Deals Of The Week Road-Tests Biopharma Options

More options are always better, right? Obviously, that’s a “yes” when it comes to building our dream Tesla Model S. But big biopharma is getting nowhere fast with deals that build in options to license drug candidates.

The number of option-to-license deals executed peaked at more than 30 in 2009, when biotech financing had dried up in the wake of the 2008 U.S. economic meltdown, and has declined every year since, according to data from Elsevier’s Strategic Transactions database. That’s only counting deals with an option-to-license as the main component. What has big biopharma accomplished with its slew of option deals in the last decade and a half? Not much, so far. Even though option-based partnerships can be cheap, they also rarely offer results.

Option-to-license deals, or option-alliances, are often a way of making a half-hearted bet on biotechs’ riskiest, early-stage candidates and technologies. For small biotechs, the extent to which they rely upon these deals can be a sign of their relative fiscal desperation. Option-alliances lock up biotech assets very early, with a high level of continued uncertainty (and development costs) for the biotech and a capped future potential upside.

For pharma, these deals are a bargain – pay a little upfront and part of early-stage R&D costs and then pick up rights to a candidate, or not, typically after clinical proof-of-concept data emerges. Biotechs are able to retain control of their assets for a while longer, potentially allowing them to move development forward faster.

We analyzed all R&D-based option-alliances with a disclosed potential value of $100 million or more. That’s almost 120 deals, some dating back as early as the late 90s. Many of the more recent ones remain active, of course; these deals typically extend over at least three or four years. Most of the remaining deals either expired or were terminated. We could only find seven of these $100M+ deals that actually resulted in option exercises, and some of those later blew up in the clinic.

GlaxoSmithKline is a nice case in point. It has been one of the most active R&D options dealmakers, with at least 18 of these deals, most of which were initiated from 2006 through 2009. A few of GSK’s option-alliances have resulted in abject disappointments – most prominently with Nabi Biopharmaceuticals for the smoking cessation product NicVax, which failed in Phase III. Last year, Nabi merged with Biota.

Others got shunted to the side due to changes in GSK priorities (a $1.5B bio-bucks deal w Targacept was terminated in 2011 as the pharma left neuroscience) or as biotechs became defunct (after a $1.2B bio-bucks deal in 2007, Epix Pharmaceuticals then slid out of existence in 2009). Several of GSK’s option-to-license deals were done under its Center of Excellence for External Drug Discovery (CEEDD), which silently sank under waves of corporate restructuring around 2010.

(GSK is undeterred from experimenting with its approach to external, early innovation. This week it picked the first set of winners from a discovery-stage academic competition. See below for further details.)

The pharma does have several ongoing option-alliances, including at least four with companies that recently IPO’d. One is an option to back-up compounds for Duchenne muscular dystrophy (DMD) from Prosensa; GSK is partnered with the biotech on lead compound drisapersen, which failed in Phase III testing to treat DMD in September. Optimists are hoping its exon skipping technology has progressed since the first iteration and are looking for an effective DMD treatment among Prosensa’s back-up compounds, some of which GSK can option. Prosensa is the worst-performing 2013 IPO, down 72%.

GSK also has an anti-inflammatory and HCV deal with microRNAi company Regulus Therapeutics, initiated in 2008 and expanded in 2010; an anti-cancer stem cell antibody deal with OncoMed Pharmaceuticals that was for four candidate originally from 2007, but was cut down to two candidates in 2011; and a discovery deal with Five Prime Therapeutics for skeletal muscle diseases and muscle wasting targets and candidates that was originated in 2010 and expanded in 2011.

GSK has exercised its options at least twice, but both times candidates were returned. In 2010, it optioned Anacor Pharmaceuticals’ Gram-negative infection treatment and then subsequently returned it a few years later. That same year, it optioned Traficet-EN (now vercirnon) from ChemoCentryx. This September, GSK returned rights to the candidate for all indications. The pharma retained CCX354 for rheumatoid arthritis, which it also optioned. It may still option a third candidate under the 2006 deal.

Despite keeping a lot of options open, no one’s going anywhere fast. But we’re keeping our eyes on the road, moving ahead to all the latest deals (including loads of academic and discovery partnerships) in this edition of…

Salix/Santarus: The union of Salix Pharmaceuticals with Santarus creates a billion-dollar gastrointestinal specialty pharma that holds U.S. rights to fast-growing diabetes drug Glumetza (metformin extended release). Salix agreed Nov. 7 to pay $32 per share in cash for San Diego-based Santarus, valuing the company at $2.6 billion; its combined annual revenues would be about $1.3 billion based on their most recent quarterly performances. Salix has relied heavily on Xifaxan (rifaximin) for traveler’s diarrhea caused by Escherichia coli infections and hepatic encephelopathy; it produced $514.5 million in 2012 revenues, about 70% of the company’s total product sales. But it says the conjoined entity will be more diversified, with no drug accounting for more than half its revenues. Glumetza, a drug Santarus shares with Depomed, has delivered $131.4 million in revenue to Santarus in the first nine months of 2013. The buyout price represents a 37.8% premium over Santarus’s Nov. 7 closing price of $23.22. Raleigh, N.C.-based Salix had about $817 million in cash at the end of the third quarter, but intends to finance the deal with $1.95 billion in debt and a $150 million revolving credit facility from Jefferies Finance, as well as nearly all of its cash on hand. - Paul Bonanos

Roche/Polyphor: Switzerland-based Roche signed an exclusive global licensing deal to develop and commercialize Swiss biotech Polyphor's investigational antibiotic POL7080 against certain hospital-acquired superbug infections known as Pseudomonas aeruginosa, signaling Roche’s first foray back into antimicrobial development for three decades. Roche will pay up to CHF 500 million ($548 million) for the experimental antibiotic, which has only just entered Phase II testing, the companies said Nov. 4. The world’s largest maker of cancer drugs, which is trying to diversify into other disease areas, will make an upfront payment of CHF 35 million and milestone payments of up to CHF 465 million to the Swiss biotech. Roche said POL7080 belongs to a new class of antibiotics that kills P. aeruginosa, a bacterium found in hospitals and resistant to many antibiotic treatments, by a novel mode of action. It’s the first of a number of novel antibiotic candidate drugs being assembled by research and early development group pRED, which is now under the new leadership of John Reed and focusing on three main areas of unmet medical need: Hepatitis B, Influenza and Antibiotics. The pact with Polyphor is the first demonstration that Roche is back in antibiotics. In contrast, other Big Pharma companies have cut back, including former field leader Pfizer, which closed its antibiotic R&D center in Connecticut in 2011, as well as Bristol-Myers Squibb and Eli Lilly. AstraZeneca, GSK, and Merck remain active in the space. Privately-owned Polyphor discovers and develops macrocycle drugs intended as a complement to classical small molecules and large biopharmaceuticals. Although Polyphor, whose main shareholders are private individuals, doesn’t have any products on the market, its pact with Roche is its sixth deal since 2008. Its three drug candidates developed using its protein epitope mimetics (PEM) drug discovery technology are POL7080; POL6326, a CXCR4 antagonist currently in Phase II and ear-marked for several indications; and POL6014, an elastase inhibitor that’s in pre-clinical studies. PEMs are “medium-sized…, fully synthetic cyclic peptide-like molecules that mimic the two most relevant secondary structure patterns involved in Protein-Protein Interactions (PPIs),” according to the company’s Web site. It adds that they are “among the most potent and selective molecules known to modulate PPIs, GPCRs with large ligand-binding domains, and enzymes.” - Sten Stovall

Endo/Paladin: Endo Health Solutions’ new CEO Rajiv De Silva is making good on following in the footsteps of his former employer Valeant by conducting rapid-fire M&A that adds to the specialty pharma’s business. The Pennsylvania company announced Nov. 5 that it will acquire Montreal-based Paladin. The Canadian spec pharma has over 60 marketed products and will give Endo a jumping off point for building its business in Canada, Mexico, and South Africa. The $1.6 billion deal will be an almost all-stock transaction, with Endo paying CAD$77 ($73.70) per share for all outstanding shares of Paladin, a premium of 20% to Paladin’s share price of $63.91 on Nov. 4, the day before the deal was made public. Paladin shareholders will receive 1.6331 shares of the new company in stock and CAD$1.16 in cash, as well as one share of Knight Therapeutics, a new company. Knight will be spun-out of Paladin and be formed around Impavido (miltefosine), a treatment for the parasitic disease leishmaniasis. Impavido received a positive opinion from an FDA advisory committee in mid-October and has a PDUFA date of Dec. 18. Following the deal, the new company will be re-domiciled in Ireland in an effort to take advantage of a more favorable tax rate. Currently, Endo has a tax rate in the high-20% to 30% range. The new company will have a tax rate closer to 20%. - Lisa LaMotta

Pfizer/Juvenile Diabetes Research Foundation: The Juvenile Diabetes Research Foundation (JDRF) said Nov. 4 it would partner with Pfizer’s Centers for Therapeutic Innovation (CTI) to co-fund up to four jointly selected projects in the fields of immune tolerance, diabetic nephropathy and beta cell health. This is JDRF’s first corporate partnership since it announced a collaboration last year with Novo Nordisk, which will run out of the pharma’s Type 1 Diabetes R&D Center in Seattle. JDRF is the largest charitable supporter of type 1 diabetes R&D; it is currently sponsoring about $530 million worth of research, with $110 million in support last year. Pfizer’s CTI was established in 2010 to help further translational science; it hopes to get its first compound into the clinic this year and to bring two candidates into the clinic every year starting in 2014. CTI works with a network of 24 academic and medical institutions. Financial details of the deal were undisclosed. - Stacy Lawrence

Eisai/Arena: Eisai doubled down on Arena’s weight loss drug Belviq (lorcaserin) by expanding its commercialization rights to most of the world from much of North and South America. That’s despite slow sales in the drug’s first full quarter on the market – only $5.4 million. Insurers have been slow to start to reimburse for Belviq and Vivus’ Qsymia (phentermine/topiramate ER). Under the expanded deal, Arena will receive a $60 million upfront payment and up to $176.5 million in regulatory and development milestones. That’s an increase of $123 million from the milestone amount remaining under the prior agreement. Arena will continue to sell Belviq to Eisai for the U.S. and other North and South American territories for a purchase price of 31.5% and 30.75% of Eisai’s net sales in those regions, respectively. For Europe, China and Japan, Arena will receive 27.5% of Eisai’s net sales, while for all other territories the rate is 30.75%. These rates can increase on a tiered basis. Arena also stands to receive a one-time purchase price adjustment of $1.56 billion based on sales in the territories covered by an agreement; that’s an increase of $185 million from the prior deal. Eisai has exclusive commercialization rights in all countries worldwide, excluding South Korea, Taiwan, Australia, Israel and New Zealand. The partners expect also to investigate Belviq as a smoking cessation treatment. - S.L.

GSK/Various Academic Researchers: With a view to front-loading its pipeline, GSK has selected eight winners in its first Discovery Fast Track competition, designed to translate academic research into starting points for new potential medicines. The contest attracted 142 entries across 17 therapeutic areas from 70 universities, academic research institutions, clinics and hospitals in the US and Canada. The program gives certain researchers the opportunity to partner with GSK and jump-start their research into a development program. The winning projects deal with important unmet medical needs, including antibiotics resistance, diseases of the developing world, and certain cancers. The selected scientists will collaborate with GSK’s Discovery Partnerships with Academia (DPAc) team, the sponsor of the competition, to quickly screen and identify novel compounds to test their hypotheses. If advanced chemical testing is successful, the winning investigators could be offered a DPAc partnership to further refine molecules and assess their potential as novel new medicines. GSK devised the contest as a potential engine for accelerating input into its translational research operation, hoping to entice the brightest minds across North America with the promise of lending its potential to their discovery-stage programs. GSK and the academic partner share the risk and reward of innovation, where the U.K. drug maker funds activities in the partner laboratories, and provides in-kind resources to progress a program from an idea to a candidate medicine. Work on the winning Discovery Fast Track projects will begin immediately and the first screens are expected to be completed in mid-2014. - S.S.

Johnson & Johnson/ Evotec: Johnson & Johnson and Evotec are looking broadly, beyond the current focus on beta amyloid and Tau protein-based mechanisms, to identify new targets for Alzheimer’s disease. Under a collaboration announced on Nov. 8, the companies will seek to identify drug targets that could lead to entirely new approaches to treatment using Evotec’s TargetAD database. At best, the drugs in clinical trials today, if successful, will have modest efficacy for treating symptoms of mild-to-moderate patients, and “delay Alzheimer’s symptoms by a few weeks,” said Evotec’s Werner Lanthaler in an interview. The Janssen-Evotec partnership is much more ambitious than current efforts, both in its approach to how it achieves its goals and the goals themselves, he added. The database is derived from analysis of dysregulated genes in high-quality, well-characterized human brain tissues representing all stages of disease progression, Evotec said. It was built off of tissue contributions from The Netherlands Brain Bank and is “systematized, unbiased, and comprehensive,” said Lanthaler, explaining that by being unbiased, it is agnostic to whether the approach is ultimately an antibody, small molecule, or other kind of compound.  No other companies currently have access to the database, and Lanthaler was cagey in stating whether they would or its use would be exclusive to J&J. But he did say that J&J was the first company Evotec approached when it decided to look for licensees, and it jumped on the opportunity – perhaps in part because the companies have had a previous successful relationship in other therapeutic areas. Janssen will reimburse up to $10 million of full-time employee-based research costs and make preclinical, clinical, regulatory and commercial payments, capped at between $125 million and $145 million per program. Evotec will also be entitled to royalties from sales from any products that emerge from the collaboration. The deal runs for three years, and, on J&J’s side, is being conducted through its California Innovation Center. - Wendy Diller

(Thanks to Teslamotors.com for use of this image of our new Tesla S -- are you paying attention Santa??)

Uneasy Lies The Head That Wears a Financings of the Fortnight Crown

Compared to other types of financing, royalty-based deals in the biopharma world are rare. That’s because a company needs products with future revenue to parlay into a near-term lump sum, and the relative few companies that have such products often don’t need the immediate cash or can get it other ways.

So when a royalty deal – or a debt deal using product royalties as collateral – crops up, we take notice. And they seem to be cropping up more often. Just our imaginations? Not according to Elsevier’s Strategic Transactions database, which offered up ten deals in 2012, the most in any of the past ten years. 2011 was a close second with 9 deals, and with three more this year, 22 of the 47 we found in the past ten years are of recent vintage. (These numbers reflect only the publicly disclosed deals; there are certainly more, as investors in this space often keep activities out of the spotlight.)

In dollar terms, the total since the start of 2003 is $5.7 billion. The last two years and change have seen $2.7 billion worth of deals, a proportion akin to the deal flow.

The richest deal in recent years is Royalty Pharma’s $761 million purchase of the earn-out rights from the shareholders of Fumapharm, the German firm that sold to Biogen Idec in 2006. The deal could end up extra sweet for Royalty, now that the Food and Drug Administration has approved the main product in the Fumapharm dossier, the oral multiple sclerosis treatment BG-12, renamed Tecfidera.

Another near-blockbuster was Royalty’s $609 million purchase of DPP-IV rights from Astellas Pharma’s Prosidion division. A bit farther down the pay scale, but still significant, were Dendreon’s sale of Victrelis royalties to CPPIB Credit Investments for $125 million, and Nektar Therapeutics’ $124 million deal with an offshoot of Royalty Pharma for its royalties to Mircera and Cimzia, both of which were formulated with Nektar’s pegylation technology.

Now add one more to the list. This fortnight, weight-loss drug maker Vivus used royalties of its Qsymia, weighed down so far by slow sales, as collateral to borrow up to $110 million. (We describe the deal below in our roundup.) And of course, in what could be the ne plus ultra of all royalty deals, Royalty Pharma (who else?) is dangling $6.6 billion to buy Elan, which after its major divestments is basically a holding company for royalties from multiple sclerosis treatment Tysabri. Elan has resisted so far, instead promising shareholders it will pay out a dividend based on the Tysabri stream. This week an Irish regulatory panel gave Royalty a May deadline to firm up its offer.

The dance began in late February soon after Biogen Idec bought out Elan’s share of the drug, paying Elan $3.2 billion plus the promise of tiered sales royalties. Whether Royalty Pharma succeeds in its hostile buyout is more a matter for our Deals of the Week compatriots, but it’s our duty to note that Royalty and its brethren have plenty more to spend. Royalty raised $600 million in debt in 2012 to put toward investments. Its previous debt raise included $850 million to give back to shareholders. Healthcare Royalty Partners, which dropped the "Cowen" from its name in December, raised a $1 billion fund in early 2012.

Royalty funds are to venture capital what bonds are to stocks: a lower-risk, lower-return investment, and often built with complex structures that purposely limit both parties' risk. They're certainly not going to replace a big chunk of venture capital, because they can't fund companies without current or near-future revenue streams. But as the numbers show, they're providing billions of dollars of capital to an industry that can always use a few extra pennies.

It's no jest. Whether you’re biotech royalty or an indentured serf, you’re always welcome in the biweekly court of…

Vivus: Initial sales of the Vivus weight-loss drug Qsymia (phentermine/topiramate) have been slow, so the company fortified its balance sheet with $50 million in new debt. The "synthetic capped royalty financing" from Pharmakon Advisors, announced March 26, allows Vivus to raise another $60 million in debt before the end of 2013, at a time of Vivus’ choosing. Under the terms of the arrangement, Vivus is obligated to repay the Pharmakon fund according to a schedule of pre-set payments between 2014 and 2018, or 25% of Qsymia royalties, whichever is valued lower. Analysts expect that Vivus would make quarterly payments between $7 million and $10.3 million during most of the four-year schedule, if it opts to raise the other $60 million later this year. The total repaid is likely to be about $162 million, according to analysts. Sales of Qsymia were just $2 million during the fourth quarter of 2012, its first full quarter on the market since FDA approved the drug in July 2012. Vivus had $213 million in cash and equivalents on Dec. 31, and spent $58 million on its operations during the fourth quarter. The company is seeking to modify its current Risk Evaluation & Mitigation Strategy for Qsymia, which limits sales of the drug to mail-order pharmacies; an FDA decision allowing it to sell via traditional pharmacies could come in late April or early May. – Paul Bonanos

Novira Therapeutics: The antiviral startup said March 26 it has topped off last year’s Series A with $7.5 million from Versant Ventures, matching the earlier co-lead investors and bringing the round’s total to $25 million. Novira is one of the few startups around working on treatments for Hepatitis B, its lead program, and for HIV. That, plus its pursuit of a relatively new mechanism of action – capsid assembly inhibition -- was enough to put Novira on our sister publication Start-Up’s annual A-List, which highlights the year’s most intriguing recipients of Series A money. 5am Ventures and Canaan Partners led the initial Series A investment, which came after the company spent years subsisting on angel and nonprofit funding and casting about for a way forward. The angels who nurtured the firm through its pre-Series A years also participated in the A round. Only after Lalo Flores, former head of antiviral research at Merck & Co. took over did Novira steer toward capsid assembly. It aims to file an IND for its lead HBV program by year’s end. The company's oral therapeutic candidates could potentially be used as both a monotherapy or in combination with currently used drugs. The company says the Series A money should be enough to move that initial program into Phase Ib or Phase IIa. For Versant’s contribution, the firm will place one of its new European team members, Gianni Gromo, in a board seat. Gromo is one of three Versant partners based in Basel, Switzerland and has ties to Versant’s top biopharma managing director Brad Bolzon from their days at Roche. – Alex Lash

Theraclone Sciences: Another antiviral add-on this week, with Seattle-based Theraclone bringing its Series B total to $50 million with contributions from a host of existing investors including Arch Venture Partners, Canaan Partners, MPM Capital, and Healthcare Ventures. In addition to the extra $8 million from investors, the antibody platform company also secured $6 million in debt from MidCap Financial and Silicon Valley Bank. The firm’s lead programs in the clinic are aimed at pandemic and seasonal flu, partnered with Zenyaku Kogyo, and human cytomegalovirus (HCMV). It has a discovery-phase antibody partnership with Pfizer, as well, and it has worked with Scripps scientists and the International AIDS Vaccine Institute on research to identify more than a dozen “broadly neutralizing” antibodies that might eventually lead to a vaccine for HIV. Theraclone’s platform screens for antibodies from the B cells of the lucky humans who demonstrate natural resistance to particular diseases. Once called Spaltudaq, Theraclone is one of a handful of biotechs to emerge from the Seattle incubator Accelerator and has had its share of tribulations, the worst of which was the sudden death of its CEO David Fanning in 2010. – A.L.

Receptos: The San Diego biotech filed April 4 its intent to go public, joining the growing queue of life science firms with hopes of breaking through to public markets. The firm is farther along in the IPO process than it might have been in previous times, as it actually filed its S-1 confidentially in February under new securities rules ushered in by last year's JOBS Act. Its lead compound is in Phase II testing against relapsing multiple sclerosis and inflammatory bowel disease. Its top four shareholders, each with slightly more than 15% ownership, are Flagship Ventures, Lilly Ventures, ARCH Venture Partners, and Venrock. An IPO would also benefit a much newer venture fund, Osage University Partners, which is trying to prove the worth of a new model based on schools’ participation rights that we describe in the March issue of Start-Up. Based on work that elucidates the structures of G-coupled protein receptors, Receptos spun out of the Scripps Research Institute, which has a partnership with Osage, which would send a slice of its carried interest back to Scripps if the fund succeeds. A Receptos IPO would certainly help. It has not yet set terms of the offer. Credit Suisse and Leerink Swann are leading the underwriting team. Other health care firms on file to go public include Bausch & Lomb, Chimerix, Omthera Pharmaceuticals, Harvard Apparatus Regenerative Technology, Ambit Biosciences, and Sophiris Bio. – A.L.

All The Rest: Raising $38mm from Invesco Asset Management in the biggest venture financing of the fortnight was infirst Healthcare, founded less than a year ago to launch new consumer cough and cold and pain medicines…Through a $33mm Series E financing (concurrent with the conversion of $71mm in debt into Series E preferred stock), Revance Therapeutics aims to complete Phase III trials for RT001, a topical botulinum toxin type A for crow’s feet wrinkles…Led by two China-focused venture funds, research and diagnostics MAb firm OriGene Technologies brought in $21.3mm in its Series D round…With participation from J&J Development and Pfizer Venture, Aquinox Pharma secured $18mm in Series C financing to help advance its Phase II AQX-1125 for COPD… To support development of spec pharma Taris Biomedical’s LiRIS (Lidocaine-Releasing Intravesical System) Phase II interstitial cystitis candidate, return backers added $12.5mm to the $37.3mm the company had previously raised…Schizophrenia drug firm Reviva Pharmaceuticals received $12mm in early-stage debt and equity funding from undisclosed investors… In a Series A round, Hurel Corp. (artificial tissue constructs and microfluidic cell-based assay platforms) snagged $9.2mm from Spring Mountain Capital… Genomic data analysis start-up Bina Technologies brought in $6.25mm of a planned $8mm Series B round…In the second close of initial financing secured in November 2012 when it spun-off from InDevR, rapid virus quantification firm ViroCyt has brought the total funding to $5mm…Undisclosed equity financing secured from the Innovation & Investment Fund Gelderland (managed by PPM Oost) along with several angel backers will enable InteRNA Technologies to progress its lead candidate miR-3157 for melanoma through preclinical studies…In a private placement, public Australian company Prana Biotech issued 35.9mm new fully paid ordinary shares at a price of A$0.195, for $7.3mm in proceeds to fund further development of PBT2, now in two concurrent Phase II trials in Huntington disease and Alzheimer's disease… Through a follow-on offering of up to 165.7mm new Hong Kong-listed shares at HK$24.60, Chinese CRO Sinopharm Group could reap $515.3mm in proceeds to expand its sales network and complete additional M&As… Arca Biopharma hopes to bring in $20mm in a FOPO to fund a Phase IIb trial of Gencaro (bucindolol hydrochloride) for atrial fibrillation… With proceeds from a public offering of units, public Toronto spec pharma Trimel Pharmaceuticals hopes to fund costs related to an NDA filing and further clinical trials for its CompleoTRT bioadhesive intranasal gel technology for male hypogonadism… Eye care giant Bausch & Lomb – owned by PE firm Warburg Pincus, which acquired it and took it private in a $3.67bn 2007 buy-out – filed for an initial public offering that could raise as much as $1.5bn… Two biotechs sent ranges for IPOS, but have yet to price: Chimerix (oral antivirals) plans to sell 6.1mm shares at $13-15, while dyslipidemia therapeutics company Omthera Pharmaceuticals said it hopes to get between $12-14 through the sale of 5.8mm shares… Cell Therapeutics, using proceeds from a $15mm senior secured term loan with Hercules Technology Growth Capital, hopes to advance Phase III pacritinib (for myelofibrosis) and promote recently EMA-approved non-Hodgkin lymphoma treatment Pixuvri (pixantrone) in Europe…In a second debt financing by Hercules, CNS stem cell therapeutics developer Neuralstem issued the finance company 649k warrants to purchase Neuralstem stock at an exercise price of $1.08…In exchange for up to $16mm, ophthalmologic drug developer InSite Vision will sell its future royalties on bacterial eye infection medicine Besivance (besifloxacin ophthalmic suspension) to SWK Funding LLC…Cancer-focused public Australian biotech Prima Biomed hopes to raise $15.6mm in a rights offering of up to 150mm new fully paid ordinary shares. - Maureen Riordan

Royally weird photo courtesy of flickrer simononly.

Deals Of The Week: A New Sound For The Fourth Of July

Certain sounds signify the Fourth of July season in the U.S. – the pop and boom of fireworks, the sizzle of burgers and hot dogs on the grill, the crack of the bat as baseball reaches mid-season. And, oh yes, the sound of the other shoe dropping in the pharma/biotech M&A arena.

Wait, the next shoe dropping in biopharma M&A? That’s exactly what the industry and its followers are awaiting in the immediate aftermath of Bristol-Myers Squibb’s $5.3 billion buyout of Amylin Pharmaceuticals just prior to the holiday. Now, industry analysts are studying that and other recent deals for trends or clues about what is coming.

Near-term, Wall Street awaits the outcome of GlaxoSmithKline’s bid for its Benlysta (belimumab) partner Human Genome Sciences. On June 29, GSK extended its hostile, $13-per-share offer for the Maryland biotech through July 20, while HGS again turned down the bid and said it is accepting counter-offers until July 16.

Salveen Richter, managing director, biotechnology equity research, at Cannacord Genuity Securities, pointed to recent pharma buyouts of biotechs such as Gilead Sciences/Pharmasset, Bristol/Inhibitex, Amgen/Micromet and AstraZeneca/Ardea Biosciences, saying pharma seems to be focused on acquisitions that offer later-stage assets or proven revenue generation or profitability.

“Overall, we’re seeing pharma be opportunistic, picking assets to build their R&D engines or showing interest in later-stage, proven assets, but they have avoided limited-product companies in the initial drug launch phase,” she said.

AstraZeneca/Ardea clearly was a continuation of the U.K. pharma’s interest in bolt-on acquisitions, she added. “AstraZeneca obviously made an investment in rheumatology through its partnership with Rigel Pharmaceuticals, but the recent Ardea acquisition was a bolt-on as they could just add that asset for gout right onto the rheumatology franchise – and they have publically stated they are looking for more,” Richter noted. “If a company is in a therapeutic area with built-out commercial infrastructure or plans to [build], bringing in an asset in the same category is highly leveragable.”

With some speculating that the Amylin purchase will lead to a run on companies focused on diabetes or obesity, Stephen Willey, director, equity research, biotechnology, at Stiefel Nicolaus, wondered if such assets, particularly in the diabetes space, are in plentiful supply.

“The diabetes space is tough only because you don’t see a lot of companies playing in it,” he said. “That’s because it’s a large, primary care market and one of these opportunities whereby the acquirer is going to be held hostage to finding a partner. I’m not sure there’s necessarily a ton of read-through on the Amylin take-out; to me that was company-specific.” Buying Amylin was a response by Bristol to its clinical setbacks with dapagliflozin, which created a hole in its revenue projections for 2015-2016, he explained.

But to the extent M&A interest turns to diabetes, as it did with hepatitis C in 2011, Willey cites Lexicon Pharmaceuticals as a potential target. “Their Phase III-ready asset [LX-4211, an oral dual inhibitor of sodium-dependent glucose transporters 1 and 2 (SGLT1/SGLT2)] is probably better than any other diabetes asset that we’ve seen in development,” he asserted. “I would argue that the way that drug works, once-daily oral, has the potential for making the GLP-1 analogues obsolete in five years.”

Simos Simeonidis, senior biotechnology analyst with Cowen & Co., does not see any unusual trends in this year’s M&A activity – just a further recognition by big pharma of its ongoing need to respond to the patent cliff in varying ways.

“It’s part of a continuum – we’ve seen a lot of pharma acknowledge that their internal innovation engines are not working well and they’re cutting,” he said. “They’re realizing that they’re not effective, so they’re saying ‘let’s cut some of the R&D function’ and out-source it to their business development and M&A budgets because there are some late-stage assets they should bring in instead of waiting for their own programs to happen.”

If there is a wave coming, though, Simeonidis thinks it may be in the obesity space. Arena Pharmaceuticals recently obtained FDA approval of weight-loss drug Belviq (lorcaserin), but was required to delay launch because the drug is classified as a controlled substance. That means Vivus still has a chance to beat lorcaserin to market with Qnexa (phentermine/topiramate), which has a July 17 PDUFA date.

“Qnexa is an asset that should be in the hands of big pharma,” Simeonidis said. “I think it’s the best obesity drug of the three [Orexigen Therapeutics’ Contrave (naltrexone/bupropion) is a third candidate]. Lorcaserin is approved but it won’t be on the market for four to six months, so Vivus could [have its drug] approved and on the market before Arena, assuming there is not a similar delay. And there’s a big difference between the two drugs – the Vivus drug is a lot more effective so if big pharma looks into obesity, it will grab Vivus.”

Whoever grabs what, Deals of the Week will be there to record and interpret the action. Now on to  …

Janssen/CorImmun: Johnson & Johnson subsidiary Janssen-Cilag revealed that it has acquired German biotech CorImmun for an undisclosed amount. The deal, which came to light June 28, nets Janssen a Phase II drug candidate for heart failure. CorImmun had been investigating the small cyclic peptide COR-1, which is thought to reduce the autoimmune effects of antibodies that act against the beta-1 adrenergic receptor, thereby improving heart function and mitigating myocardial damage in patients in the midst of heart failure. A mid-stage trial of the drug began in September 2011. Janssen will assume responsibility for further development in exchange for an upfront payment, although it may owe a further payment based on a clinical milestone as well. Investors in CorImmun included MIG Verwaltungs AG, Bayern Kapital, BioM AG, HighTech Gruenderfonds and KfW Bank; the company raised a €7.45 million ($9.23 million) second round of funding in October 2010. – Paul Bonanos

AstraZeneca/Cellworks: AstraZeneca said it will collaborate with Saratoga, Calif., start-up Cellworks to discover and develop new combination therapies for drug-resistant forms of tuberculosis. The collaboration also will receive support from Wellcome Trust, the U.K.’s largest medical charity. Cellworks, which has an R&D center in Bangalore, India, will use its platform to identify potentially efficacious drug combinations with few toxic side effects. AstraZeneca will “validate” the 10 best models using both in vitro and in vivo techniques, according to a company statement issued July 2. Although the companies initially will address drug-sensitive and resistant tuberculosis, they say they will aim to treat multi-drug-resistant TB (MDR-TB) down the road. Founded in 2005, Cellworks already has used its predictive platform to identify oncology and autoimmune drugs, including a rheumatoid arthritis treatment it says is ready for clinical development. Artiman Ventures backed the company in a $7.5 million Series A round during early 2009. – P.B.

Ferring/Albireo: Gastroenterology-focused Ferring Pharmaceuticals licensed a Phase III-ready constipation drug from AstraZeneca spinout Albireo on July 3 in a deal involving an undisclosed upfront fee, milestones and tiered double-digit royalties on sales. Ferring, which also is taking over development costs for the drug, elobixibat, gains worldwide rights except for Japan, South Korea, Thailand, Indonesia, Vietnam and Taiwan. Albireo licensed Asian rights to the compound to Japan’s Ajinomoto, also for undisclosed terms, in April. Elobixibat, a first-in-class compound that modulates enterohepatic circulation of bile acids by partially inhibiting the ileal bile acid transporter, increasing colonic fluid secretion and motility, is about to enter Phase III in chronic idiopathic constipation and Phase IIb in irritable bowel syndrome with constipation. Ferring said the drug will strengthen its gastroenterology portfolio, led by the inflammatory bowel disease drug Pentasa (mesalazine). Sweden-based Albireo was founded in 2008 when AstraZeneca spun out a set of gastrointestinal compounds into the new company, which was backed in a $27 million Series A by Nomura Phase4 Ventures, TVM Capital and Scottish Widows Investment Partnership.  – Joseph Haas

ADC Therapeutics/Cancer Research UK: Switzerland-based antibody-drug conjugate developer ADC Therapeutics has revealed one of the sources of the antibodies required to target its "warheads" to cancer cells. It has signed an agreement, announced July 6, with Cancer Research Technology, the commercial arm of charity Cancer Research UK, to exploit antibodies and peptides identified by researchers working for the charity, and one antibody co-owned by the University of Copenhagen, Denmark. These will be combined with warheads and linkers obtained from Spirogen Ltd. under an agreement signed in March 2012, through which ADC Therapeutics can use Spirogen's pyrrolobenzodiazepines (PBDs) against 10 specific targets, cancer-associated receptors and the like. The PBDs are released when the conjugates are internalized into cells, and bind deep in the minor groove of DNA to block replication. But the neat bit is that they usually are overlooked by DNA-repair enzymes, so they might not be associated with the development of resistance. The antibody-PBD conjugates will be taken forward into preclinical studies initially funded by ADC Therapeutics and conducted in the laboratories of three London universities, Queen Mary, UCL and King's College London. Financial details of the collaboration were not disclosed. ADC Therapeutics, which was established at the start of 2012 by the private equity firm Celtic Therapeutics Management LP, also is the majority owner of Spirogen. – John Davis
 Photo credit: Wikimedia Commons

Financings of the Fortnight Ponders Neurodegenerative Death And Taxes

The big funding news this fortnight doesn’t come from public or private investors, it comes from taxpayers. As "The Pink Sheet" DAILY reported May 15, the Obama administration formally rolled out its national Alzheimer’s plan, which has been in the works for more than a year.

Alzheimer’s and other dementia-related diseases were already slated to get $450 million in National Institutes of Health funding in 2012, with the same amount proposed by the White House for 2013, but the new plan adds extra money: $50 million right away this year and $80 million proposed for next year, with another $20 million for caregiver support, education, data collection and other services.

Intriguing, then, that in a field where clinical trial costs are often cited as a major barrier to an already-skittish industry getting more deeply involved, nearly half of the extra $50 million for 2012 is earmarked for clinical trials. It won't help struggling biotechs push promising treatments, mind you; $16 million is going toward a prevention trial using the Roche/Genentech-sponsored antibody crenezumab to test still-healthy members of extended families in and around Medellin, Colombia, who share a rare genetic mutation that almost assures them of early-onset Alzheimer’s. The study, which the sponsors consider to be a Phase II adaptive trial, will cost an estimated $100 million. A private research group, the Banner Alzheimer’s Institute of Phoenix, is in charge, and chose crenezumab as the agent last December because it has demonstrated a better safety profile so far in early Alzheimer’s trials conducted by Genentech.

In addition to the NIH’s $16 million, Banner is putting up $15 million. Genentech will pay the remaining costs, but it’s unclear who will pay if the cost runs beyond $100 million. (Genentech spokeswoman Robin Snyder declined to speculate on additional costs but said the company doesn’t expect funding to be an issue.)

However it plays out, the fact of mighty Roche getting subsidies for as much as one-third of a major trial is, at the least, a sign of the importance of making progress – any progress at all – in Alzheimer’s R&D. We’re not complaining; if $16 million of our national treasure brings about an Alzheimer’s breakthrough, or simply speeds the progress toward one, it’s money well spent and a pittance compared to the costly burden of the disease now and a generation from now.

But to be clear: Neither Banner nor NIH accrue any rights to crenezumab, which Genentech licensed from Swiss biotech AC Immune in 2006, so if the trial points toward crenezumab as a viable treatment, Genentech/Roche could be sitting on a gold mine. The trial is expected to run five years, with an interim analysis after two. At that point the investigators would evaluate continuation of the trial to support an application for approval, said Snyder. “We are hopeful that the trial will support an indication, the specifics of which are yet to be discussed with regulatory authorities,” she wrote in an email. “If it works we would like crenezumab to be as broadly available to patients who may be eligible.”

The Banner Institute plans at some point to test the same antibody in people at higher risk for the more common form of Alzheimer’s.

A side note: Steering millions of federal dollars toward potentially groundbreaking Alzheimer’s trials hasn’t yet provoked the same skepticism as the millions being steered toward other drug discovery and development efforts under the new translational center known as NCATS.

Funding crucial Alzheimer’s trials is of course a different proposition than, say, repurposing drugs that have sat on industry shelves or fallen out of use, one of the mandates of NCATS, which had a $575 million budget this year. But both efforts are dollars spent that, in a parallel universe, perhaps, might have gone toward basic biomedical research, a common refrain from critics. (Our START-UP colleagues, who profile a different source of funding for biotech innovation every month in the “Capital Matters” column, wrote about one of the NCATS programs, the Therapeutics for Rare and Neglected Diseases, or TRND, a few months ago. You can read it here.)

Our friends at Pink Sheet are all over the NCATS story, and we suggest you follow along. It will require a subscription, but to paraphrase the late Donna Summer, they work hard for the money. So hard for it, honey. Rest in peace, disco queen, and same to you, go-go king. No one loves to love you, baby, more than…

Arena Pharmaceuticals: Wasting little time, Arena announced May 16 it priced a secondary stock offering and grossed $60.5 million just six days after an FDA advisory committee voted 18-4 in favor of Arena’s weight-loss drug lorcaserin. Arena sold 11 million shares at $5.50 per share, although shares reached as high as $7.02 on May 11, the day of the committee vote. Shares closed May 16 at $5.67. The vote doesn’t guarantee approval of lorcaserin, but it’s a notable reversal. The panel voted down the drug in September 2010, largely due to data that showed an increase in tumors in rat studies. A reassessment of that data, plus new information on the tumors’ causes, reassured the panel this time around that the cancer risk is negligible. Obesity drugs need to meet only one of two criteria set out in FDA’s draft guidance on weight management products: they either must provide a 5% weight loss in 35% of patients on-treatment and twice as many patients on-treatment as on-placebo; or there must be at least a 5% difference between weight loss in the active-product and placebo groups. Lorcaserin met the former standard, but not the latter. (More details about the panel’s decision is here, courtesy of our Pink Sheet colleagues.) Lorcaserin’s PDUFA date is June 27, so Arena’s new cash reserves give it a boost for commercialization, although in a deal expanded just before the committee vote, Eisai owns commercial rights to the drug in the US, Mexico, Canada and Brazil. Underwriters Jeffries & Co. and Piper Jaffray & Co., with help from BMO Capital Markets, have the option to sell up to 1.65 million additional shares. Two other sponsors of obesity are vying for FDA approval. Qnexa from Vivus has a PDUFA date of July 17, and Orexigen Therapeutics, which agreed to conduct a cardiovascular outcomes trial, hopes to re-file Contrave for approval in 2014. -- Cathy Dombrowski and Alex Lash

OncoMed Pharmceuticals: One of the first cancer stem cell companies, OncoMed is now hoping to cash in on the cancer stem cell hype (which just happens to be the subject of a forthcoming feature in Start-Up magazine). After all, OncoMed, founded in 2004, is a relative graybeard of the field, with a couple of alliances under its belt and three programs in the clinic. Tiny Verastem notched a $63 million IPO in late January without anything yet in the clinic, and another company, Stemline Therapeutics, filed its IPO papers in April. OncoMed hasn’t set terms yet, but it won’t be a surprise if it aims sky-high. Venture backers have put at least $170 million into the company since its founding, most of it coming in a massive Series B in 2008. There are seven venture funds and one strategic investor with stakes of 5% or more in OncoMed, led by U.S. Venture Partners (17%), Latterell Venture Partners (12%), and GlaxoSmithKline (12%), which also owns options for worldwide rights to two OncoMed antibodies. GSK can exercise the options at either the end of Phase I or Phase II proof of concept trials. OncoMed owns exclusive rights to its lead compound, the antibody demcizumab, and is currently testing it in two Phase Ib trials, both in combination with chemotherapy agents.  -- A.L.

Egalet: In its second incarnation, Danish pain management firm Egalet Ltd. has raised $14.3 million in Series B financing. The firm restructured and recapitalized in 2010, shedding its cardiovascular program to focus on its abuse-resistant Egalet technology for the development of opioid and non-opioid pain medications.  The company is preparing to advance lead candidate EGP066, an extended-release form of morphine, into Phase III studies. The Egalet platform creates tablets that erode at a controlled rate to produce prolonged- or delayed-release delivery. It also prevents the drug ingredient from being easily extracted, which deters drug abusers from chewing, snorting, or injecting it. First-time investor CLS Capital joined returning shareholders Atlas Venture, Omega Funds, Sunstone Capital, and Index Ventures, which committed to a two-tranched €2 million ($2.6 million) Series A round in August 2010.  Prior to the recap, Egalet A/S had raised at least $60mm in venture financing. In December 2009, it out-licensed its CV compound, the beta blocker EGP042, to RedHill Biopharma. The firm has a second formulation technology, Parvulet, that creates a soft pudding-like substance that can be eaten with a spoon. Farther down its pipeline are extended-release versions of oxycodone, hydrocodone, and hydromorphone. -- Amanda Micklus

Dynavax Technologies: Like Arena, Dynavax is a veteran biotech hoping to soon celebrate its first product launch, with the hepatitis B vaccine Heplisav now before the FDA for review. Dynavax tapped the public markets, raising $74.4 million on May 9 before deductions and expenses. It sold 17.5 million shares at $4.25 apiece, adding more than 10% of its share count to the outstanding base. If that’s not enough dilution, underwriters have the option to sell another 2.6 million shares. What’s more, Dynavax also announced just before the share sale that longtime CEO Dino Dina will step aside for a more commercially experienced successor. He’ll remain CEO until the search is complete, and he’ll also keep his board seat, Dynavax said. Investors didn’t take kindly to the CEO news or the offering, which was priced 17% below the previous day’s close of $5.09. Shares have continued to decline, closing May 17 at $3.76. But Dynavax needs the cash, as it owns full rights to Heplisav, for now at least, and says it intends to launch it independently in the US. Historically, biotechs that keep worldwide or at least US rights to their first commercial products fare better in the long term, but a successful launch is no guarantee. Dendreon’s prostate cancer treatment Provenge (sipuleucel-T) and Human Genome Sciences’ breakthrough lupus drug Benlysta (belimumab), both hailed as welcome additions in under-served indications, have faltered badly out of the gate. That's led to new management for Dendreon and, for HGS, a hostile takeover bid from marketing partner GSK. -- A.L.

Image courtesy of flickr user brain_blogger. How appropriate.

Financings of the Fortnight Puts On The Weight

Was FOTF the only one to notice that anti-obesity drug maker Vivus aced its FDA advisory committee review on Feb. 22, one day after Mardi Gras?

It didn't take long for the company to digest the impact: one week later, it went to the public markets for a stock sale, which we describe below. And Vivus' two main competitors, both of whom have had the FDA send their dishes back to the kitchen at one time or another, saw action as well. Arena Therapeutics spiked briefly to $2.11 a share on Feb. 23 with about 8 times its typical trading volume, only to drop back down under $2. The firm also triggered a sale of 14.4 million shares to Azimuth Opportunity that netted nearly $25 million; not exactly selling high. It's part of a $50 million line of credit opened last November that lets Arena put a sale of stock to Azimuth at a pre-arranged discount.

Arena is next up at FDA, with an advisory committee hearing scheduled in the second quarter, but by then Vivus could know its fate, with a PDUFA date of April 17. Orexigen Therapeutics' shares have traded as high as $4.37 a piece since the good Vivus news, their highest in about a year. So far Orexigen hasn't made any related financing moves, but it did announce Thursday that it would slim down at its San Diego-area headquarters.

Meanwhile, the prospect of a new fat-fighting drug finally reaching the market has generated takeover talk as breathless as Dom DeLuise trying to run up a flight of stairs. Potential buyers might want to wait to see if FDA requires a pre-marketing cardiovascular outcome study. Our Pink Sheet colleagues noted recently that the advisory committee seemed satisfied with the prospect of a post-marketing study, but as we all know, it's not unusual to see a gap between the ad-com opinions and final FDA rulings. An overview of cardiovascular assessments by the Endocrinologic and Metabolics Drugs Advisory Committee in late March could shine more light on what extra clinical hoops the three drugs -- Vivus' Qnexa, Arena's Lorquess and Orexigen's Contrave -- will have to pass through.

If any of those drugs actually work, perhaps we'll pay more attention to what Shakespeare called the food of love than the love of food. Which brings us to our off-topic financing of the fortnight: our favorite pending IPO is Fender Musical Instruments Corp., which wants to go public after 65 years of shredding, twanging, picking and reverberating. We wouldn't care if those shares were a good investment as long as owning them made us sound, at least in our mind, just a little bit like this guy. Or perhaps more appropriately, The Ventures. This is, after all...

Vivus: Following the old adage to strike while the FDA is hot, Vivus parlayed the green light an FDA advisory committee gave its Qnexa (topiramate/phentermine) weight-loss drug into a $202 million public offering on Feb. 29. The San Francisco Bay Area company sold 9 million shares at $22.50 a piece, and underwriters led by J.P. Morgan could sell up to 1.35 million more. The funds will go in part to build a sales force for Qnexa, which has navigated a tortured path to date. It received strong backing last month from the FDA's Endocrinologic and Metabolic Drugs Advisory Committee, a 20-2 vote, in part because panelists were assured that Vivus would be held accountable if it didn't conduct a post-marketing cardiovascular outcomes study. The near-unanimous vote more than doubled the price of Vivus shares, from $10.55 on Feb. 22 to a high of $25.14 on Feb. 27. It closed March 6 at $21.52. Rejected by the FDA in 2010, Vivus resubmitted its marketing application last October with a curtailed patient population, excluding women under 55 to eliminate the chance of the topiramate component of the drug causing birth defects. If approved, Qnexa  initially will be indicated for obese patients with a body mass index (BMI) over 30 or overweight patients with a BMI over 27 who do not have child-bearing potential, and who have at least one comorbidity such as high blood pressure, type 2 diabetes, or abdominal obesity. Qnexa's PDUFA date is April 17. -- Staff reports

Aragon Pharmaceuticals: After mulling an IPO and a partnership, cancer drug maker Aragon Pharmaceuticals opted for door number three: a $42 million Series C round that CEO Richard Heyman said strengthens the company if it eventually chooses to pursue either of the first two. The Topspin Fund, the personal investment vehicle of a small group of high-net-worth individuals including billionaire hedge fund manager Jim Simons, led the round, investing alongside existing backers Aisling Capital, OrbiMed Advisors and The Column Group. Along with former Honeywell executives Leo Guthart and Steve Winick, Simons also manages $213 million fund Topspin Partners, but the three chose to invest in their sidecar fund instead; Guthart said the primary fund is “fully invested.” There are personal connections behind the scenes: Simons also is an investor in OrbiMed's funds and Guthart is treasurer of Cold Spring Harbor Laboratory, where Aragon co-founder Charles Sawyers is on the board of trustees. Aragon intends to complete Phase II work on ARN-509, a candidate for castration-resistant prostate cancer that eventually could compete with Johnson & Johnson’s Zytiga (abiraterone) for the sub-market of men in whom prior treatments have failed. It also intends to bring a selective estrogen receptor degrader into Phase I for breast cancer. If Aragon aims for an IPO, it hopes Topspin's experience investing in public companies could lead the firm to cross over and take a piece. Having insiders take part in an IPO has practically become a prerequisite for going public these days. -- Paul Bonanos

4s3 Bioscience: An investment firm connected to one of the world’s wealthiest families has supplied a $20 million Series A round to 4s3 Bioscience, a start-up investigating new treatments for rare muscular disorders. KLP Enterprises, a trust managed by the family office of Karen Pritzker and Michael Vlock, made the investment. The Pritzker family’s legacy includes ownership of the Hyatt hotel chain, electric and industrial equipment holding company Marmon Group, and credit bureau TransUnion. KLP’s investment builds on a seed round from Genzyme Ventures in 2008, as well as grant funding from Massachusetts Life Science Center, the Muscular Dystrophy Association, National Institute of Health and the HHS Therapeutic Discovery Project. 4s3 is developing drugs that use an antibody technology to deliver muscle-building proteins and enzymes into cells, which could yield treatments for muscular dystrophy and other disorders affecting skeletal muscle. The start-up is housed at the University of Massachusetts-Boston’s Venture Development Center, and its founders are working closely with KLP drug development subsidiary Alopexx Enterprises as they build the company. -- P.B.

Amicus Therapeutics: The developer of treatments for lysosomal storage disorders and other rare diseases topped off its public stock offering March 7 with underwriters taking their full over-allotment, making a total of 11.5 million shares sold at $5.70 a share for net proceeds of $62 million. The firm, whose tale was told in the film Extraordinary Measures (with Brendan Fraser playing CEO John Crowley), last raised cash when it sold worldwide rights to its lead drug Amigal (migalastat HCI), for Fabry disease, to GlaxoSmithKline for $60 million upfront in October 2010. Part of that payment bought GSK a 19.9% equity stake in Amicus at $4.56 a share, at the time a 15% premium. Announcing the GSK deal, Crowley said it would sustain Amicus at least until U.S. approval of Amigal, which has not proved out. The drug is currently in Phase III in a monotherapy trial co-sponsored by Amicus and GSK and in a separate combination therapy trial that is still recruiting patients. -- A.L.

This fortnight's column powered by Mavis Staples.

Deals of the Week: Super Sunday Edition

The news from around the globe wasn’t pretty this week, as uprisings in the streets coincided with dangerous weather, spreading misery from Cairo to Lake Shore Drive to northern Queensland. And while Deals of the Week is sensitive to the gravity of these situations – unlike a certain fashion designer who attracted plenty of attention for putting his foot in his mouth – we’re not above a bit of diversion as the weekend approaches.

Neither are at least a hundred million Americans, who will be parked in front of their TVs on Sunday. Whether your preference runs toward bratwurst and cheese curds or a Primanti Bros. sandwich with fries on it, or whether you just like expensive commercials and the Black Eyed Peas, chances are you’ll be watching.

This year’s Super Bowl matchup got DotW thinking: What were the crucial decisions that got the Steelers and Packers to the big game? Was it a deal, or even a no-deal, and is there a lesson that pharmas could draw from what they did? Like, say, keeping one potentially lucrative compound in-house while partnering a later-stage drug, the Pack sensed it was time to bet on Aaron Rodgers and trade aging Brett Favre in 2008, allowing their young star to emerge. The Steelers, meanwhile, dealt troubled asset Santonio Holmes to the Jets, despite his potential for delivering more value in someone else’s hands, and instead looked to their pipeline for standout deep threat Mike Wallace.

Like drugs in the clinic, the players’ performances are only somewhat predictable, and require enormous financial commitments with no guarantees. But a well-timed deal can leave exiting venture investors celebrating like B.J. Raji after his fourth-quarter pick against the Bears, while mounting discontent can get a biotech subsidiary pushed out the door like Wade Phillips.

With our metaphor in mind, admittedly stretched beyond belief like Dwight Clark's fingertips as he brought down The Catch, please enjoy this super edition of…

Alexion Pharmaceuticals/Taligen Therapeutics: Announced Jan. 31, the union of Alexion and Taligen is designed to be complementary in more ways than one. Both companies have designed drugs that inhibit pathways in the complement system, a subset of the body’s innate immune system in which blood-borne proteins attack pathogens. Alexion, which has thus far specialized in orphan diseases, said it would pay $111 million upfront plus unspecified milestone payments for Taligen, whose lead program has been studied for ophthalmology as well as other disorders. Taligen had been planning to partner its lead program, TT-30, for age-related macular degeneration while keeping it in-house for orphan indications such as atypical hemolytic uremic syndrome and paroxysmal nocturnal hemoglobinuria, two rare disorders linked to deficiencies in complement factor H. Cheshire, Conn.-based Alexion already markets a complement inhibitor for PNH, Soliris (eculizumab), although it affects a different pathway. Robert W. Baird analyst Christopher Raymond speculated that TT-30 could replace Soliris as Alexion’s lead program. The deal represents a payday for Taligen’s venture investors, which had supplied at least $40 million to the Cambridge, Mass., startup since 2004. They include Sanderling Ventures, Clarus Ventures, Alta Partners and High Country Venture. -- Jessica Merrill & P.B.

AstraZeneca/WellPoint: A new agreement between Britain’s second-largest pharma and US-based health benefits provider WellPoint is designed to give AstraZeneca deeper insights into “real world data” surrounding post-market outcomes for its medications. AstraZeneca struck a four-year deal to harvest information from WellPoint’s clinical outcomes research unit HealthPoint, which will deliver data concerning cost effectiveness, clinical effectiveness and comparative effectiveness. That information could prove influential as AZ negotiates with payers to cover new pharmaceuticals. The agreement will focus especially on medications for chronic disorders including diabetes, cardiovascular disease and dyslipidemia, and will draw from a database covering 36 million enrollees in 16 US states. Specific terms of the contract weren’t disclosed, although the companies said the agreement could be extended beyond its initial term. The agreement could also be used to identify areas of unmet need in order to spur research and development initiatives, according to AstraZeneca executive James Blasetto. Although AZ has contracted WellPoint to study specific disorders before, their latest deal is the broadest yet. -- Cathy Kelly & P.B.

Allergan/Map Pharmaceuticals: Botox marketer Allergan paid $60 million upfront for rights to co-promote Map Pharmaceuticals’ orally inhaled migraine therapy Levadex, which has completed Phase III clinical trials and could be ready for an NDA submission in the first half of 2011. The deal value could increase to $157 million if milestones tied to Levadex’s approval in additional indications such as adolescent migraine are met. The first order of business is getting approval for acute migraine; while the companies establish joint steering committees, Map retains ownership of the NDA, which also means it bears the costs associated with the submission. The amount of upfront money is worth noting, given what the deal doesn’t include: Map keeps rights to promote to primary care docs in the US and elsewhere, meaning it ostensibly could capture more value for the product through a series of smart licensing deals. Still analysts and investors were puzzled why Map, which can’t afford the costs of primary-care marketing in a competitive space like migraine, didn’t seek a partner from the get-go that could broaden Levadex's commercial reach to U.S. internists and family-practice docs, as well as physicians practicing abroad. -- Ellen Licking

Valeant Pharmaceuticals International/PharmaSwiss: Focusing its growth almost completely on deal-making, Canadian specialty firm Valeant got off to a quick start this year, announcing a €350 million ($480 million) purchase of PharmaSwiss on Feb. 1. Having said in early January that Valeant planned at least five ex-U.S. deals this year, including one of significant size, CEO Michael Pearson looks to have made a smart move in acquiring the privately-held generics and over-the-counter products firm. PharmaSwiss has averaged growth rates of 20% the past five years and with its management team staying, the company will transition into Valeant’s European base of operations a year after Valeant expanded via last year’s $3.3 billion reverse merger with Biovail. In addition to tax benefits from operating in Switzerland, PharmaSwiss offers its status as partner of choice for companies such as Pfizer, Eli Lilly and Amgen that want to commercialize products in Eastern Europe without adding infrastructure. Pearson said PharmaSwiss will continue that practice under the Valeant umbrella. Separately, in a deal announced Feb. 3, Valeant acquired all U.S. and Canadian rights to topical herpes drug Zovirax (acyclovir) from GlaxoSmithKline for $300 million. -- Joseph Haas

Apeiron Biologics/Merck KGaA: Austrian immunotherapy firm Apeiron has licensed a fusion protein consisting of interleukin-2 linked to a GD2 antigen-targeting antibody from Merck KGaA, and it aims to conduct Phase II/III trials with it. Money from an out-licensing deal struck with GlaxoSmithKline a year ago enabled Apeiron to snap up the product, which CEO Hans Loibner said he has kept tabs on for some time. Apeiron believes it has the knowledge necessary to conduct trials in the very small numbers of children who develop neuroblastoma, and Merck probably recognized that, Loibner said. The immunocytokine has shown preliminary activity in a subset of children with neuroblastoma in a Phase II study. Apeiron now has full development and commercial rights and would like to take the product to market, but that decision may change, Loibner added. The companies did not disclose financial terms of the deal. Apeiron's previous deal came in October 2010, in-licensing a recombinant human superoxide dismutase (SOD) from fellow Austrians Polymun Scientific, which Loibner believes has potential as a dermatological for the treatment of skin damage associated with radiotherapy. -- John Davis

Image of "The Vince" courtesy of flickr user WBUR.