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Pharma deals during January 2013

Deal Watch: Major pharma collaborations, acquisitions and agreements in the past month

Pharma deal watchIn this first review of 2013, as normal, we are focusing on the top headline value transactions (where financial terms are disclosed) announced during January.

There is normally a flurry of activity during December to get deals signed up before the end of the year, sometimes leaving us less to report for this month. However, for 2013 this does not seem to be the case. January is also a good opportunity for us to test the water with the predictions made by the Deal Watch team in our annual review of 2012. So it is interesting to see that this month there seems to be something for everyone; licences, acquisitions, NGO deals, orphans, emerging markets plus options and terminations.

Licensing continues but still risk averse
Topping the table this month was the deal announced by Gilead Sciences for access to MacroGenics' DART platform for four undisclosed targets. This is the fourth deal for the DART technology, a bi-specific antibody platform allowing a single molecule to address two different antigens. 

In keeping with the trend not to release the entire asset in the transaction, MacroGenics is retaining both development and commercialisation rights in major markets outside North America, the European Union, Australia and New Zealand. Breaking down the headline, this consists of $30m in licence fees, a possible $85m in pre-clinical milestones and up to $1bn in clinical, regulatory and commercialisation milestones.

MacroGenics has previously made similar deals with Servier, Boehringer Ingelheim and Pfizer, and it appears that Gilead is following a safe path in what is the first pharma deal of 2013 that could be worth more than $1bn.

Table 1: Table of recent MacroGenics deals

Partner / Date

Deal type 

Product / Technology

Value

Pfizer / October 2010

Research collaboration and licence

Two undisclosed cancer targets

Financial terms not disclosed

Boehringer Ingelheim / October 2010

Research collaboration and licence

Immunology, oncology, respiratory, cardiometabolic, infectious diseases

$60m during first 3 years including upfront. Up to $210m for each of 10 programmes. MacroGenics retains co-promotion right in US

Servier / December 2011

Option to obtain an exclusive licence to develop and commercialise MGA271

MGA271 mAb recognises B7-H3 over-expressed in solid tumours in phase I

$20m upfront, $60m in exercise and milestones. A further $390 m in downstream payments and tiered double digit royalties. MacroGenics retains rights in N. America, Japan, Korea, India

Yet more acquisitions
Almost reaching the magic $1bn number at a headline value of $958m, Allergan continued to build its portfolio securing Levadex for migraine from MAP Pharmaceuticals. The deal is not fully closed however as the price agreed is now under scrutiny by some US law firms.

We noted that last year, the women's health field featured again after a long period with very little deal activity. Building on previously reported deals Watson paid $305m ($150m in cash up front and $155m in future milestones) for the Belgian company Uteron Pharma. This acquisition brings with it an IUD for long term contraception (pending approval in Europe and phase III in the US) and Daifert an immunoassay kit for in vitro fertilisation. Watson continues to extend its women's health franchise.

Picking up on several of last year's deal trends, Zhejiang Hisun reported the closure of an exclusive option to access Celsion's Thermodox (phase III) in liver cancer for regional rights to the greater China territory, including Hong Kong and Macau. This deal carried a headline value of at least $125m. 

Often finding a home for late stage assets can be a challenge as there can be a perception that good assets are snapped up early therefore there must be an inherent risk in anything un-partnered past the end of phase II. So the deployment of an option excluding third party access in this case allows Zhejiang Hisun time to determine the real risk before committing further to the product. This deal is for technology development and carries a $5m non-refundable payment. 

In addition, the companies anticipate signing an exclusive option to a licence which brings a $5m option fee and licence terms of a further $15m on exercise of the option; $55m near term milestone payments and $45m sales threshold payments, as well as rising double digit royalties. The option strategy seems very prudent as Celsion has just announced that the phase III study was not successful.

Again using an option to reduce perceived risk, AstraZeneca (AZ) has an option to acquire compounds from Orexo's OX-CLI programme. During the option, AZ will continue to research and evaluate OX CLI in respiratory disease (see table 2).

The deal between Daiichi Sankyo and Amplimmune also contains an option element as part of its collaboration on the first-in-class, pre-clinical fusion protein, AMP 110.

Of course a down side for options is when they are not exercised or taken up, as was the case in the Lilly and Boehringer collaboration with Boehringer electing not to pursue the insulin analogue LY 2605541 under their collaboration agreement.

Table 2: Deals with undisclosed financial values

Licensor

Licensee/ Partner

Deal Type

Comments

Baylor Research Institute

Ultragenyx

Collaboration

Triheptanoin UX 007 in rare and ultra-rare diseases

Debiopharm

Chugai

Licence

Exclusive worldwide licence to FF 284 in oncology

Orexo

AZ

MGA271 mAb recognises B7-H3 over-expressed in solid tumours in phase I

OX CLI programme in respiratory diseases

Pfizer

Labrys Biologics

 Option research evaluation

Out licensing WW rights to RN 307 antibody (binds to calcitonin related peptide) phase II ready

Philogen

Pfizer

 Licence

Armed antibody Dekavil coupled with IL-10 in IBD

VPM

Cevec

 Licence

CMV dense body technology in vaccines

Biological E 

GSK

 JV

Combination paediatrics vaccines

Terminations
Although the active development for Cytos' NIC 002 therapeutic vaccine for smoking cessation had ceased some time ago (phase II failure to meet primary end points reported in October 2009), Novartis has now formally returned the rights to Cytos and written off the asset.  All is not lost however as work continues on the Novartis-Cytos collaboration for CDA106 in Alzheimer's disease.

In a similar vein, Bristol Myers Squibb (BMS) confirmed that it had returned the rights to necitumumab (IMC-11F8) a next generation Erbitux in phase III for non-small cell lung cancer. BMS held rights to North America and Japan leaving Lilly sole global rights. 

Continued NGO involvement
It was noted in our annual review that in the vacuum caused by the lower levels of VC investment, NGOs were stepping up to fill the space.  First in this vein this year, the Wellcome Trust announced the investment of $200m initial capital into Syncona Partners LLP a new evergreen investment company.  Syncona will make investments across healthcare – device, diagnostics and thera-peutics – in support of both early and late stage companies. 

The Wellcome investment was not an isolated case either; the Salk Institute received its largest ever donation – a $42m gift from the Helmsley Charitable Trust given to form the Helmsley Center for Genomic Medicine. This will be a research centre dedicated to the decoding of common genetic factors underlying chronic human disease. 

Early-stage alliances
Following on from the theme we have reported previously, there were some early stage deals this month including alliances between pharma and biotechs and academic institutions. For example, Ultragenyx has in-licensed triheptanoin for long-chain fatty acid oxidation disorders from the Baylor Research Institute.  No financial terms were disclosed.

AZ and Vanderbilt University announced a research collaboration agreement to identify drugs for treating psychosis and other conditions such as Alzheimer's disease and schizophrenia.  Under the agreement, AZ has exclusively licensed rights to compounds developed by the Vanderbilt Center for Neuroscience Drug Discovery (VCNDD) that act on the M4 muscarinic acetylcholine receptor. Vanderbilt will receive an upfront payment, two years research funding as well as success-based milestones and royalties.

Repligen announced the signature of an exclusive worldwide licensing agreement with Pfizer to advance Repligen's spinal muscular atrophy (SMA) programme.

This programme includes RG3039, a small molecule drug candidate in clinical development, as well as backup compounds and enabling technologies. Repligen will receive up to $70m from Pfizer with an upfront payment of $5m and future milestones of up to $65m plus royalties. SMA is an orphan neurodegenerative genetic disease that presents early in life.

Large pharma activity
In our Deal Watch annual review, we focused on those companies that had been particularly active, and one company noted amongst those was Novartis. So it was not surprising to see Novartis' CEO commenting at JP Morgan that there is still an appetite for deals. Since then, it has been announced that Jörg Reinhardt is set to return as director, whether this will have an impact on Novartis' strategy is yet to be seen.

Reflecting the move of companies into the broader healthcare arena, GlaxoSmithKline (GSK)signed up with GI Dynamics to secure access to EndoBarrier for use in diabetes. Financial terms were not, however, disclosed.

Avoiding the headlines?
Counter to the normal practice of publishing the biggest headlines possible, several deals were announced during the month with no values attached, or in the case of the Afraxis-Genentech deal and the Amplimmune-Daiichi Sankyo deal in the table, with only partial release of financial information.

Conclusions
In looking at deals and deal trends we have to be cognisant of the bigger picture. As far back as June 2011, we were speculating on how long the larger companies could sustain their size. Not counting the ongoing cost cutting measures, slimming down seems to be the order of the day. Abbott has spun out its pharma interest into AbbVie and the rumours abound that Pfizer is considering similar steps to streamline its business interests by de-merging, and Novartis may spin out the vaccine business acquired through acquisition of Chrion in 2006. So watch this space.

Licensor acquired / licensee acquirer

Deal type

Product / technology

Headline ($m)

MacroGenics / Gilead Sciences

Licence

Dual-Affinity Re-Targeting (DART) products

1,115

MAP Pharmaceuticals / Allergan

Acquisition

Levadex in migraine

958

Uteron Pharma / Watson

Acquisition

Contraception fertility

305

Syncona / Wellcome Trust 

 

New biotech investment fund

200

Afraxis / Genentech

Global exclusive licence

Compounds against an undisclosed target

187.5*

Ipsen and Inspiration / Baxter

Asset purchase agreement

OBI1

185

BIND Bioscience/ Amgen

Acquisition, commercialisation, development 

Accurin kinase inhibitor nanoparticulate in solid tumours

180.5

Celsion / Zhejiang Hisun

Development option

Thermodox in liver cancer

105

AbD Serotec / Bio Rad

Acquisition

Antibody manufacturer

70

Repligen /  Pfizer

Licence

RG3039 orphan for spinal muscular atrophy

70

Amplimmune / Daiichi Sankyo

Strategic collaboration / option

AMP110 (B7-H4 fusion protein) potential immune modulation therapy for autoimmune diseases

50*

MedPro / Greiner Bio-One

Asset purchase agreement

MedPro's patents for blood collection and infusion products

29.4

Heptares / Cubist

Research and discovery 

New medicines targeting G protein-coupled receptors (GPCRs)

9.5

Savant HWP / National Institute on Drug Abuse

Development grant

18-MC (18-methoxycoronaridine) as a treatment for drug addiction, obesity and compulsive behaviour

6.5

*full financial terms not disclosed

20th February 2013

20th February 2013

From: Research, Sales

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