Deals Of The Week: Hunting For Dengue Fever Drugs Amid Climate Change

                                      Aedes aegypti busily transmitting virus

Dengue fever is on the move. This mosquito-borne viral disease is invading new parts of the world, helped by climate change, urbanization and increased travel. Europe last autumn had its first big outbreak since 1920 on the Portuguese island of Madeira, while in Florida, where Dengue fever was largely eradicated in the 1930s, around 10 cases were reported in August.

With no approved vaccines on the market to fight the virus, this DOTW reporter was heartened to learn that Johnson & Johnson’s Janssen Inc. is joining the hunt for drugs to treat the world's fastest-spreading tropical disease by linking with academic researchers in Belgium and Britain’s Wellcome Trust medical charity.

The tie-up between Janssen and researchers at the University of Leuven, who have received backing from Wellcome, will build on the discovery of a series of chemical compounds that are highly potent in preventing the replication of dengue virus. The compounds, which have yet to be tested in clinical trials, are active against all four types of the virus and have been shown to work in animal tests. Janssen will have the option of an exclusive, worldwide license to progress and commercialize compounds developed through the research program. Financial terms were not disclosed but Janssen will make upfront, milestone and royalty payments to the University of Leuven.

The collaboration, although long-term, reflects confidence in the feasibility of making an effective medicine against Dengue fever, which is sometimes known as tropical flu. Dengue fever is spread by the Aedes aegypti mosquito, which is now found in 150 countries. To put concerns in context: malaria causes more deaths, but it is on the decline and affects fewer than 100 countries, according to the World Health Organization (WHO). Dengue fever, on the other hand, affected only a handful of areas in the 1950s, but is now officially present in more than 125 countries, exposing half the world's population to the disease. The danger is greatest in the developing world, but the disease is also prevalent in the southern U.S. and parts of southern Europe. Aedes mosquitoes are now present in 18 European countries, often arriving via the importation of bamboo and second-hand tires.

No treatment exists for Dengue fever and vaccines are still in the research stage. Hopes for an effective dengue vaccine were set asunder in 2012, when an experimental tetravalent dengue vaccine from Sanofi Pasteur proved less effective than hoped in a mid-stage clinical trial in Thailand, producing only 30% efficacy. More successful, we hope, will be the latest crop of deals of the week, including: - Sten Stovall

Sanofi/Pozen: Sanofi Pasteur’s parent Sanofi has signed a license agreement with Pozen Inc. on the commercialization of Pozen's new-and-improved aspirin therapies, being developed to reduce gastric ulcers in cardiovascular patients. The deal, which could generate more than $35 million for the U.S.-based company, gives Sanofi exclusive U.S. rights to commercialize all of Pozen's combination drugs containing the proton pump inhibitor immediate-release omeprazole and 325 mg or less of enteric-coated aspirin. This refers currently to Pozen's PA8140 and PA32540 tablets.

PA32540/PA8140 layers 40 mg immediate-release omeprazole (Prilosec) around aspirin to provide the cardiac benefits of once-daily aspirin therapy while reducing the risk of aspirin-induced gastric ulcers. PA32540 contains 325 mg aspirin while PA8140 contains 81 mg aspirin.

The Chapel, Hill N.C.-based company has built a business around developing fixed-dose combination drugs, which are sold through its partners GlaxoSmithKline PLC and AstraZeneca PLC. Prozen previously said it planned to go it alone on PA32540 after frustrating relationships with its big pharma partners and disappointing sales of its migraine treatment Treximet (sumatriptan/naproxen) and pain reliever Vimovo (naproxen/esomeprazole). Its latest deal will see Sanofi pay Pozen $15 million up front, with Pozen eligible to receive pre-commercial milestone payments of $20 million and additional payments upon achievement of certain sales milestones. Pozen will also get double-digit tiered royalties on sales of licensed products by Sanofi and its affiliates in the U.S. Sanofi will have responsibility for all sales, marketing, ongoing manufacturing and future development for the licensed PA products in the U.S. Pozen will keep responsibility for obtaining approval of the NDA, after which Pozen will transfer the application to Sanofi. The application was submitted on March 27 and accepted for filing in May by FDA. - S.S.

Otsuka/Astex: While the California biotech wouldn’t reveal how long it’s been on the block, Astex Pharmaceuticals Inc. said it found its highest bidder in Japan’s Otsuka Pharmaceutical Co. Ltd.  The deal, revealed Sept. 4 by a Japanese news organization, has Otsuka paying $8.50 per share for all outstanding shares of Astex, a 48% premium to the company’s 30-day moving average, and above its close of $6.68 on Sept. 3, the day prior to the deal announcement. Otsuka is expected to issue a tender offer within 10 days that will remain open 20 days. The transaction has been approved by the boards of both companies. The deal is expected to close in the fourth quarter.

Otsuka, which is trying to shore up its top-line from the bloodshed it expects when its blockbuster schizophrenia drug Abilify (aripiprazole) goes off patent in 2015, will benefit from the royalties that Astex brings in on its already-marketed leukemia drug Dacogen (decitabine), which another Japanese drugmaker - Eisai Inc. - has worldwide exclusive rights to commercialize. With Eisai required to pay 20% royalties on sales, escalating to a maximum of 30%, Dacogen accounts for about $60 million to $70 million in royalty revenues for Astex annually. Astex also has a fragment-based discovery platform dubbed Pyramid that turns out small-molecule drug candidates with a variety of mechanisms of action, amplifying the effects of existing drugs or resensitizing cancers to their effects - Lisa LaMotta

Ultragenyx/Kyowa Hakko Kirin: Rare disease company Ultragenyx Pharmaceutical Inc. has partnered with Kyowa Hakko Kirin Co. Ltd. to develop and commercialize a treatment for X-linked hypophosphatemia (XLH). This is the first pharma partnership for the high-profile biotech, which raised a $75 million Series B round in late 2012 that included several crossover investors.

At that time, it planned an IPO for the first half of 2014.. The pair will collaborate to develop the candidate, KRN23, for the U.S., Canada and EU with Ultragenyx leading development in the XLH indication and the pair sharing marketing and profits in the U.S. and Canada. KHK will be responsible for the commercialization of KRN23 in the EU. Ultragenyx plans to develop and commercialize KRN23 in Mexico, Central and South America. Financial details of the deal were not disclosed. KRN23 is in a Phase I/II trial in adults with XLH; the partners plan to initiate a pediatric XLH trial in 2014. XLH is a metabolic bone disorder caused by excessive loss of phosphate in the urine leading to severe hypophosphatemia. The resulting inadequate bone mineralization leads to various abnormalities. These patients have low serum phosphate levels due to high levels of FGF23, a hormone that represses the reabsorption of phosphate from the urine. KRN23 is intended to bind to and render FGF23 inactive, leading to an increase in kidney tubular absorption of phosphate and increased serum phosphate levels. This would be the first disease-modifying treatment for XLH, according to the company. The current treatment for XLH is oral phosphate and vitamin D (calcitriol) therapy; patients must be closely monitored and are at risk for various complications. - Stacy Lawrence

Baxter/Coherus: Pfizer Inc. and Amgen Inc.’s blockbuster Enbrel (etanercept) may have won extended patent coverage in the U.S., but at least two biosimilars that could challenge the drug in certain territories are under development. The latest will come from a Sept. 3 partnership between Baxter International Inc. and Redwood City, Calif.-based biosimilar specialist Coherus BioSciences Inc., which will collaborate on development of an etanercept alternative in Europe, Canada, Brazil, and other unspecified locales.  Baxter will pay Coherus $30 million up front, plus up to $216 million in additional payments contingent on clinical development and regulatory milestones, according to the deal terms. It’s not yet clear whether they’ll pursue approval in Enbrel’s largest indication, rheumatoid arthritis, or whether the companies will aim for psoriasis, psoriatic arthritis, ankylosing spondylitis or another autoimmune-related indication.

Enbrel generated $4.2 billion in 2012 sales; Amgen shares co-promote rights to the drug in the U.S. and Canada with Pfizer under a deal that ends Oct. 31, with Amgen taking back all rights. Sandoz is already developing an etanercept biosimilar, although that company is hoping to gain its first approval in psoriasis. That company believes it can challenge Enbrel’s extended exclusivity, including two U.S. patents that expire in 2028 and 2029. Baxter has teamed with Momenta Pharmaceuticals Inc. in a December 2011 deal that is expected to yield between two and six new biosimilars. - Paul Bonanos

Novartis/Regenerex: Novartis AG and Regenerex LLC have inked an exclusive global licensing and research collaboration based on the Kentucky-based biotech’s hematopoietic stem cell-based FCRx platform. Regenerex’s Facilitating Cell Therapy (FCRx ) has shown encouraging results in Phase II trials involving 15 kidney transplant recipients, inducing stable immunological tolerance and graft survival without the need for lifelong immunosuppression.  Currently, solid organ transplant recipients need immunosuppressive drugs for life to prevent rejection. FCRx is an allogeneic hematopoietic stem cell based therapy platform that also contains facilitating cells derived from a donor. The platform supports the development of tolerance, or "bone marrow chimerism," in transplant recipients and the two hope chimerism will eventually render recipients tolerant to cell, tissue or organ transplants from the same donor, enabling transplant patients to discontinue immunosuppressive medications after building stable immunological tolerance. Beyond transplant, the partners will study FCRx’s potential for correcting serious genetic deficiencies such as inherited metabolic storage disorders and hemoglobinopathies, examples being metachromatic leukodystrophy and sickle cell disease. The companies did not provide financial details or timeframe for their collaboration in the Sept. 6 announcement. Novartis did say that the FCRx platform will broaden its current cell therapy portfolio, which includes two novel cell therapy platforms initially being investigated in hematological malignancies. HSC835, currently in a Phase II trial in patients with high-risk hematological malignancies, is a novel cell therapy approach that enables an expanded single umbilical cord blood derived hematopoietic stem cell transplant in patients with limited treatment options. A second cell therapy product, CTL019 is a chimeric antigen receptor T cell therapy currently in Phase II development in acute lymphoblastic leukemia (ALL) and chronic lymphocytic leukemia (CLL). - S.S.

Thrombogenics/Bicycle: ThromboGenics NV has signed its second licensing deal in three months involving novel targets for diabetic eye disease, this time with U.K.-based Bicycle Therapeutics Ltd.  Bicycle's bicyclic peptide technology will be used to identify and optimize bicyclic peptides that inhibit what is believed to be a new target involved in vascular permeability, and ThromboGenics will have exclusive rights to clinically develop and commercialize the products. In return, Bicycle will receive an undisclosed upfront fee, development and regulatory milestones and royalties on sales, and will also collaborate with ThromboGenics on preclinical development. Their licensing pact was announced on Sept. 5. Now that ThromboGenics's lead product, the vitreomacular adhesion product Jetrea (ocriplasmin), has reached the market in the U.S and Europe, the Belgian biotech is casting around for new avenues to explore in ophthalmic diseases. It has nearly €200 million in cash, including milestone payments totaling €90 million from Jetrea's European licensee, Alcon (Novartis), so has the financial muscle to do so. In May, it licensed technology from Cambridge, Mass.-based Eleven Biotherapeutics to develop protein therapeutics aimed at another novel biologic target involved in diabetic macular edema (DME) and diabetic eye diseases. DME is of increasing interest to pharma companies because of its increasing prevalence and the possibility of improving on the current standard of care, lasers or VEGF inhibitor therapy. - John Davis

Santhera/Takeda: Santhera Pharmaceuticals AG of Switzerland reached agreement with Takeda Pharmaceutical Co. Ltd. on Sept. 3 to license back the European rights to its Phase III Duchenne muscular dystrophy (DMD) drug Catena (idebenone), increasing the Swiss company’s commercial flexibility. In return, Takeda gets an undisclosed percentage of future licensing and/or sales income generated by Santhera in DMD. Takeda acquired exclusive marketing rights for the medicine in Europe in 2005. Idebenone is a synthetic short-chain benzoquinone and a cofactor for the enzyme NAD(P)H:quinone oxidoreductase (NQO1) capable of transferring electrons directly onto complex III of the mitochondrial electron transport chain, thereby capable of restoring cellular energy levels.

The drug is in a DMD Phase III study conducted in Europe and the U.S. Santhera also obtained the right to cross-reference Takeda's idebenone data for regulatory use in any indication in any territory. If Santhera makes use of the cross-references, Takeda is eligible to obtain a percentage from future licensing and/or sales income generated by Santhera in such indications. The two companies also ended a 2005 agreement for idebenone’s use treating Friedreich's ataxia. Santhera's €1 million ($1.3 million) contingent liability payable to Takeda under that has been waived, but Takeda is eligible to receive €1 million  as a percentage from future income generated by Santhera to offset this.- S.S.



Photo credit: Wikimedia Commons.

Deals Of The Week Tracks Obamacare

The pharmaceutical community, like much of the country remains divided about the Affordable Care Act and  its impact on healthcare and the industry, perhaps even more so than when the original law passed in 2010. The industry, of course, supported the initial legislation, and many people continue to believe it made the right decision. 

But as deadlines approach for the all-important next phase of the law, execution realities and uncertainty raise questions, many of which can’t be answered in the near term. Nonetheless, they have implications overall for the healthcare system and patients, and, more narrowly, for pharma commercial and business development strategy. This year, in particular, is important for the market access phase of the legislation, as the country prepares to get new health insurance exchanges running by the Jan. 1, 2014 deadline, and states decide whether and how to expand their Medicaid offerings to broader populations. As of Jan. 1, Americans must have individual insurance coverage or pay a penalty (modest at first); they can buy the coverage through insurance plans listed on health insurance exchanges which begin operations on that date. 

Overall, pharma industry support, officially, at least, seems high, even as executives worry whether their companies will ever make up for the tradeoffs they agreed to three years ago in the form of bigger rebates (for Medicaid and other government programs) and taxes through numbers of newly covered lives. They are concerned about less high-profile provisions of the act, such as its dramatic expansion of the 340b program to new categories of hospitals, and a provision that limits reimbursement companies can get for minor improvements to their product, as well as the federal and state governments’ ability to execute their plans on time. 

Many states are just now announcing which insurance companies are participating in the exchanges and those plans are identifying their basic options, but the industry in general does not yet have a good perception of what drug coverage will look like, how the new exchange plans or Medicaid expansion will be populated, or how the mandatory individual insurance provisions will be enforced. 

Because no one really has the answers, many in the industry expect companies to monitor the ACA’s progress closely but continue to operate status quo. They are not so much keeping their heads in the sand as monitoring cautiously,” says an executive at a firm that advises companies on market access issues. “From a tactical perspective, no one knows what will happen, so they are taking the path of least resistance. Top execs are asking me to come up with projections, and I don’t know them, so they are proceeding as though there is no effect.”

The uncertainty hasn’t stopped Wall Street from predicting winners and losers in the healthcare sector in general, or entrepreneurs form seizing opportunity in the midst of change. At the Jefferies investment bank conference on June 4, a panel of experts opined about investor beneficiaries, and all agreed that whatever else, managed care –perhaps by another name—will be the name of the game going forward. Past efforts to move populations into managed care failed, but what’s different now is the government support for such programs, as well as massive databases that able to monitor how the system is performing.

Meanwhile, the industry’s relentless search for innovation continues – if for no other reason than because without it, there’s not much of an industry – witness the struggles of specialty pharma companies such as Elan PLC, Endo Health Solutions, and Forest Laboratories, all laboring to move beyond the enormous success of an innovative drug but finding it hard to come up with a repeat act.--Wendy Diller

MorphoSys/GSK: MorphoSys has struck a development and commercialization deal with GlaxoSmithKline for its mid-stage rheumatoid arthritis antibody, MOR103, which targets the GM-CSF pathway that stimulates production of immune cells such as macrophages. The deal, announced June 3, gives MorphoSys near-term cash in the form of a €22.5 million ($29.5 million) upfront, plus development, regulatory and commercialization milestones that could add up to €425 million. GSK also will pay a double-digit royalty on all sales of the product. MOR103 has completed a Phase I study in healthy individuals, as well as a Phase Ib/IIa trial in 96 patients with mild to moderate rheumatoid arthritis. Patients in the drug arm of the study showed a significant effect compared to placebo at just four weeks. GSK will take over all development, but did not specify when it will begin Phase II studies. MOR103 has also been tested in patients with multiple sclerosis.

MorphoSys has been shifting gears for the last few months as it tries to move away from the partnership model that has made it profitable to concentrate more on its wholly-owned pipeline. MorphoSys has two drugs in its proprietary pipeline: MOR208, a Phase I asset which targets CD19 for B-cell malignancies, and MOR202, a HuCAL antibody against CD38 for multiple myeloma. – Lisa LaMotta

Pfizer/CytomX Therapeutics: After obtaining preclinical proof-of-concept last year for its approach to tumor-specific delivery of specially engineered antibodies, CytomX has struck its first alliance with a big pharma. Under an agreement announced June 6, the company will collaborate with Pfizer to discover and develop a variation on antibody-drug conjugates (ADCs) for cancer. Pfizer will pay the South San Francisco, Calif.-based biotech $25 million in combined upfront cash and milestones pegged to research and preclinical achievements. In addition, privately held CytomX could earn up to $610 million in regulatory and sales milestones, as well as tiered royalties into double digits on sales of any product reaching market. Because of the selectivity of candidates generated via its Probody Platform, CytomX says it can target broadly expressed tissues that are difficult to reach with other therapeutic approaches because of worries about off-target toxicity. CytomX uses its technology to generate ADCs that it calls Probody Drug Conjugates (PDCs), specially engineered antibodies or other approaches to drug delivery for cancer, inflammation and other unmet medical needs. PDCs will be safer and differentiated from other ADCs, CEO Sean McCarthy said, because they are engineered to combine cytotoxic payloads with Probodies that are masked to become activated only in the tumor’s micro-environment. Pfizer and CytomX are not disclosing the indications or specific targets on which they will work together, nor any timelines for the work, other than that it is an exclusive, multi-target alliance focused on oncology. – Joseph Haas

Janssen Biotech/Second Genome: Janssen Biotech and Second Genome Inc. announced a landmark research alliance on May 5th in which the latter will apply its microbiome discovery platform to characterize the role of human bacterial populations in ulcerative colitis. The goal is to translate the knowledge into therapeutic programs. The deal marks big pharma’s first commercial collaboration in microbiome R&D and may stimulate further deals and investment in the space. Interest in the therapeutic potential of the microbiome has been building over the past three years with the founding of several venture-backed companies focused on microbiome biology. Second Genome gets an upfront payment and milestones, both undisclosed. The upfront does not include equity. Janssen will fund the collaborative research through its Johnson & Johnson Innovation Center and the immunology therapeutic area within Janssen R&D LLC. Second Genome has preclinical programs in inflammatory bowel disease and type 2 diabetes, each about a year and a half from IND. It also has several discovery programs. On the same day, the start-up announced a $6.5 million third tranche to its series A financing, bringing the total raised to $11.5 million.—Michael Goodman

The Medicines Co./ ProFibrix: The hospital marketer The Medicines Co. is expanding into the hemostasis market, and has negotiated an option deal with ProFibrix BV that could improve its position there. The company announced June 4 it has agreed to pay $10 million upfront for an option to acquire ProFibrix later this year after Phase III clinical trial results read out on the company’s lead biologic, Fibrocaps. The dry powder topical formulation of fibrinogen and thrombin is being developed to stop bleeding during surgery. If the results of the single Phase III trial testing Fibrocaps are positive, The Medicines Company would pay $90 million to acquire ProFibrix outright. It also would be on the hook to pay $140 million in regulatory and sales milestones. ProFibrix’s ongoing Phase III trial, FINISH-3, has completed enrollment of 719 surgical patients with mild to moderate surgical bleeding, and the results are expected in the third quarter. The Medicines Company already markets the recombinant thrombin Recothrom, to which it recently gained rights through an earlier option arrangement with Bristol-Myers Squibb Co. The Medicines Company plans to combine the 60-person hemostasis group it gained from Bristol with the ProFibrix team. Both are based in Seattle, although ProFibrix’s leadership and headquarters are in The Netherlands. Plans call for CEO Jan Öhrström to stay on with The Medicines Company and head the company’s efforts in the hemostasis market. – Jessica Merrill

Novavax/Isconova: Eager to add adjuvant technology to its clinical and preclinical recombinant vaccine candidates, Novavax is making a $29.2 million bid to buy Swedish firm Isconova. Spun out of the Swedish University of Agricultural Science, Isconova produces saponin-based, immune-modulating adjuvants. In October 2012, Rockville, Md.-based Novavax, which has vaccines in clinical development for seasonal influenza, pandemic influenza, respiratory syncytial virus and rabies, reported successful Phase I data testing its pandemic flu vaccine boosted with a third-party saponin-based adjuvant. In a release, Novavax said based on those data plus Isconova’s own data, it believes the Swedish biotech’s technology can complement and strengthen its vaccine programs. Novavax announced a public offer June 4 under which it would issue 15.45 million new shares of common stock and swap 1.2388 shares of its stock for each Isconova share. The deal would represent a 26.7% premium over Isconova’s share price at the close of trading June 3 and would result in Novavax shareholders owning 91.1% of the new combined company. Isconova shareholders would control the remaining 8.9%. Novavax said if the deal goes through, it will offer Isconova management “positions subject to their commitment to the combined company,” and it does not plan to seek changes regarding the Swedish firm’s headcount, employment terms or business location.--JAH

Arno/Veridex: Cancer-focused Arno Therapeutics signed an agreement June 3 with Veridex, a subsidiary of Johnson & Johnson, to develop a diagnostic test for seeking optimal patients for its oncology candidates. Based in Flemington, N.J., Arno is developing cancer therapeutics that target the PI3 kinase/Akt pathway, as well as HDAC inhibitors and camptothecins. The two firms will team up to use Veridex’s proprietary CELLSEARCH platform to develop a diagnostic to detect the presence of activated progesterone receptors as a biomarker of anti-progestin activity in circulating tumor cells, those that have detached from a solid tumor and are found in the bloodstream. Arno is developing onapristone, an oral, anti-progestin type 1 progestin receptor antagonist. Now in preclinical development, onapristone is slated to begin clinical study during the second half of 2013.--JAH

AstraZeneca/ Rigel: AstraZeneca pulled out of its three-year partnership with Rigel Pharmaceuticals on June 4 after the companies announced lackluster results of the Phase III program for rheumatoid arthritis drug fostamatinib, an oral spleen tyrosine kinase (SYK) inhibitor. The drug did not show the levels of efficacy that many other drugs in the category have in clinical trials, prompting AZ to pull the plug. Rigel intends to evaluate the data from the Phase III program, which AZ conducted, and make a decision by end of the summer regarding its next steps. Rigel executives believe that fostamatinib could still find a place in the crowded RA market, even if the indication is just for a small subset of patients. Rigel potentially will seek approval of the drug on its own, but said it will not commercialize the drug without a partner. 

The failed program is just the most recent in a string of failures for the British pharma, which has ended programs in cardiovascular and oncology as well. It has also faced a slew of setbacks with its diabetes program, partnered with Bristol.--LL