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Orphan drug focus

Highlighting and analysing recent prominent agreements and likely future directions

A doctor out of focus holding up a single pillThis review of deals in the pharmaceutical and biotech sectors covers the top deals announced during March, April and early May 2010.

In this latest period, the downward trend, in absolute numbers of deals, has continued, but of the top 20 set out in the table, 'big pharma' companies have been involved in 12 (60 per cent). This is more than in previous periods, which may reflect an increased focus on mitigating the impending patent cliff in 2011. GlaxoSmithKline (GSK), Pfizer, Merck, Novartis and sanofi-aventis have all done two of the top 20 deals, with Roche and Boehringer Ingelheim inking one each.

In terms of themes, this snapshot of deals highlights three main trends: a focus on rare/niche diseases; increasingly dynamic deal structures, including later stage deals and use of options, and a continued appetite for ribonucleic acid (RNA) targeted (antisense) therapeutics.

As the quest for new products to revitalise portfolios is becoming extremely competitive, more companies are actively targeting indications for rare 'orphan' diseases. The definitions of orphan drugs in the US and Europe differ. In the US, an orphan drug is defined as: "The disease or condition for which the drug is intended affects fewer than 200,000 people in the United States or, if the drug is a vaccine, diagnostic drug, or preventive drug, the persons to whom the drug will be administered in the United States are fewer than 200,000 per year."

In Europe, orphan drugs are defined as: "Medicines for rare diseases - so-called 'orphan' medicinal products - are intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions that affect no more than five in 10,000 people in the European Union, or are medicines which, for economic reasons, would be unlikely to be developed without incentives." In both cases, the incentives include reductions in fees, IP and marketing protection.

Previously, orphan indications were considered too small and niche as pharma companies targeted diseases with large numbers of patients to maximise their returns on investment. However, as new blockbusters are increasingly elusive and the regulatory paths challenging to navigate, the incentives afforded to orphan drugs, to stimulate the research and development of medicinal products for rare diseases, are looking attractive. In terms of trends in orphan drugs, the number of orphan drug designations (ODD) is increasing. According to Bloomberg, in Europe the number of ODDs in the last nine years has increased from 41 in 2001 to 105 in 2009 (50 per cent in oncology indications), with a total of 605 over the period. In the US, the Food and Drug Administration (FDA) granted 160 ODDs in 2009, up from 76 in 2001 and a total of 1,069 for the period.

In the period covered by this article, there are two deals with a focus on orphan drugs or a platform to target rare diseases. Valeant Pharmaceuticals acquired Aton Pharma, which has a series of orphan drugs in its portfolio, for a total of $318m. GSK and Isis Pharmaceuticals are collaborating on RNA targeted therapeutics for rare and infectious diseases. The focus of the deal covers up to six programmes, giving GSK the opportunity to target certain severe diseases in a way that has not previously been possible and giving Isis up to $1.5bn in the event that all six programmes are successful, plus double-digit royalties.

Once they have found attractive drug candidates, companies are making sure that not only do the economics stack up if everything goes according to plan, but that they are not overly exposed if there are some unwelcome surprises. Deal structures are evolving to reflect increased risk sharing; biotechs appear more willing to accept less cash at the start, with the prospect of a bigger potential payout should the drug succeed. Again according to Bloomberg, the use of options is also growing, as companies want to minimise their exposure to the risk of failure by placing increasing emphasis on back-loaded commercial milestones and smaller upfront fees.

In the past, option deals were more common in earlier stage deals, where the chance of success is more difficult to predict. However, this trend is now expanding and is being seen in more deals with late-stage compounds, reflecting the increasingly challenging regulatory and reimbursement environments.

In the period under review here, there were two deals announced, and one completed, in which the licensee took an option. Two of these are later stage deals. Novartis' deal with Transgene for a non-small cell lung cancer vaccine (TG4010) is in phase II. Transgene has sold Novartis an option on rights to TG4010 for only $10m, but Transgene could receive a further €700m ($952m) if Novartis exercises the option and the product hits the agreed milestones.

During this period, GSK closed its deal with Nabi for NicVax, a nicotine addiction vaccine in phase III (this was announced in the Deal Watch article on page 15 of the March/April 2010 edition). The deal could be worth a total of $500m to Nabi, but only $40m was received up front, with the rest back loaded depending on key milestones being achieved.

In addition to the Isis Pharmaceuticals/GSK deal for rare and infectious diseases, there were two further deals in this period focusing on RNA targeted therapeutics and associated technologies. RNA interference (RNAi) is an antisense mechanism that involves using small interfering RNA (siRNA) to "silence" genes and inhibit production of specific disease-causing proteins. Despite much early enthusiasm, the RNAi area still has many challenges to overcome, including the delivery and uptake of the potential therapeutics into the target cells.

As with many other new technologies, there are cycles in deal flow. First, people become excited by the technology and its potential; then there is a slowdown in deals as hurdles are encountered, followed by a way forward for the wary few. In terms of current status in this technology cycle, many of the RNAi companies' share prices are down more than 40 per cent compared with two years ago. While the sector is recalibrating, it is still recognised as being worthy of investigation.

One of the deals in the RNAi area is the acquisition of Cequent Pharmaceuticals by MDRNA for $46m. This deal brings together MDRNA's RNAi-based drug discovery and development capabilities with Cequent's novel delivery technology for RNAi-based therapeutics. In addition, the acquisition expands MDRNA's oncology pipeline, with a product in development by Cequent for Familial Adenomatous Polyposis (FAP).

Also on the theme of RNAi delivery, Tekmira Pharmaceuticals is collaborating with Pfizer to evaluate Tekmira's stable nucleic acid-lipid particle (SNALP) technology to deliver siRNA molecules provided by Pfizer. Tekmira will be responsible for preparing the SNALP formulations and Pfizer will evaluate the formulations in preclinical models. The financial terms of the collaboration have not been disclosed.

What trends are likely for the rest of 2010? Roche and Boehringer Ingelheim have both gone on record as stating that they are actively searching for new opportunities. Roche has said that it intends to do as many deals in 2010 as it did in 2009 (65 in total), mainly licensing as opposed to acquisitions. So watch this space.

In terms of trends in therapeutic areas, seven of the top 20 deals are in cancer products or platforms. This trend is set to continue, given the focus on oncology in both the US and European ODDs in 2009.

 

Licensor/Partner or Acquirer

Product/Technology 

Development status

Headline $m

Isis Pharmaceuticals/GSK rare diseases - antisense delivery platform Pre-clinical 1,500
Transgene/Novartis cancer vaccine NSCLC P2 960
Cellzome/GSK inflammatory disease Platform 690
Ariad/Merck Ridaforlimus (for cancer) – restructured deal P3  564
Array BioPharma/Novartis ARRY 162 and other MEK inhibitors P1 467
Glenmark/sanofi-aventis vanilloid receptor (TRPV3) antagonist molecules for chronic pain P1 345
Acrux/Eli Lilly Arixon - for hypogonadism NDA submitted 335
CureDm/sanofi-aventis Pancreate : T1 and T2 diabetes pre-P1 335
Mersana Therapeutics/Teva XMT 1107 - anticancer fuma-gillin analogue conjugate pre-P1 334
Aton Pharma/ Valeant Pharmaceuticals ophthalmology/orphan drugs acquisition - marketed/pipeline 318
AMAG Pharmaceuticals/ Takeda feraheme (ferumoxytol) - for iron deficiency anaemia MAA planned 280
Agios Pharmaceuticals/Celgene cancer metabolism research platform Pre-clinical - with option 250
Medingo/Roche insulin delivery patch Acquisition - production scale up 200
Serenity Pharmaceuticals/ Allergan SER-120 for nocturia (nasal admin) P3 165
Ipsen/Rhythm Pharmaceuticals Peptide therapeutics for GI and obesity Pre-clinical 80
Protox Therapeutics/ Kissei Pharmaceuticals PRX-302 for BPH and prostate cancer P2 75
Micromet/Boehringer Ingelheim BiTE antibodies for multiple myeloma Pre-clinical 73
GTx/Ipsen Toremifene for prostate cancer P3 58
Cequent Pharmaceuticals/ MDRNA RNAi discovery and delivery platform Acquisition - pre-P1 46
Tekmira Pharmaceutials/Pfizer delivery of siRNA Pre-clinical not disclosed*

*Teva's acquisition of Ratiopharm in March 2010 for $3.6bn has not been included in this table as its size skews the summary for the period. Instead Pfizer's deal with Tekmira Pharmaceuticals has been included (although financial terms were not disclosed), as it forms part of the story about the continued quest to solve the siRNA puzzle.

 

The Author
Bridget Lacey is a consultant at Medius Associates

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

7th July 2010

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