Deals Of The Week: Novartis Places Bid To Dominate In Cancer

While the largest deal of the week, and certainly the one receiving the most attention, has been Actavis' expansion of its branded portfolio via its $25 billion purchase of Forest Laboratories, the deal that could have major implications for a hot target space in cancer is Novartis' pick-up of a small Massachusetts biotech.

Novartis nabbed young start-up CoStim Pharmaceuticals at the beginning of the week for an undisclosed amount – a move that could make it a major force in the red hot area of cancer immunotherapy.

The closely held biotech was founded in 2012 by MPM Capital and led by MPM managing directors Luke Evnin and Robert Millman. Atlas Ventures joined MPM in early 2013 to fund the company’s $10 million Series A round. While terms of the deal were not disclosed, Atlas partner Bruce Booth wrote in a recent blog post that “if the contingent milestones are paid, this deal will return a significant portion of the entire Life Science allocation in Atlas Fund VIII.”

The Swiss pharma knows a thing or two about oncology – it’s been marketing Gleevec (imatinib), one of the earliest targeted cancer treatments and a multi-billion dollar drug annually, since 2003. And it boasts one of the richest oncology pipelines in the industry, spanning numerous solid- and liquid-tumor indications and many of the hottest biological targets. Its latest R&D foray into chimeric antigen receptor technology (CART) – and the programs it’s acquired from CoStim – has enriched the pharma’s immunotherapy platform and upped its commitment to being a dominant player in oncology.

While Novartis has been cagey about revealing what CoStim actually has to offer, Bill Sellers, its global head of oncology, says the Cambridge biotech brings four to five late-stage programs to the table – programs the industry could start hearing about in early 2015.

“One of our strengths is attacking cancer from its genetic base,” said Sellers. “But we have not done a lot of work in immunotherapy until two years ago,” he admitted.

That’s when Novartis inked its deal with the University of Pennsylvania for its CART research. The deal is based on the work of Carl June, whose lab created T-cells that express the receptor CART 19, a synthetic fusion protein consisting of antibodies that attach to the CD-19 protein, commonly expressed in chronic lymphocytic (CLL) and other B-cell mediated leukemias. The genetically engineered T-cells are injected back into the patients, where they find their way to CD-19-expressing leukemia cells and kill them.

Since pairing up with Penn, Novartis has been “building expertise internally,” said Sellers, as well as opening a large-scale manufacturing facility in Morristown, NJ. “CART has shown dramatic efficacy, but it doesn’t work in everybody,” said Sellers. “So there is room to augment that.”

Sellers said Novartis has been looking for a way to get into checkpoint inhibitors and other immunotherapies for a couple of years, knowing it doesn’t have the expertise in-house. That’s where CoStim comes in – one of its late-stage assets targets the PD-1 pathway. The smokin’ hot PD-1 pathway – if you’ve paid any attention to, or even just glanced at, companies like Merck or Bristol-Myers Squibb in recent months, then you’ve heard about their anti-PD-1 drugs. Combination therapies with these checkpoint inhibitors are going to be huge - $35 billion huge, if some analysts are to be trusted.

Merck already is jumping on the combo bandwagon – it’s inked three deals with Pfizer, Incyte and Amgen just this month to combine its anti-PD-1 checkpoint inhibitor MK-3475 with assets in their respective pipelines.

Novartis is employing a different strategy – it’s hoping to move forward with a CART/PD-1 combo. “We are just starting to explore CART in solid tumors, which are thought to be more immunosuppressant,” said Sellers.

CART programs may be just as revolutionary as PD-1. On Feb. 19, Memorial Sloan-Kettering Cancer Center announced results from a trial of adult B cell acute lymphoblastic leukemia that showed 88% of patients achieved complete remission after receiving the modified T-cells. (The technology is the basis for the founding of high-profile start-up Juno Therapeutics, which currently is locked in a patent dispute over the CAR technology with Novartis.)

French biotech Servier also is getting in on the action, as you can read below in ...

Actavis/Forest – Actavis is nearly unrecognizable from the little Icelandic company it was just three years ago. The company has merged with both Warner Chilcott PLC and Watson Pharmaceuticals during that time to become a generics behemoth with multinational presence. Now, it is continuing down the road of transformation with its $25 billion acquisition of Forest Laboratories. The stock-and-cash deal will turn Actavis into a developer of specialty brand name drugs, boosting specialty products to represent about 50% of combined company revenue. North American specialty pharmaceuticals currently comprise about 30% of Actavis’ standalone revenue. Forest shareholders will get $26.04 in cash and a portion of an Actavis share for each Forest share. The total, per-share price of $89.48 represents a premium of about 25% over Forest's closing price on Feb. 14, the last trading day before the deal was announced, of $71.39. For Forest this is an ideal exit for its shareholders; activist investor Carl Icahn has said in news reports that this acquisition is a good example of when activist measures work. Forest CEO Brent Saunders has been touted as having the magic touch – he flipped Forest in less than six months after taking over and was the architect behind the sale of Bausch + Lomb to Valeant Pharmaceuticals for $8.7 billion before that. - Lisa LaMotta

Servier/Cellectis – Servier wants a piece of the CART action; the French biotech inked a collaboration with cell therapy company Cellectis on Feb. 17 for $10 million upfront and $840 million in potential milestones tied to the development, regulatory and commercial success of six potential products. The deal includes the development of UCART19, Cellectis’ lead product, a CD19-targeting compound that is in early stages, but could be a potential rival to Novartis’ lead CART program – which also targets the CD19 T-cells. “These original cell-based therapies will well complement Servier's innovative clinical oncology pipeline, which currently includes immunotherapeutic monoclonal antibodies, an HDAC inhibitor, kinase inhibitors, antiangiogenic and proapoptotic small molecules,” said Jean Pierre Abastado, head of oncology at Servier. The deal initially will focus on leukemias and lymphomas, with Servier having the option to license the products and take over development after Phase I has been completed. - L.L.

Gilead/CURx - Gilead Sciences has had its hands full, what with plotting the domination of the market for all-oral HCV treatment. So busy, in fact, that the biotech has signed only one R&D deal in almost the last two years – a preclinical partnership with antibody company MacroGenics last January, according to the Strategic Transactions database. On Feb. 19, Gilead announced its latest R&D deal, but this time it has flipped the usual script and out-licensed a late-stage candidate for development. It’s calling upon CURx Pharmaceuticals develop non-core asset inhaled fosfomycin/tobramycin to treat Pseudomonas aeruginosa lung infection in cystic fibrosis (CF) patients. The candidate met the primary endpoint in a Phase II trial in 2010 in this indication, but Gilead subsequently discontinued development. There already are two treatments for this indication approved in the U.S.: Gilead’s own Cayston (inhaled aztreonam) and Novartis' Tobi (inhaled tobramycin). In preclinical studies, inhaled fosfomycin/tobramycin has shown activity against several other pathogenic bacteria, including methicillin-resistant Staphylococcus aureus (MRSA). About half of all CF patients become infected with Pseudomonas aeruginosa and about a quarter are infected with MRSA, according to CURx. The financial details of the transaction were not disclosed. - Stacy Lawrence

Pfizer/ MIT’s Synthetic Biology Center - Pfizer and the Massachusetts Institute of Technology are collaborating on the use of novel synthetic biology tools to enhance drug discovery and development. The three-year deal, announced on Feb. 20, covers multiple therapeutic areas at Pfizer and involves several core investigators at MIT’s Synthetic Biology Center, according to the MIT press release. Scientists have different definitions for synthetic biology, but, essentially, it involves integrating current and new biotech tools, systems biology and bioinformatics to enable engineering of new biological parts, in short, making new genetic codes from scratch. The ultimate goal of using such techniques is to make design and construction of novel biological systems into a professional engineering discipline. Synthetic biology as an area of scientific focus has taken off in the past decade, with support from the National Science Foundation, which funded creation of the first synthetic biotech research center, Synberc, in 2006. Participants in Synberc were the University of California at Berkeley and University of California, San Francisco, Stanford University and MIT. Since then, NSF has awarded millions of dollars more to other academic organizations to set up centers of synthetic biology research, including the J. Craig Ventor Institute and New York University. Start-up activity also is climbing, with one of the most visible practitioners, Intrexon, netting $171 million in an initial public offering last year. The ability to use synthetic biology parts as “programmable entities” presents the opportunity to create new biological processes. The partners plan to use cellular genome engineering to support development of next-generation protein expression systems. Pfizer didn’t provide more details, except for comments by Jose Carlos Gutierrez-Ramos, the company’s group  senior VP and head of Biotherapeutics R&D. He noted in a press release that “We are reaching a key inflection point where advances in synthetic biology have the potential to rapidly accelerate and improve biotherapeutic drug discovery and development, from early-stage candidate discovery through product supply.” - Wendy Diller

Photo credit: Wikimedia Commons

Deals of the Week: GSK's Stealth Move To The Coasts

GlaxoSmithKline is following some of its big pharma peers to key innovation hubs in the U.S. by opening satellite R&D centers in San Diego and Cambridge, MA.

When Johnson & Johnson opened its innovation center in Boston earlier this year, the company made a big to-do about the move and announced plans to fund two startups there. Pfizer, meanwhile, announced a significant $100 million investment through a collaboration with local hospitals and academic institutions when it anointed the Boston area the headquarters for its academic deal engine, the Centers for Therapeutic Innovation.

GSK, on the other hand, went in a different direction with its announcement, unveiling the move … via blog post. We couldn’t help but notice the difference in tactics and wonder if GSK’s decision to downplay the announcement reflects its ambitions for the satellite offices.  Whatever the reason, GSK clearly views the expansion as an evolution of its business development strategy, not a seismic shift in the way it approaches R&D.

GSK’s Damien McDevitt, VP Business Development, R&D Therapy Areas, will run the California center. He confirmed details in an interview Dec. 10. "These are both small virtual offices,” he said. “They are not large R&D centers by any stretch of the imagination.” The San Diego office will host about five to 10 scientists and the Boston office will have about 10 to 12, with a heavy emphasis on business development, he said.

"We have always had collaboration activities in these two locations, but what we haven’t had, at least on the West Coast, is a satellite office to be able to work more closely with all the groups we work with, including academia, venture and biotech,” he said. The company’s main U.S. R&D offices are located in Research Triangle Park, NC, and Philadelphia. GSK’s venture group, SR One, has offices in San Francisco and Boston. And its most recent venture effort, Action Potential Venture Capital, is headed by Imran Eba, who recently relocated to Cambridge to open up that shop.

GSK views its California and Boston R&D outposts as bridges to strengthen its existing relationships and forge new ones. A big focus, at least for the West Coast, will be on its partnership with VC firm Avalon Ventures. Earlier this year, the partners announced plans to fund 10 new single-molecule drug companies. Their first biotech, celiac disease drug developer Sitari Pharmaceuticals, was hatched with a $10 million Series A in November.

McDevitt said GSK and Avalon are aiming to establish at least three or four new companies by the end of 2014. But the new R&D centers won’t be solely focused on venture funding opportunities. They will be scouting new partnerships with academia and biotech, while also strengthening ties to existing partners. GSK has collaborations with some 22 West Coast partners, McDevitt pointed out.

GSK will be agnostic about therapy areas when it comes to new projects, and will consider both platform technologies and new products, with an emphasis on preclinical programs. Mostly, he said, the point is “keeping an open mind” and looking for breakthrough science. - Jessica Merrill

Our minds are always open, but we’re here to tell you when the deals are closed. With that in mind, here’s this week’s edition of...

Roche/Prothena: Prothena's new deal with Roche, worth $45 million in upfront payments and near-term clinical milestones and potentially up to $600 million to the biotech in the long run, gives it a major pharma partner that recently cited central nervous system diseases as a core R&D priority. In turn, Roche gets access to a synuclein antibody program that is ready for the clinic and has been guided by scientists who are world-class drug developers. The Dec. 10 deal revolves around PRX002, a Phase I-ready antibody that targets alpha-synuclein, believed to play a role in Parkinson’s and other neurodegenerative diseases. But it also gives the partners opportunities to collaborate on related conditions. Prothena is receiving most of the first tranche of $45 million from Roche up front, but a small portion of that amount will be a milestone payment when Prothena moves the drug into Phase I, an event that it expects will happen in the first half of 2014, said CEO Dale Schenk.  Prothena also has a no-cost option, which it can exercise prior to approval, to co-promote PRX002 in the U.S. Costs, revenues and profits will be divided 70-30 between the partners, with Roche assuming the larger burden and reaping the larger bounty. Prothena has been looking to out-license PRX002 in order to concentrate on some of the compounds it is targeting for diseases in smaller populations. Roche traditionally has been strong in central nervous system diseases, but, as with other parts of its business, it has moved away from large-population conditions treated largely by primary care doctors, such as depression, to more complex CNS disorders, treated by specialists.- Wendy Diller

Biogen Idec/Proteostasis: Already no stranger to Alzheimer’s disease treatments, Biogen Idec has licensed another program showing promise in neurodegenerative diseases including Alzheimer’s and Parkinson’s. In a Dec. 9 deal, the biopharma disclosed a new partnership with Proteostasis Therapeutics to study and develop therapeutics inhibiting the enzyme ubiquitin specific peptidase 14, or Usp14. It’s believed that blocking Usp14 modulates proteasome activity and thereby speeds up degradation of toxic proteins such as alpha-synuclein in Parkinson’s and tau in Alzheimer’s, potentially spelling a disease-modifying approach. The deal includes research funding and potential development and commercial milestones totaling $200 million, as well as tiered royalties. The partners will jointly pay for and conduct preclinical research to identify lead compounds for clinical development. At undisclosed, pre-specified development points, Proteostasis will have the option to receive milestones or exercise an option for global co-development and co-commercialization rights. In addition, Biogen Idec is making an equity investment in Protestasis of undisclosed size. Biogen Idec already has Phase Ib anti-beta amyloid antibody candidate BIIB037, which could be moved directly to Phase III as soon as 2015 if trial data are strong enough, SVP of Neurology Al Sandrock said at Deutsche Bank’s BioFEST Conference in early December.  Cambridge, MA-based, privately held Proteostasis is backed by HealthCare Ventures, Fidelity Biosciences, New Enterprise Associates, Novartis Option Fund and Genzyme Ventures. - Stacy Lawrence

Retrophin/Kyalin/Novartis: Retrophin is making good on its plan to expand beyond its initial focus on ultra-rare diseases. On Dec. 12, it announced an agreement to acquire San Diego-based Kyalin Biosciences for an undisclosed sum. Kyalin’s lead asset carbetocin, a synthetic, nasally administered formulation of the hormone oxytocin, is in Phase I for symptoms of autism. On the same day, Retrophin made good on an August announcement that it would license in a drug to treat autism and schizophrenia from an unnamed major pharmaceutical company. The mystery licensor is Novartis, and the asset is Syntocinon (oxytocin), another synthetic, nasally delivered form of the same drug. Retrophin paid $5 million upfront plus undisclosed milestones and royalties for an exclusive U.S. license. Novartis had marketed the drug in the U.S. to assist with initial postpartum milk ejection, but discontinued it in 1997 for commercial reasons. The proceeds from a $25 million PIPE financing in August helped pay for the transactions. The licensing of Syntocinon also gives Retrophin a market-ready prescription treatment addressing a lactation deficiency for which there are no current therapies. Retrophin plans to re-launch it for that indication in the second quarter of 2014, providing an immediate, if likely small, revenue stream. As for the decision to double down on oxytocin, CEO Martin Shkreli said while Syntocinon is FDA approved, carbetocin is far behind in the clinic. “It might never be approved,” he said, “but it has superior qualities [to Syntocinon]. For instance, it’s longer-acting. So, there is a rationale to replace one with the other over time.” He added that there is a considerable amount of applied research and clinical experience behind the use of oxytocin in autism and schizophrenia. - Michael Goodman

GlaxoSmithKline/Inserm Transfert: Continuing a busy year of collaborations, the French National Institute for Health (INSERM) signed a worldwide licensing agreement Dec. 11 with GlaxoSmithKline to investigate the use of immune-checkpoint molecules in cancer treatment. GSK will pay Inserm Transfert, the tech-transfer subsidiary of INSERM, an undisclosed upfront fee with the possibility of development milestones and sales royalties. The pharma gets rights to develop and commercialize monoclonal antibodies that modulate the inducible T-cell costimulator (ICOS) protein, which offers the potential to enhance anti-tumor immune response. The agreement is part of a larger, long-term strategic alliance between INSERM and GSK. The collaboration “is making progress and illustrates a shared vision by GSK and Inserm Transfert that successful development of new drugs requires proactive action and alignment from both sides,” Inserm Transfert Executive VP, Head of Business Unit Open Innovation Augustin Godard said in a release. - Joseph Haas

Crealta/Savient: Start-up Crealta Pharmaceuticals will buy the gout drug Krystexxa (pegloticase) and other assets of troubled Savient Pharmaceuticals following an auction in bankruptcy court, the firms announced Dec. 11. Crealta will pay $120.4 million for the assets, marking its first significant investment toward becoming a specialty pharmaceutical company. Private-equity firm GTCR formed Crealta in August in partnership with Crealta’s CEO, Ed Fiorentino, and said it would invest up to $200 million to support the company. It’s the second company launched by Fiorentino and the PE firm. The two established Actient Holdings LLC in March 2009 and developed it into a diversified specialty pharmaceutical company through a series of five acquisitions, with GTCR providing a similar initial $200 million investment. Urology specialist Auxilium Pharmaceuticals acquired Actient earlier this year for $585 million upfront plus contingency payments. Now GTCR appears to be following a similar playbook in hopes of another successful exit, though turning around Krystexxa will take some effort. The drug was approved in 2009, but never achieved its perceived potential, challenged by Savient’s poor commercial planning and a market dominated by low-cost generic allopurinol. Savient never regained its footing after failing to sign a marketing partner for Krystexxa, and despite several leadership changes and a cost-reduction program, sales of the drug never led Savient into the black.- J.M.

Thanks to Flickr user ah zut for the lovely shot of one of our favorite coastlines, reproduced under Creative Commons license.

Deals of the Week Gets Disruptive

One needs to look no further than today’s pharma industry to prove that “necessity is the mother of invention.” Acute challenges swamping the sector are forcing previously insular players to abandon their silo thinking and engage customers, employees, payers, providers, and even suppliers and competitors to make strategic leaps.

That seemingly inevitable evolution was the theme at the 5th INSEAD Healthcare Alumni Summit held in late October in Zurich, Switzerland. Participants discussed these kinds of disruptive collaborations, examining how co-operation can help overcome insularity in health care, and what structural and cultural factors characterize successful collaborations.

A keynote interview session put two pharma CEOs on the spot: to sustain healthy businesses, what approaches and deal-making strategies were they considering today that were unavailable or unappealing to them only a decade ago?

Roberto Gradnik, CEO of Stallergenes SA, is attempting to launch his France-based company – which develops treatments for allergy-related respiratory diseases – out of its regional European orbit and take it global. The group currently devotes around 20% of its annual gross sales – which in 2012 totaled €240 million ($323 million) – to R&D, a large proportion for a company Stallergenes’ size.

Gradnik told the INSEAD conference that it’s crucial to change a small-to-mid-sized company’s mindset to be successful at expansion – a process that’s clearly disruptive and necessitates big change on the inside and often demands untried approaches. “Sure, if I don’t go down this path then I would avoid a cultural clash – but I would also not be able to build a successful company,” he told the conference. “At the same time, we need to find new commercial and development models, and be increasingly creative in our partnering ideas,” he added.

Riccardo Braglia heads his family’s Swiss drug and device business, Helsinn Group, which began life in his grandfather’s garage in the late 1940s but today operates in 90 countries with 63 partners using a core business model of what he terms “integrated in-licensing” of late-stage pharmaceutical compounds, medical devices and nutritional supplement products. He told the conference that Helsinn’s business model is based on three pillars: in-licensing, developing products and obtaining marketing authorization on international markets, and out-licensing products through a network of partners worldwide. Its main business areas are cancer supportive care, pain and inflammation, and gastroenterology.

Braglia, who has been at the helm of Helsinn for a decade, recounted a recent cultural challenge he faced when Helsinn took over U.S. biotech Sapphire Therapeutics in 2009, to expand the group’s pipeline in therapeutic areas, notably in cancer care, and give it a foothold in the U.S. But the takeover quickly presented problems that he hadn’t foreseen and which took him more than two years to put right.

“We figured, ‘well, they speak English there so what’s the problem?’ But oh boy, it was a nightmare to implement our culture, that of a family-business, our strategy, our products, and reconciling their biotech culture within the pharma industry. It was really tough, partly because I didn’t want to have any expats running the show there, because I always want to work with local people, because the culture of a country is very important. So what I did was spend half of every month in the United States to make it work – and it eventually did.”

Braglia said his integrated in-licensing business model means his company is essentially a virtual corporate entity with limited infrastructure. “It also means that half of my 500 employees are not in the office but rather in airplanes on business trips.” He said that in the last decade, Helsinn was focused increasingly on licensing alliances, manufacturing alliances, scientific alliances and commercial alliances. An example is an injectable manufacturing joint venture using a plant owned by Pierre Fabre Group of France but paid for by Helsinn.

Gradnik’s company has just secured a U.S. partner – Greer Laboratories Inc. – for its key grass allergy vaccine Oralair, which he hopes to launch there in early 2014, pending FDA approval. Under the deal, announced Oct. 31, Greer will lead the sales and marketing of Oralair, a grass pollen sublingual immunotherapy tablet that includes five grasses -- sweet vernal grass, orchard grass, perennial rye grass, timothy grass, and Kentucky bluegrass -- while Stallergenes will be responsible for manufacturing and supply. Stallergenes will receive regulatory and commercial milestone payments totaling up to $120 million, plus royalties. Oralair will be reviewed by FDA’s Allergenic Products Advisory Committee Dec. 11.

Both Braglia and Gradnik said CEOs of small to mid-sized biopharma companies need to be involved in such collaborations.

“I need to know that the other CEO shares the same philosophy and vision,” Helsinn’s Braglia said.

Gradnik said it should also be the chief executive’s role to know when collaboration has gone sour and take remedial action. “It’s best to cut your losses and end it. I have one like that currently going but will refrain from saying who that’s with,” Stallergenes’ CEO told the conference.

Perhaps a topic for a future “No Deal of the Week.” Until then, enjoy our takes on the not-yet-sour ...

Helsinn/Chugai: In its latest partnership, Helsinn has chosen Chugai Pharmaceutical Co.'s U.K.-based European marketing subsidiary to help sell its ghrelin receptor agonist anamorelin in Europe.
Under the deal announced on Nov. 12, Chugai will get rights in certain major European markets to commercialize the oral drug for anorexia-cachexia syndrome related to advanced non-small lung cancer. Financial details were not disclosed. The pact follows Helsinn's agreement in January with Mexican pharmaceuticals company Especificos Stendhal SA de CV for anamorelin's development in selected Latin American markets. Anamorelin is a first-in-class, once-daily drug previously studied in around 500 patients, including four completed Phase II trials. It is currently being tested in two Phase III studies, ROMANA 1 and ROMANA 2, for the treatment of anorexia-cachexia syndrome in patients with advanced NSCLC.
Chugai will distribute and commercialize the product in Germany, France, the U.K., Ireland, Belgium, the Netherlands and Luxembourg. Chugai's European subsidiary already has direct operations in the U.K., France and Germany, marketing products there from Chugai or Swiss parent Roche. Helsinn retains responsibility for all product development activities including clinical trials and regulatory affairs and will supply the drug to Chugai, which will carry out all work related to commercialization. Phase II results of the drug presented to this year's European Cancer Congress in Amsterdam showed a significant rise in body weight from baseline in patients receiving the medicine compared with placebo, and a favorable overall safety/tolerability profile. Cancer-associated anorexia-cachexia is a muscle wasting and weight loss condition that occurs in around a third to half of cancer sufferers. There are as yet no approved therapies for the condition. Ghrelin, also known as the "hunger hormone", is secreted by the stomach and is targeted by anamorelin to stimulate multiple pathways involved in regulating body weight, appetite and metabolism. -- Sten Stovall

Roche/immatics: People have begun to sit up and take notice of immatics biotechnologies GMBH after the company announced on Nov. 13 a cancer vaccine collaboration with Roche that could lead to the German immunotherapeutics biotech receiving research and milestone payments of up to $1 billion, in addition to a relatively modest up-front payment of $17 million. The high “biobucks” figure takes into account the multiple products and indications likely to be explored in the collaboration, the second announced by Roche in the immunotherapy field in the past two months. Immatics, a Tubingen-based firm with strong backing from local German entrepreneurs and VCs, has developed a technology, XPRESIDENT, to identify cancer antigens recognized by T lymphocytes, and has a tumor-associated peptide (TUMAP)-based cancer vaccine targeting renal cell carcinoma, IMA910, already in a Phase III study. Roche is keen to evaluate preclinical TUMAP vaccines alone and combined with checkpoint inhibitors and other modulators of the immune response, specifically in the areas of gastric, prostate and non-small cell lung cancer. Immatics' Phase I-ready gastric cancer vaccine candidate, IMA942, is the most advanced product covered by the agreement, and Roche will be responsible for clinical development and commercialization of this and other immunotherapies generated in the research collaboration.-- John Davis

Oncodesign/UCB: French drug discovery and pharmacology services firm Oncodesign SA is to collaborate with European mid-sized biopharma UCB SA on identifying selective kinase inhibitors with potential in the treatment of neurodegenerative diseases, in a deal announced Nov. 13. Oncodesign’s Nanocyclix technology generates potent and highly selective kinase inhibitors based on macrocyclization of small molecules, and the two companies will collaborate on identifying such inhibitors that cross the blood-brain barrier and interact with a UCB-selected kinase target. UCB will have an exclusive option to license the joint program, with worldwide development and commercialization rights, upon successfully reaching certain discovery milestones. Oncodesign will, in turn, get research funding, and upon exercise of the license option, research, regulatory and commercial milestones involving the development of molecules in two or more indications, and tiered royalties on net sales. Dijon-based Oncodesign was set up in 1995 and has previously forged collaborations with several other pharmaceutical companies including Sanofi and Ipsen to apply its drug discovery technology in various therapeutic areas, including tissue repair and Parkinson’s. -- John Davis

Novartis/Immunogen: ImmunoGen Inc. announced on Nov. 11 that Novartis AG has taken its third license to use the biotech’s antibody-drug conjugate technology on an undisclosed cancer target. It is the fifth license around Immunogen’s ADC targeted antibody payload (TAP) technology this year by a major drug company.
The Novartis license dates back to a 2010 deal in which the Swiss Pharma licensed exclusive rights to use Immunogen’s TAP technology to develop antibodies against a predetermined number of oncology targets.
For each license, Immunogen receives an up-front payment and is entitled to receive milestone payments potentially totaling some $200 million plus royalties on the sales of any resulting products. Novartis is responsible for the development, manufacturing and marketing of any products resulting from the license. Immunogen’s pipeline consists of four wholly owned ADC programs and eight partnered ADCs in 10 different cancer indications. The best known partnered ADC is Roche’s Kadcyla (ado-trastuzumab emtansine), which was approved by FDA in February as a second-line option after Herceptin (trastuzumab) and a taxane, but labeling left a window for broader use in some first-line patients. A safety signal in a Phase II trial of the biotech’s lead asset, IMGN901 for NSCLC, was disclosed last April, followed by its discontinuation on Nov. 5 on the recommendation of the trial's independent Data Monitoring Committee. -- Mike Goodman

Merck KGaA/BeiGene: Big pharma is increasingly in-licensing compounds from Chinese companies, and the biopharma arm of Merck KGAA, Merck Serono SA, inked a second global licensing, co-development and commercialization deal with BeiGene (Beijing) Co. Ltd. for oncology compound BeiGene-290.
BeiGene-290 is in preclinical development and is expected to enter the clinic in 2014. Under terms of the agreement, announced Nov. 13, BeiGene will be responsible for developing and commercializing the poly (ADP-ribose) polymerase (PARP) inhibitor in China first and Merck will be responsible for the development and commercialization of the compound for the rest of the world. In return, BeiGene will receive an undisclosed up-front payment and is eligible to receive further payments of up to €170 million ($232 million) for clinical development milestones and potential commercial milestones in both China and globally, as well as royalties on net sales. Specific indications for the oncology compound were not disclosed. Both deals, while global, have been structured to ensure BeiGene leads development in China, which should enable the companies to take advantage of regulatory consultations with China FDA as part of the agency’s accelerated approval pathway. The new agreement signals a milestone for biotech innovation in China, said BeiGene Co-founder Xiaodong Wang during the signing ceremony in Beijing. Wang is also the director and architect of China’s National Institute of Biological Science. -- Brian Yang

Shire/ViroPharma: The big M&A news this week was London-listed Shire PLC’s agreed takeover of ViroPharma Inc. for an eye-watering price of $4.2 billion cash, which would give the Ireland-based specialty drug maker access to the U.S. target’s C1 esterase inhibitor Cinryze for treating Hereditary Angioedema, a genetic immune disorder. The proposed acquisition may attract anti-competition resistance from regulators, given Shire’s possession of HAE treatment Firazyr (icatibant injection), but the acquirer says it is confident that these two products are in two different marketplaces. If allowed to proceed, Shire expects the marriage to generate annual cost synergies of around $150 million by 2015, over and above the improved operating leverage already being driven by the ongoing One Shire reorganization.-- STS

Cell Therapeutics/Baxter International: Beleaguered oncology company Cell Therapeutics Inc. has inked a deal for its Phase III mylefibrosis asset pacritinib that it sees as a vote of confidence. CTI announced Nov. 15 that it has signed an agreement with Baxter International Inc. for full commercialization rights outside the U.S., as well as joint commercialization rights in the U.S. The $60 million up-front payment will include a $30 million equity investment in the Seattle-based biotech company, which may also receive clinical and regulatory milestones up to $112 million, including $40 million in clinical milestones that are expected in 2014 and another $27 million expected in 2015. Baxter will handle 75% of costs through submission. CTI acquired pacritinib, an oral tyrosine kinase inhibitor that acts on the JAK2 and FLT3 pathways, in April 2012 from Asia’s SBIO Pte. Ltd. CTI paid $30 million upfront and is on the hook for a total of $132 million in regulatory and sales milestones. Prior to CTI getting the rights to pacritinib, the drug was licensed to Onyx Pharmaceuticals Inc., which opted not to development it in 2011. Pacritinib is CTI’s latest hope after two late-stage pipeline failures – first FDA shot-down non-Hodgkin’s lymphoma treatment Pixuvri (pixantrone), followed by a clinical hold for the blood cancer drug tosedostat. -- Lisa LaMotta

Deals of the Week Looks At How Amgen’s Global Expansion Affects Partnering

why yes, these are Japanese flip-flops, why do you ask?

Amgen Inc. has made a big deal about expanding into Japan and eventually building a standalone subsidiary there. Now, the biotech’s Japanese expansion strategy is paying off for at least one of its partners: Cytokinetics Inc.

The two companies announced June 12 that they have expanded an existing collaboration for the heart failure drug omecamtiv mecarbil and other related compounds to include Japan. Cytokinetics will receive $25 million from Amgen in the form of a $15 million upfront fee and a $10 million stock purchase, sold at a 36% premium. The company is also eligible to receive up to $50 million in pre-commercialization milestone payments for the development of omecamtiv in Japan, as well as royalties on sales of the drug in the country. Amgen will also reimburse Cytokinetics for the cost of a Phase I study that will support the inclusion of Japanese patients in a potential Phase III program for the drug.

For investors, the deal represented a vote of confidence in omecamtiv, and Cytokinetics stock opened June 12 up 15% over the prior day’s closing price. The $25 million in cash is also important to Cytokinetics, which ended the first quarter of 2013 with $61.6 million.

Omecamtiv, a novel cardiac myosin activator, is one of Cytokinetics’ two lead programs. A Phase IIb trial evaluating an intravenous form of the drug in acute heart failure patients has completed enrollment, and a Phase II trial evaluating an oral formulation in outpatients with heart failure started in the first quarter. Amgen is conducting the trials.

Under the original 2006 collaboration, which excluded Japan, Amgen paid Cytokinetics $42 million upfront and paid $33 million to buy stock in exchange for an option to license omecamtiv. Amgen exercised that option in 2009 after positive Phase IIa data read out, and paid Cytokinetics another $50 million upfront and agreed to pay $600 million in milestones.

It looks as though the Cytokinetics deal expansion may be a one-off case, however. A review of Elsevier’s Strategic Transactions database revealed Amgen doesn’t have many other licenses that specifically exclude Japan. One example is KAI Pharmaceuticals Inc., which Amgen acquired in 2012 for $315 million. That acquisition excluded Japan, where Ono Pharmaceutical Co. Ltd. had previously bought the license.

But Japan remains the world’s second largest pharma market, and Amgen’s efforts to rebuild in the region could help future partners, both in terms of deal value and in that signing a single global partner can sometimes speed up the drug development process. Amgen announced plans earlier this year to aggressively expand in Japan and build a Japanese subsidiary by 2020. That reversal comes only five years after the company left the market in 2008, when it out-licensed 13 compounds to Takeda Pharmaceutical Co. Ltd. for $200 million upfront and $702 million in R&D funding and milestones. As part of that deal, Takeda acquired Amgen’s Japanese subsidiary Amgen KK for an undisclosed price.

In May, Amgen unveiled more details about how it will execute on its re-entry plan, namely through a partnership with Astellas Pharma Inc. with which it will form a joint venture to bring Amgen products to market in Japan. The Tokyo-based JV will be 51% owned by Amgen and 49% owned by Astellas and operate as Amgen Astellas BioPharma KK. The deal is structured to allow Amgen to turn the operations into a wholly-owned Japanese affiliate as early as 2020.

Amgen declined to provide any valuable insights on what might be next in terms of partnering in the region. But one thing is certain, we can expect more. CFO Jonathan Peacock specifically commented on Japan and China during the Goldman Sachs Global Healthcare conference June 11. “We’ll continue to branch out and make targeted investments in the markets that are important to our future growth,” he said. -- Jessica Merrill

We could never decline to provide you more valuable insights -- how could we when it's time for ...

AstraZeneca/Pearl Therapeutics: British pharma AstraZeneca PLC has made a big play in respiratory disease with the $1.15 billion acquisition of Pearl Therapeutics Inc. AstraZeneca will pay $560 million upfront, as well as $450 million in development and regulatory milestones related to early-stage pipeline assets to acquire all shares of privately-held Pearl. Pearl shareholders are also eligible to receive $140 million in milestones related to sales of its lead pipeline candidate. The deal puts AstraZeneca in the midst of the fiercely competitive and changing treatment space for chronic obstructive pulmonary disease. The company gains PT003, a fixed-dose combination of glycopyrrolate, a long-acting muscarinic antagonist (LAMA), and formoterol, a long-acting beta-2-agonist (LABA), in Phase III development. It also gets an earlier-stage triple combination that includes a LAMA, LABA and inhaled corticosteroid (ICS). The drug is only in preclinical development, but AstraZeneca plans to move it into Phase II testing immediately. Triple combinations are expected to eventually play a major role in the market. Respiratory disease is one of three key therapeutic areas AstraZeneca is focusing on as part of its turnaround strategy, and the company has increased the pace of development of several projects. The acquisition of Pearl comes just a week after AstraZeneca announced it was pulling out of one of its other late-stage programs with partner Rigel Pharmaceuticals Inc. after the Phase III rheumatoid arthritis drug fostamatinib produced disappointing results. --Lisa LaMotta

Xenon/Isis: In a reversal of its usual out-licensing strategy, Xenon Pharmaceuticals Inc. has exercised an option to in-license a potential treatment for anemia developed under a 2010 alliance with RNA technology specialist Isis Pharmaceuticals Inc. The firms announced June 10 that Xenon will pay $2 million to Isis to license XEN701, a molecule in preclinical development that is designed to inhibit the production of hepcidin, a protein produced in the liver. By inhibiting hepcidin, XEN701 could offer a non-erythropoietin receptor-based mechanism for the treatment of anemia. It is the first drug to enter development from Isis’ collaboration with Xenon. Under the original deal, Xenon paid Isis an undisclosed fee in the form of a convertible promissory note in exchange for using the latter’s antisense technology to discover and develop drugs against hepcidin and hemojuvelin for anemia. Xenon also gained an option to license worldwide development and commercialization rights to candidates produced from the partnership. Isis also is eligible for milestones and royalties. Vancouver-based Xenon has been more active out-licensing its human clinical genetics platform out to larger pharma partners, including Merck & Co. Inc., Teva Pharmaceutical Industries Ltd. and Roche. --JM

Questcor/Novartis: Questcor Pharmaceuticals Inc. announced June 11 that it has acquired rights to develop Synacthen (tetracosactide) and Synacthen Depot from Novartis AG in the U.S. and plans to acquire rights in certain other countries subject to closing conditions. The deal is another example of big pharma’s increased willingness to sell-off non-priority assets, and Questcor appears intent on breathing new life into a mature brand, similar to how it has revitalized its existing Athcar Gel (repository corticotropin injection). The Synacthen products are already approved in 40 countries for certain autoimmune and inflammatory conditions, including rheumatoid arthritis and multiple sclerosis, and are also approved as a diagnostic test for adrenal insufficiency, but they have never been approved in the U.S. Questcor plans to develop the products for the U.S. market and use the drugs as an opportunity to build an international presence. Synacthen is a synthetic 24 amino acid melanocortin receptor agonist, an area of research Questcor specializes in with Athcar. Questcor has successfully built Athcar into a high-growth brand with sales of more than $500 million in 2012 by broadening its use from a niche indication in infantile spasm to larger patient populations like multiple sclerosis and nephrotic syndrome. But the company has also drawn criticism from insurers and some in the health care community for aggressively raising the price from $2,000 per vial to $28,000 per vial as part of its repositioning of the drug to fit in the rare disease business model. --JM

AstraZeneca/Cancer Research UK: Building on existing collaborations with Cancer Research UK, AstraZeneca is providing scientists funded by the world’s biggest cancer charity with compounds for use in developing potential new oncology drugs. One new project, announced June 14, will involve scientists at the University of Manchester testing compounds targeting a key protein involved in DNA damage response. AstraZeneca has first rights to any molecules discovered through the agreement and can choose to continue further development. In return, Cancer Research Technology Ltd, the UK charity’s commercial arm, will receive royalty payments when the project reaches certain milestones. CRT also has the option to develop the molecules further if AstraZeneca decides to pass. Britain’s second-biggest drug maker has also invited Cancer Research UK scientists from the Paterson Institute to test AstraZeneca’s compound collection against a potential oncology target at its UK research center in Alderley Park. It is the first time AstraZeneca has invited an external party to screen such an extensive set of compounds within its screening facility. AstraZeneca will have first rights of negotiation on any resulting projects. CRT has a growing, 90-strong in-house drug discovery effort which has expanded with the help of funding from Cancer Research UK – and has access to clinical development capabilities in conjunction with Cancer Research UK's drug development office. This includes CRUK’s Clinical Development Partnerships initiative, designed to move de-prioritized pharma assets into the clinic. This wide-ranging R&D capability and close linkage with academia has attracted in AstraZeneca to CRT, with the two first partnering in 2010 [W#201020370]. --Sten Stovall

BioLineRx/Jiangsu Chia-Tai Tianging Pharmaceutical: Israeli biotech BioLineRx Ltd. lined up a rare early-stage out-licensing partner for one of its two candidates for hepatitis C this week. Liver disease-focused Jiangsu Chia-Tai Tianqing Pharmaceutical (CTTQ) licensed development, manufacturing and commercial rights in China and Hong Kong to BL-8030, a preclinical second-generation protease inhibitor for HCV. BioLineRx receives an undisclosed upfront payment plus potential development, regulatory and commercialization milestones that could total $30 million for the compound. The Israeli company also could earn high-single-digit royalties on sales if ‘8030 reaches market. BioLineRx also will have access to CTTQ’s clinical data for the compound and can use the data for regulatory purposes outside the territories licensed by the Chinese firm. BL-8030 is one of two HCV candidates being developed by BioLineRx, along with Phase I/II BL-8020, an inhibitor of HCV-induced autophagy. Both compounds were in-licensed from France’s GenoScience Pharma in early 2012[W#201220060]. In a release, CTTQ President Jian Sun Emba noted that HCV prevalence is high in China, with about 3.2% of the population, or roughly 43 million individuals, infected with the virus. –-Joseph Haas

BMS/Simcere: In their third deal in three years, Bristol-Myers Squibb Co. and Simcere Pharmaceutical Group will collaborate in China to co-develop and commercialize a subcutaneous formulation of Bristol’s rheumatoid arthritis treatment Orencia (abatacept), the companies announced June 14. Simcere, based in Nanjing, will perform and fund all development and regulatory activities required to obtain marketing approval in China based on a pre-agreed development plan. The companies will share responsibility for commercializing Orencia SC in China, and will share profits and losses related to Orencia SC there. Financial terms were not disclosed. If approved, Orencia would become Bristol’s first biologic to enter the Chinese market. The novel T-cell co-stimulation modulator is approved already in the U.S., Europe and Japan, and booked global sales of $1.2 billion in 2012. It would theoretically launch into a very competitive RA market in China, which includes novel biologics, biosimilars, and is dominated by NSAIDs. Although Simcere would not comment on development timelines for China, the company confirmed to PharmAsia News that it would need to conduct certain clinical studies in China to obtain regulatory approval for Orencia. BMS and Simcere first tied up in 2010 to co-develop BMS-817378, a small molecule c-Met inhibitor in preclinical development. Under that deal, Simcere is funding and taking the lead for clinical trials in China through proof-of-concept in return for exclusive China marketing rights for the oncologic, while BMS retains marketing rights in the rest of world. In a second deal, announced in 2011, BMS and Simcere are co-developing a preclinical CETP (cholesteryl ester transfer protein) inhibitor, BMS-795311, in China. --Josh Berlin

photo from flickrer nb360 used under creative commons license

Financings of the Fortnight Waits For Public Investors To Hop On Bluebird

It’s been another IPO-intensive couple of weeks here at FOTF HQ. We keep looking for other things to write about, but sometimes the fastest shave on deadline is with Occam’s razor. Or something like that. We didn't exactly ace our philosophy classes in college.

You don’t have to be the sharpest tool in the shed to notice how life-science IPOs have re-inserted themselves into the daily chatter this year, and there’s one upcoming issue that makes for fascinating conversation: bluebird bio, a big-idea company (gene therapy for rare diseases) that apparently strives to avoid capital letters. The firm later this year expects to enter a Phase II/III study with its lead program Lenti-D to treat young boys with the rare hereditary disorder childhood cerebral adrenoleukodystrophy, or CCALD. Also this year, bluebird should launch a Phase I/II trial for another gene transfer product, LentiGlobin, to treat ß-thalassemia major and sickle cell disease.

A bell-ringing IPO would be notable for at least three reasons. First, if someone told you five years ago that public investors would one day line up to buy shares in a gene therapy company, you probably would have had that person tested for the stark-raving-mad gene. But this decade the field has enjoyed quite a turn-around, as our Start-Up colleagues explained last summer. A large step in that journey came a couple of months later, when the European Union approved uniQure's Glybera despite a spotty track record.

Perhaps true optimists would say they never doubted that gene therapy, like so many biomedical technologies, would take more than two decades to find its way into commercial products. But a lot of other biomedical technologies aren't effectively shut down for years because of daunting safety concerns. Glybera’s approval was one kind of validation of gene therapy; a bluebird IPO would be another.

In a sense, though, public investor validation happened nearly a year ago, before the Glybera approval, when bluebird raised its $60 million Series D. The round included its previous VC backers, but new to the company’s cap table were hedge funds, so-called “crossovers” that have made their presence felt in biotech the past few years. The idea is that public investors with biotech savvy want a foothold in an elite circle of privately held firms so they’re in position to benefit from a boffo takeout offer or from an inside seat at IPO. Once in, as with bluebird’s D round, liquidity is probably no more than a couple years away. The crossovers bring much-needed cash to a mezzanine round, but they also bring a certain amount of impatience.

So when bluebird said Deerfield Capital, RA Capital Management, Ramius Capital Group and two undisclosed public funds pitched into last year Series D, it was pretty clear where the firm’s sights were set. Those undisclosed public funds are likely affiliated with Fidelity and The Capital Group, both of which are listed in bluebird’s S-1 as having invested for the first time in the Series D, and which own about 12% and 9% pre-IPO respectively. We don’t know yet how much bluebird is aiming for, but the firm has raised north of $100 million since a 2004 recapitalization. (It was known as Genetix Pharmaceuticals until 2010.)

Raj Shah, partner at RA Capital Management, one of bluebird's "crossovers," told FOTF that his firm had been waiting for a gene therapy company to produce good animal data. When bluebird showed its two lead programs were “unequivocally active” in humans, RA jumped in and is prepared to increase its position at the IPO. “We want exposure to the best technologies in this space,” said Shah. The EU approval of Glybera was encouraging, said Shah, but “FDA's recent IND acceptances of bluebird’s programs are also quite validating for the gene therapy space.”

It’s not the same as approval, of course – no gene therapy product has made it to market in the US – but it’s a significant point and speaks to the company’s approach of using a method that has elements familiar to regulators. The company extracts the patient’s own hematopoetic stem cells, makes the genetic modification ex-vivo, and transfuses the modified cells back into the patient.

The third reason to take note of bluebird is its largest owner, Third Rock Ventures, which appears in this column as often as a Kardashian on the New York Post’s Page Six. Third Rock owns 28.1% of bluebird, double the stake of the next largest owner, TVM Capital (with 14.3%, and ARCH Venture Partners is next with 10.6%). The Boston firm has had no problem raising funds – and funds, and funds, and more funds – with two exits, and two other portfolio companies in option-to-acquire agreements with larger partners.

But bluebird as far as we can tell would be its first IPO, and cofounder Mark Levin told our "Pink Sheet" DAILY colleagues that there should be more in the coming year. (The story on Levin’s talk this week at the Harvard Club in New York is coming soon. The dressed-down Levin had to don a tie to speak at the stuffy club, which made for good comedy at the start of his talk: "How many people here had to borrow a tie to get in?" he asked the crowd. "I actually heard someone had to get a pair of pants.")

Fully clothed or not, every venture firm wants its portfolio companies to be public and liquid, of course, but if TRV notches multiple issues in the next several months, it could be a big validation not only of its company formation process but also its ability to shepherd those firms quickly to important milestones -- important enough for the still-small coterie of public biotech specialists to buy in. That is, if the companies going public are the ones in TRV’s portfolio that have grown from true early-stage seedlings into viable businesses.

We’re getting a bit ahead of ourselves. Yes, biopharma firms are going public, but on the whole, they’re still not big-science risk takers. A couple pain-med companies here, a PE-backed CRO there (see our Quintiles blurb below), and the next out the door is probably going to be a firm with $300 million-plus in venture backing that’s hoping public investors buy its rationale for yet another blood thinner on the market. (See our Portola Pharmaceuticals blurb below.)

Meanwhile, venture firms continue to cozy up to Big Pharma to help raise new funds or to help defray the risk of their early-stage efforts, as Avalon did with GlaxoSmithKline, in a deal that got our DOTW brethren thinking deep thoughts a couple weeks ago.

Now Atlas Venture is the latest to pull in big drug companies as limited partners. The venerable firm said this week it has Amgen and Novartis on board, although neither is accorded special rights to either invest in or acquire the companies that Atlas starts up. However, Atlas pledges to “explore areas of mutual interest” with its Pharma LPs, and Amgen and Novartis are free to invest directly in the Atlas companies from their own venture funds, both of which are extremely active. The key, Atlas partner Jean-Francois Formela told our PSD colleagues, is not to do anything that would lead the firm or its LPs to “unnatural behavior,” which we have to nominate for quote of the year. Because, when you think about it, what exactly is natural behavior for a VC and its investors? (We know a few entrepreneurs who would love to answer that in a manner unsuitable for family viewing.)

It all brings us back to philosophy: the Platonic ideal of venture capital, and all that. Are your investments the true essence of your existence, or just shadows on the wall of your portfolio? A famous philosopher once said, "I know kung-fu." But, grasshopper, if you have traveled this far, it is infinitely better to know…

Quintiles Transnational: The massive contract research organization’s return to the public markets, timed perfectly, was by no means a typical biopharmaceutical IPO. The May 8 issue raised a staggering $1.1 billion and pushed the company's market value to $6 billion as Wall Street’s interest in biopharma continues to rise. As you might guess from the dollar totals and the fact that Quintiles went private a decade ago, this was a private equity deal, not a venture capital exit. Quintiles founder and Executive Chairman Dennis Gillings, Bain Capital and TPG Capital each made more than $150 million in the IPO, and each continues to hold about 20% of the company, assuming the percentage of shares to be sold was the same in the final sale as reported in the S-1. Bain became the lead Quintiles investor in 2008, when several new private equity investors came in. The investors weren’t waiting for an IPO to get paid; they've already cashed out about $1.5 billion in dividends in the last five years. In addition, Gillings and investors split a one-time $25 million payment upon the IPO. Quintiles will use most of the proceeds to make that investor payment and pay down more than $350 million in debt. The IPO priced at the top of its range at $40, and – in another sign this was no ordinary biopharma IPO – the number of shares sold by insiders ballooned at the last minute by more than 5 million. For most VC-backed biotechs, insiders have to buy shares to get an IPO done. – Stacy Lawrence

Portola Pharmaceuticals: The next biotech IPO likely to price is for hematology firm Portola, which is currently on the road to talk up an IPO slated for the week of May 20. Portola had $125 million in cash on March 31, and wants to raise $100 million through the sale of 6.9 million shares at $13-$16 each, not a massive sum considering the firm has raised at least $306 million in venture financing. Pre-IPO, the firm’s largest shareholders are an arm of the Singapore government’s investment company, MPM Capital, Prospect Venture Partners, and several other venture firms hold more than 5 percent. At the proposed mid-point, Portola would be valued at $469 million. Portola’s lead compound is the oral anticoagulant betrixaban, a once-daily Factor Xa inhibitor that ex-partner Merck handed back to Portola in 2011. Portola hopes to carve out a market in the crowded field for the drug after hospitalization. There are other differences that Portola hopes will catch the fancy of public investors. Betrixaban is in Phase III for the prevention of venous thromboembolism (VTE) in acute medically ill patients; there isn’t another novel oral anticoagulant in the clinic or approved for this indication, according to the company. On the road show, Portola CEO William Lis pegged the betrixaban market at $3 billion to $4 billion, based on the current price of orals of about $8 daily, and assuming 35 days of usage post-hospitalization. Lis expects to market betrixaban to hospitals, so he estimates a sales force of about 100 will be sufficient. The firm’s next candidate is PRT4445, a Phase II antidote for Factor Xa inhibitors. – S.L.

Isis Pharmaceuticals: The publicly traded antisense developer said May 8 it priced a secondary offering of 9 million shares of common stock at $19 per share. Isis gathered $162.5 million in net proceeds from the sale, a sizeable amount to help the firm push through its deep pipeline, with nine compounds expected to produce Phase III or significant Phase II data by early 2014. The offering cashes in on momentum the firm has seized in the past several months – not least of which was the Kynamro (mipomersen) approval in late January for the treatment of the very rare homozygous familial hypercholesterolemia. Meanwhile, Isis’s dealflow continues unabated, as our DOTW brothers and sisters note in this post. The firm has raised more through partnerships, about $2 billion, than it has from equity sales; at the end of 2012, the firm had the potential to earn up to $5.1 billion in future milestones. It’s also worth noting that Isis owned nearly 21% of Regulus Therapeutics, which it and Alnylam Pharmaceuticals established jointly in 2007, when Regulus went public in October 2012. As of the end of February, the most recent disclosure, the stake had dipped just below 20%. Regulus debuted at $4 a share and has risen 82% to $7.29 as of May 15. Underwriters led by Goldman Sachs and JP Morgan have the option to sell an additional 1.35 million shares.-- Alex Lash

Lumena Pharmaceuticals: It’s a new company wrapped around a very old product. Lumena announced a $23 million Series A round to redirect toward orphan indications a compound that was tested more than a decade ago in more than 1,400 patients. The tests were run by Searle and then Pharmacia, where Lumena’s current VP of research worked on the program to fight high cholesterol. (Subsequent acquirer Pfizer shelved the program.) Lumena is aiming to treat cholestatic liver disease, which is characterized by retention of bile acids in the liver, resulting in painful symptoms related to an intractable itch. Sufferers of various forms, including Primary Biliary Cirrhosis, the pediatric Alagille Syndrome and Progressive Familial Intrahepatic Cholestasis, often have difficulty sleeping, and have been known to scratch their skin until they bleed and scar. Lumera will use the Series A proceeds to run Phase III trials in each of the orphan indications. The firm has been in stealth mode since 2011 with Pappas Ventures partner Mike Grey serving as CEO. Pappas led the round and recruited Alta Partners and RiverVest Venture Partners to join. Like many venture firms seeking to avoid high-risk, high-cost projects, Pappas was interested especially in pharma opportunities with defrayed risk and short clinical development paths. Grey said the prior clinical work and orphan indications requiring smaller trials made LUM001 appealing. The compound inhibits apical sodium-dependent bile acid transporter (ASBT). That protein is critical in the process of reabsorption of bile acids from the small intestine, specifically the lumen, where the body absorbs nutrients from digested food. – Paul Bonanos

All The Rest: The fortnight’s largest venture round was GPCR therapeutics developer Trevena’s $60mm Series C round to which Forest Labs committed $30mm and also optioned the company’s Phase IIb-ready TRV027 for acute decompensated heart failure… In a Series E round, oncology-focused Tokai Pharmaceuticals took in $35.5mm…Kite Pharma’s Series A preferred stock financing – including the conversion of $15mm in outstanding promissory notes – garnered the cancer immunotherapeutics developer $35mm…Belgian biotech Cardio3 Biosciences raised €19mm ($25mm) in venture funding: €7mm in new equity committed by existing investors and €12mm from the conversion of existing convertible loans…Virtual company Tacurion Pharma (formed by Drais Pharmaceuticals) raised $15mm in an A round from backers including Astellas, which also out-licensed its nocturia candidate to the start-up…In a round led by Mérieux Développement, which was joined by return backer Shire, NeuroPhage Pharmaceuticals scored $6.4mm…Callidus Biopharma closed a $4.6mm Series A financing to speed up preclinical studies of candidates in Pompe and Gaucher diseases…In a registered direct offering, Dyax will issue 8.9mm common shares priced at $2.30 and 41k Series 1 preferred shares (priced at $230 and convertible into 100 shares) for proceeds of $30mm…A stock purchase agreement with Lincoln Park Capital Fund grants Zalicus the right to sell up to $25mm worth of its common stock to support clinical trials of lead pain candidates Z160 (Phase II) and Z944 (Phase I)…Through an RDO of 3.9mm shares at $4.14, Omeros brought in $16.1mm…A follow-on public offering of 63.3mm shares at RMB12.25 ($1.99) each, resulted in proceeds of  $126mm for Chinese CRO Zhejiang Huahai Pharmaceuticals…Acadia Pharma netted $94mm through its FOPO of 8mm shares priced at $12.50…Rockwell Medical brought in net proceeds of $33.1mm in its FOPO, selling 11.5mm shares at $3.05…Cyclacel Pharmaceuticals expects to see $20mm in proceeds from a public offering of 6.7mm shares at $3…In a FOPO of 9.5mm shares at $1.50, Discovery Laboratories netted $13.4mm…Initial public offerings that priced: Receptos netted $68.3mm through the sale of 5.2mm shares at $14, the low-end of its $14-16 range; Ambit Biosciences, first planning to sell 4.6mm shares at a $13-15 range, priced 8.1mm shares at $8, still bringing in $65mm; and after trying since 2007, Insys Therapeutics finally completed a $34.2mm IPO by selling 4.6mm shares (including overallotment) at $8, way below its $16-18 range, which was later cut to $8-$10…Alocobra upped the number of IPO shares it plans to sell to 2.275mm at a $10-12 range; increased from the 1.4 mm shares in its March S-1 filing…Kamada, which filed for its IPO in April, announced it would sell 5.6mm ordinary shares…Biotechs that filed for IPOs: OTC cellular therapeutic vaccines developer Heat Biologics and Esperion Therapeutics; the latter cardio-focused company went public in 2000, but was acquired in 2003 by Pfizer, which spun it off to investors five years later…Vivus plans to offer $200mm worth of 7-year, convertible senior unsecured notes…Alimera Sciences (ophthalmic pharmaceuticals) has secured a $20mm debt facility – $5mm in a principal term loan, plus up to $15mm more as a working capital line of credit – through Silicon Valley Bank…Theravance is splitting into two separate public entities, one to focus on its 2004 GlaxoSmithKline deal, the other to perform R&D; and in a separate arrangement, Elan will make a $1bn cash payment to Theravance in exchange for a 21% stake (held by GSK under the 2004 deal) in royalties related to a portfolio of four Theravance respiratory drug programs…In fund news: Merck KGAA pledged to increase its investment in its corporate venture capital fund MS Ventures, raising its funding level to €100mm ($129mm) from up from its initial €40mm at the fund's inception in March 2009. -- Maureen Riordan

Photo courtesy of IngytheWingy, who seems to have a thing for public transportation. 

Thanks to Mike Goodman for his contributions this week.