that leads this IN VIVO Blogger to wonder...With so many top brass at GSK--including now the CMO--trained to look for products outside GSK's own pharm system, what's the importance of internal R&D to GSK?

It's a fair question. GSK has never shied from inking big deals to fill its late stage pipeline drought. In recent months that's meant tie-ups with Valeant for their Phase III anticonvulsant, Actelion for their Phase III insomnia drug, and Cellzome for their Kinobead technology and kinase inhibitor discovery/early development. And in attempt to spur innovation within GSK's walls, Witty announced in July a reorganization of the CEDDs into discovery performance units that will compete for internal financial resources much the way biotech start-ups vie for VC funding.

“Externalising R&D enables GSK to capture scientific diversity and balance expenditure and risk in drug development. In the future, we believe that up to 50% of GSK’s drug discovery could be sourced from outside the company,” Witty said in a press release announcing the new strategic priorities.

No one is suggesting that Witty wants to jettison GSK's internal R&D--at least for now. But the structural changes that have already been announced and this most recent appointment of Strahlman to CMO suggest that more and more business as usual at GSK will also come with an external focus.

Parallel Pharma Universe First Side Effect of CERN Collider

Well, the Large Hadron Collider powered up underneath the border of France and Switzerland today. No black holes yet, folks. But we may have entered a parallel universe.

At about the same time the first particle beam zipped through the 27km circular tunnel, French Big Pharma Sanofi-Aventis confirmed the Reuters reports from yesterday, announcing it had indeed hired ex-GSK exec Chris Viehbacher to replace Gerard Le Fur as CEO. The company's release stated rather simply: "the evolution of the worldwide pharmaceutical sector requires the key players to acutely redefine their strategy." No arguments here.

To be fair, since the French company's takeover of Aventis in 2004 Sanofi has lost a modicum of its Francocentrism. But the idea that an outsider, much less a non-Frenchman (and yes, we're aware of his french cred, but still), would become CEO of the French giant seemed a bit far fetched . At least until they turned on the LHC.

Coincidentally, Sanofi's share boost on the news created nearly enough market cap to pay for the CHF 10 billion particle accelerator.