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Deal Watch September 2016

Abbott, Allergan, Celgene, Moderna, Pfizer and Takeda feature in this month's pharma deals round-up

Medius Deal Watch September 2016Moving into the autumn partnering season, there seemed to be a resurgence of licensing deals in comparison with the M&A activity this month.

Topping the table was the strategic focus on core areas (cardiovascular devices and diagnostics) by Abbott which has led to the divestment of its Optics business to J&J. Originally acquired in 2009 at a cost of $1.4bn this divestment will go some way to help with Abbott's $6bn debt as reported in June.

Going beyond the pill: Verily Life Sciences creates a new diabetes joint venture with Sanofi
Not to be outdone in terms of strategy and reflecting its integrated care approach, Sanofi has formed a new 50:50 joint venture company, Onduo, with Google's life science business Verily. A relative new kid on the block, Verily will be able to combine Sanofi's diabetes skills and expertise with the latest high-tech devices, medicine and software. The companies intend to invest about $500m in the venture, which will initially concentrate on developing solutions for managing type 2 diabetes. It will be interesting to see if other companies follow this approach.

Hogging the headlines …
Featuring in two entries in the September Deal Watch table, Allergan was busy splashing the cash with a $1.7bn acquisition of Tobira Therapeutics, hotly followed by the purchase of Vitae Pharmaceuticals. Taking advantage of the drop in Tobira's market cap following disappointing results from the phase IIb studies in NASH, Allergan still paid a significant amount to secure the business with an upfront fee of $28.35 per share and up to $49.84 per share tied to regulatory and developmental milestones. This acquisition brings a phase I oral DPP 4, evogliptin, and an immunomodulator, cenicriviroc (CVC), for treating non-alcoholic steatohepatitis (NASH).

The Vitae acquisition builds Allergan's dermatology pipeline with VTP-43742, a mid stage, orally active RORγt (retinoic acid receptor-related orphan receptor gamma) inhibitor for the potential treatment of psoriasis, as well as other autoimmune disorders plus VTP-38543 for atopic dermatitis.

However, these were not the only deals Allergan reported, as the company had started the month with the acquisition of RetroSense Therapeutics, a gene therapy start up with the early stage RST-001 programme for the rare vision disorder retinitis pigmentosa (RP). Allergan paid $60m upfront for RetroSense (presume not Vitae?) but no further financial details were disclosed.

Closing on the same day as the Tobira deal, Allergan also paid $50m upfront with milestones to follow to buy Akarna Therapeutics, bringing AKN-083, a preclinical farnesoid X receptor (FXR) agonist also in development for NASH to its portfolio. Under the terms of the deal, Allergan will pay undisclosed regulatory, clinical and commercial milestone fees related to AKN-083. It is not the end though of the shopping spree; as we go to press Allergan announced another deal with AstraZeneca; busy times!

Another company rarely away from the deal headlines is Celgene. This month Celgene acquired the company EngMab paying $600m for the privilege. The lead programme EM801 is a T cell bispecific antibody targeting B-cell maturation antigen (BCMA), which s considered to be complementary to Bluebird bio's CAR T cell therapies targeting BCMA to which Celgene already has access.

Celgene also announced the exercise of its option to ex-US rights to Abide Therapeutics' ABX-1431, endocannabinoid system modulator, for the potential treatment of neurological diseases. Celgene will be responsible for development costs for all indications from phase II clinical trials and beyond. Celgene paid a $20m exercise fee.

Grants making the headlines …
As a rule, the Deal Watch tables do not include grants or government contracts but the Biomedical Advanced Research and Development (BARDA) has been very busy announcing grants with a range of companies for various development projects. The Medicines Co received a BARDA grant of up to $132m for the development of antibiotics against drug-resistant, gram-negative infections. BARDA will provide initial funding of $32m to support a late-stage trial of Carbavance, (meropenem-vaborbactam) and another $100m over five years if options for extending the deal are taken up.

Turning to the battle against the Zika virus, BARDA announced three more grants for vaccine development to Takeda (up to $312m), Moderna [up to $125m] and Sanofi ($43.2m). Takeda will receive almost $20m in preliminary funding over the next 18 months for preclinical research and early stage trials in humans and could get up to $312m to advance through phase III trials and regulatory filing. Moderna Therapeutics has received $8m of the grant to fund early-stage trials of the vaccine and plans to submit an investigational new drug application to the FDA before the end of the year.

In a similar vein Sanofi will receive $43.2m in funding for the mid stage development of a Zika purified inactivated virus vaccine, including its manufacturing, product characterisation and optimisation of the upstream process to increase production yields. The vaccine is being developed by the firm in partnership with the Walter Reed Army Institute of Research under an agreement signed in July.

Regional deals are alive and well!
As headline values for regional deals tend not to top the $100m mark it is not often that these feature in the monthly Deal Watch table. However this month has seen a lot of activity in this space.

India's Sun Pharmaceutical has partnered with Mitsubishi Tanabe Pharma to distribute and market 14 prescription drugs in Japan that Sun recently acquired from Novartis. The majority (11) will be released by the end of 2016, with the rest being launched during 2017.

SciClone has gained exclusive licensing rights to Soligenix's mid stage oral mucositis candidate SGX942 (dusquetide) in South Korea, Vietnam, Taiwan and China, including Macau and Hong Kong. SciClone will make an upfront equity investment of $3m for more than 3.5m shares of Soligenix common stock.

Basilea has granted an exclusive licence for isavuconazole (an iv and oral antifungal for invasive aspergillosis and mucomycosis) to Asahi Kasei in Japan. Basilea received an upfront payment of CHF 7m with further milestones to come of CHF 60m with tiered double digit royalties.

Dr Reddy's has expanded its collaboration with Amgen in India adding three approved products: Xgeva for treating bone metastases, Vectibix in colorectal cancer therapy and Prolia for osteoporosis.

Merck & Co has sold the US and Canadian rights for its Zontivity, or vorapaxar, to Aralez Pharmaceuticals in an asset purchase agreement worth $25m. Zontivity is a protease-activated receptor-1 antagonist indicated for use in combination with daily aspirin and/or clopidogrel to reduce thrombotic cardiovascular events.

Reflecting a long standing business relationship, Aspen paid GSK £180m to acquire Ultiva, Nimbex, Tracrium, Mivacron and Anectinein, plus up to £100m in milestone payments. Aspen is also acquiring rights to the remaining GSK thrombosis drug portfolio.

All quiet on the oncology front - NOT!
The oncology / immuno-oncology field remains an absolute hive of deal activity with companies signing up for a range of different approaches. Firstly reviewing the licences and collaborations:

  • bluebird bio gained access to Medigene's T cell receptor platform for the development of TCR cancer immunotherapy candidates for four indications (not disclosed) Bluebird bio has paid an upfront fee of $15m, milestone payments of $1+ bn plus royalties and R&D funding.
  • Boehringer Ingelheim granted Amgen worldwide rights to BI 836909, a bispecific T cell engager designed to treat multiple myeloma. Amgen will be responsible for clinical development, transfer manufacturing and global regulatory filing. No financial terms were disclosed.
  • Genentech signed an exclusive licence [global excluding South Korea] with Hanmi Pharmaceutical to develop and market HM95573, a pan-RAF inhibitor. Genentech will provide an $80m upfront payment, up to $830m in milestone fees plus royalties on net sales. 
  • At a lower disclosed headline value of $310m BioNTech licensed its mRNA-based cancer vaccines platform to Genentech. The full value cannot be determined as BioNTech received the $310m in upfront and near-term milestone payments, no other financial information was disclosed.
  • With a headline value of $235m Boehringer Ingelheim entered into a collaboration with ViraTherapeutics to develop an oncolytic virus therapy platform. Boehringer also secured the option to acquire ViraTherapeutics after development of VSV-GP. 
  • Janssen granted Tracon Pharmaceuticals the rights to develop two oncology programmes for prostate cancer and haematological malignancies. Under the terms of the agreement, Johnson & Johnson Innovation will make a $5m equity investment in Tracon.
  • Tarveda Therapeutics signed an exclusive global licensing deal with Madrigal Pharmaceuticals to the lead candidate, PEN-866, which emanates from Madrigal's HSP90 drug conjugate oncology platform. Under the agreement, Madrigal receives an upfront payment not disclosed], with milestone fees of up to $163m and royalties on future sales.
  • Pfizer acquired an exclusive licence to OncoImmune's preclinical anti-CTLA4 monoclonal antibody ONC-392.  The deal has a headline value of up to $250m in upfront and milestone fees to OncoImmune.
  • Zymeworks and Daiichi Sankyo finalised a cross-licensing and collaboration agreement to develop proprietary cancer immuno-oncology products. Under the agreement, Daiichi Sankyo will acquire a licence to Zymeworks' platforms to develop a bi-specific antibody therapeutic. Zymeworks will receive an upfront fee, research support, milestones, and up to double digit tiered royalties. In return, Zymeworks is licensing immuno-oncology antibodies from Daiichi Sankyo, in exchange for royalties on sales. No other financial details were disclosed.
  • Fate Therapeutics entered a three year arrangement with Memorial Sloan Kettering Cancer Center to use engineered pluripotent cell lines to develop T cell product candidates. Fate also has an option to license intellectual property which arises from the collaboration.
  • Adaptimmune Therapeutics entered into a collaboration with MD Anderson Cancer Center to develop specific peptide-enhanced affinity receptor T cell immunotherapies in solid and haematological cancers. Financial deal terms were not disclosed.
  • ProNAi Therapeutics agreed an exclusive licence with the CRT Pioneer Fund for PNT737, a highly selective, orally available, small molecule checkpoint inhibitor which is in phase I. Under the agreement, ProNAi paid an upfront of $7m with a $2m tech transfer fee. Additional payments of up to $319.5m are set as milestones with high single to low double digit royalties on sales.
  • A clinical co-operation between Bristol-Myers Squibb and Nektar Therapeutics was closed under which Opdivo [nivolumab] will be evaluated in combination with Nektar's NKTR-214 in phase I/II trials in bladder, kidney and non-small cell lung cancers. The studies will be equally co funded.

There was a lower level of oncology acquisition activity this month with Eleven Biotherapeutics buying up Viventia Bio in a stock transaction valued at $13.5m, resulting in access to the lead product candidates, Vicinium and Proxinium, as well as the pipeline of next-generation TPT drug candidates.

Looking at this month's volume and range of deal activity, it does not seem to reflect the slow down in the number of M&A and licensing deals reported by Evaluate at the European Pharma Licensing Meeting in Brussels. For example in the year to September 2016, the number of licensing deals were around 300 compared to 800 in the full year 2015 and the numbers for M&A were 400 and 600 respectively. The same sort of trend applies to product acquisitions, technology out-licensing and joint ventures. So if the 2016 year to date trend is continued the number of deals this year will be at the lowest level since 2010.

Licensor / Acquired
Acquirer / Partner
Deal TypeCommentsHline
$m
Abbott Medical Optics / J&J
Acquisition corporate
J&J acquisition of Abbott Medical Optics
4,325
Regeneron / Teva
Licence
Fasinumab in P3 for osteoarthritis pain, upfront payment $250m [excludes rights to Japan, Korea and other Asian markets]
1,710
Tobira Therapeutics / Allergan
Acquisition corporate
Upfront $28.35 per share in cash plus contingent value rights of up to $49.84 per share; estimated value of $1.69bn, includes CVC for NASH
1,695
Medigene /Bluebird bio
Licence
Development and commercialisation of T cell receptor (TCR) immunotherapies against four targets, P1 ready, includes upfront of $15m
1,000+
Hanmi / Genentech
Licence
HM95573, a selective fibrosarcoma (RAF) kinase inhibitor targeting solid tumours. Upfront $80m plus $830m in milestones [ex S. Korea]
910
Raptor / Horizon Pharma
Acquisition corporate
$9 per share (21% premium) giving access to Procysbi and Quinsair
800
Arrowhead / Amgen
Licences
2 agreements to develop and commercialise RNAi therapies in CVS disease, upfront payments of $35m, $21.5m in equity plus $617m in option payments
673.5
Vitae Pharmaceuticals / Allergan
Acquisition corporate
Brings a derma pipeline including VTP-43742, an orally active RORγt (retinoic acid receptor-related orphan receptor gamma) inhibitor for psoriasis
639
Cynapsus Therapeutics / Sunovion
Acquisition corporate
Access to P3 APL-130277 a sublingual film of apomorphine in Parkinson's disease; $18 per share (120% premium)
624
EngMab / Celgene
Acquisition corporate
T cell bispecific antibodies that bind simultaneously to a tumour antigen and the T cell receptor (TCR) complex destroying malignant cells
600
Verily / Sanofi
JV
Co-investment to form Onduo combining Sanofi's diabetes expertise with Verily's software, data analytics and devices
500
GSK / Aspen
Asset acquisition
Sale of anaesthetic drugs [Ultiva, Nimbex, Tracrium, Mivacron and Anectinein – excludes US/CA rights]. Aspen paid £180m plus up to £100m milestones
372
BioNTech / Genentech
Licence
mRNA personalised cancer vaccines; $310m upfront and near-term payments
310+
OncoImmune / Pfizer
Option agreement
Exclusive option to ONC-392 a preclinical CTLA-4 candidate
250
Madrigal Pharmaceuticals / Tarveda
Licence
HSP90 drug conjugate programme including lead PEN 866; terms include contingent payments of $163m
249
ViraTherapeutics / Boehringer Ingelheim
Licence
Oncolytic virus therapy platform and preclinical lead candidate VSV-GP (Vesicular Stomatitis Virus (VSV) glycoprotein (GP)); includes right to purchase the company
236
EndoChoice / Boston Scientific
Acquisition corporate
Products and services for specialists treating a wide range of gastrointestinal conditions, $8 per share
210
Ligand / Seelos
Licence
4 programmes including aplindore for CNS disorders. Ligand to receive $1.3m in equity or cash and up to $3.5m if Seelos IPOs with $145m milestones. Royalty range 4 -10%
150
Dermira / Maruho
Licence
Exclusive licence to DRM04 topical anticholinergic for axillary hyperhidrosis; upfront $25m
95
Geron / J&J
Licence
Exclusive worldwide rights to Geron's oligonucleotide backbone chemistry, as well as novel amidates for RNAi
80

18th October 2016

18th October 2016

From: Sales

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