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Biologics buoyant

Highlighting and analysing recent prominent agreements and likely future directions

Life ring floating in the seaThe summer months are traditionally quieter, but this year there has been some active deal making during July and August 2010, the period covered in this article. Three of the deals are amendments to existing relationships and almost half of the deals reported are based on biological therapeutics or technologies for the discovery of new biological entities. This continues the biologics trend noted in previous Deal Watch reviews.

GSK activity
GlaxoSmithKline (GSK) has had a particularly busy time in closing transactions recently, with five deals announced in this two-month period spread across several therapeutic areas. Three of the deals, with Amplimmune, FivePrime Therapeutics and Genmab, focus on biologics. In the Amplimmune deal, for an upfront payment of $23m and up to $485m in milestones, GSK gains access to Amplimmune's reclinical stage PD-1 targeting therapies. These therapies may be effective in cancer, immunology and infectious disease indications through modulating the immune response. The main focus of this strategic alliance is AMP-224, Amplimmune's Fc-fusion protein that blocks the interaction between the PD-1 and B7-H1 proteins. This interaction in part contributes to the ability of many cancers and chronic infectious diseases to evade and suppress the immune system.

The biologics drug discovery alliance with FivePrime Therapeutics concerns sarcopenia, cachexia and other skeletal muscle disorders. For approximately $15m in upfront payments, GSK will gain access to FivePrime's proprietary collection of secreted proteins and transmembrane receptor proteins. While FivePrime will conduct high-throughput screening to identify new drug candidates, GSK will have an option to license each drug target or candidate exclusively and take sole responsibility for subsequent development and commercialisation.

In the small molecule area, GSK has paid $15m to exercise its option for an exclusive licence to develop and commercialise a novel, systemic antibiotic derived from Anacor's boron chemistry platform. Meanwhile, in its fifth deal of the period and for an upfront payment of £10m, GSK has taken a non-exclusive licence to Vectura's dry powder drug formulation patents for two late stage development compounds in its respiratory pipeline.

Alliances
Like GSK, and on the theme of new drug discovery to bolster early stage pipelines, Roche, Genentech, Merck and Astellas have all entered into strategic alliances with partners holding discovery platforms. Aileron Therapeutics has signed a broad alliance with Roche worth a headline $1.1bn to develop new drug candidates against up to five undisclosed targets in Roche's key therapeutic areas, including oncology, virology, inflammation, metabolism and CNS. This deal is focused on Aileron's Stapled Peptide technology and is the company's first industry collaboration guaranteeing at least $25m in technology access fees and R&D support.

The Astellas deal with Regeneron is an extension and amendment to an existing six-year agreement signed in 2007 providing Astellas with a non-exclusive licence to Regeneron's VelocImmune human monoclonal antibody discovery technology. Under the original agreement, Astellas made licence payments of $20m per annum. The new licence agreement provides Astellas with non-exclusive access to Regeneron's discovery platform until 2023 for an upfront payment of $165m, with a further $130m payment in 2018. This alliance does appear to have been productive for Astellas to date, with approximately 20 antibody projects ongoing that have been discovered using the VelocImmune technology.

As is often the case for early stage and many other deals, there is little information on royalty rates payable for these drug discovery agreements, other than reference to mid-single digit royalties for the Seattle Genetics/Genentech and Regeneron/Astellas deals. The Alectos/Merck and FivePrime/GSK announcements refer to 'tiered royalty' payments on net product sales.

Late stage
At the other end of the development pathway, Eisai recently signed a $1.37bn deal with Arena Pharmaceuticals for exclusive US rights to commercialise Arena's New Drug Application (NDA) stage drug Lorqess (lorcaserin) for obesity and weight management. Under the terms of the licence, Eisai paid $50m upfront to market and supply lorcaserin in the US. Arena will also receive $90m in payments on regulatory approval and delivery of product launch supplies and will sell product to Eisai at a purchase price ranging from 31.5 to 36.5 per cent of Eisai's net product sales, depending on sales levels.

The deal was announced on July 1 but, on September 16, the US Food and Drug Administration (FDA) Endocrinologic and Metabolic Drugs Advisory Committee voted nine votes to five against marketing approval for lorcaserin. The report states that the available data on the drug did not adequately demonstrate its potential benefits over risks to allow marketing approval. Although potential safety problems were known about lorcaserin, the panel's main concern, apparently, was that high doses of the drug increased the risk of certain cancers in rats. While advisory committees provide recommendations to the FDA, it is the agency that makes the final decisions.

The agency was scheduled to complete its review of the lorcaserin NDA on October 22, 2010, as this magazine went to press. It is apparent that the developers of obesity medications are facing significant challenges, probably not helped by the highly publicised safety concerns and issues associated with some previously popular diet drugs, such as Meridia and the fen-phen combination that was linked to heart valve damage.

One deal of note during this period was the entry of Bayer Healthcare's dermatology business, Intendis, into the aesthetic dermatology area. Intendis has taken rights to Kythera Biopharmaceuticals' phase II stage product, ATX-101, outside the US and Canada in a deal worth $373m, including an upfront payment of $43m. ATX-101 is a first in class, injectable, adipolytic agent being developed for minimally invasive reduction of localised fat under the chin (submental fat).

It is based on an endogenous molecule which has selectivity for adipocytes and is rapidly cleared. The licence with Intendis includes all potential indications for ATX-101 outside North America and Kythera will receive tiered double-digit royalties based on net sales in the Intendis territories.

This is an interesting deal for Intendis, as its focus until now has been on the development and marketing of topical therapies for skin disorders, including treatments for eczema, psoriasis, acne, rosacea, haemorrhoids and fungal skin infections. ATX-101 provides the opportunity for the company to enter the rapidly growing market of minimally invasive, non-surgical facial rejuvenation. The reduction of facial fat deposits to restore and reshape the jawline remains a significant unmet need; currently there are no FDA approved drugs to reduce excess localised fat.

 

Licenser/Partner or Acquirer

**Product/Technology

Development status

Headline ($m)

Arena Pharmaceuticals/Eisai

Lorcaserin - obesity/weight management (US)

NDA 

1,370

Aileron Therapeutics/Roche

Stapled Peptide technology – various therapeutic areas

Discovery platform

1,100

Seattle Genetics/Genentech 

Antibody-drug conjugate (ADC) technology – oncology

Discovery 

900

Quark Pharmaceuticals/Novartis QPI-1002 - siRNA for acute kidney injury

Phase II 

670

Amplimmune/GSK

AMP-224 (PD-1 targeting therapies) – oncology/immunology

Preclinical 

508

Intellikine/Infinity Pharmaceuticals

INK1197 and other PI3K inhibitors – inflammation/oncology

Preclinical 

489

Kythera Biopharmaceuticals/Bayer Intendis ATX-101 - adipolytic agent (ex US, Canada)

Phase II 

373

Knopp Neurosciences/Biogen Idec KNS-760704 (dexpramipexole) - ALS Phase II  345
*Regeneron/Astellas VelocImmune technology (MAb discovery) Discovery platform  295
Alectos Therapeutics/Merck O-GlcNAcase modulators - Alzheimer's Disease Discovery  289
*Genmab/GSK Ofatumumab – autoimmune indications/oncology Phase II 141
FivePrime Therapeutics/GSK Protein discovery platform – skeletal muscle disorders Discovery platform  139
*Anacor/GSK GSK '052 – boron-based systemic antibiotic Preclinical  84+
Cornerstone Therapeutics/Targacept  Alpha-7 and other nicotinic receptor targeting compounds Preclinical  76
Osteologix/Servier NB S101 (strontium malonate) – osteoporosis/bone disorders (ex US) Phase II  59
Vectura/GSK Dry powder inhalation technology - respiratory Technology platform  52 
Kamada/Baxter Glassia (liquid Alpha-1 Antitrypsin; AAT) – AAT deficiency (US, Canada, Australia and New Zealand)  FDA approved 45
Marina Biotech/Cypress Bioscience Carbetocin (nasal oxytocin analogue) - autism Phase I  28
Oxford Biomedica/Emergent BioSolutions Prime boost technology - vaccines Technology platform 21
Depomed/J&J Acuform gastric retentive technology - diabetes Drug delivery technology 10+

  
The Author
Jill Ogden
is a consultant at Medius Associates

To comment on this article, email pm@pmlive.com

6th January 2011

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