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Regional plans

Highlighting and analysing recent prominent agreements and likely future directions

World jigsawThis latest review of key deals in the pharmaceutical and biotech sectors focuses on those announced in September and October 2010. This period has been one of mixed activity and fewer licensing deals reported over the period. Four of the deals are equity investments/acquisitions and no less than seven of the deals reported are regional deals rather than global. Early stage and platform agreements also feature heavily, again reflecting the focus on biologicals that was evident throughout 2010.

Strategic initiatives
Of course, the main headline-grabbing deal for this period was Pfizer's acquisition of King Pharmaceuticals. This agreement has given the company access to King's range of pain products, thus boosting the US portfolio in the immediate and short term. With the Lipitor patent expiry still looming, Pfizer is very busy closing deals, its transaction with Biocon signalling another positive move to gain access to marketing rights to biosimilars. Under the terms of this agreement, Pfizer gains commercialisation rights to Biocon's insulin and insulin analogue products (recombinant human insulin, Glargine, Aspart and Lispro).

Reflecting another visible trend this period, the deal is not exclusive worldwide; there are co-exclusive rights in Germany, India and Malaysia. Biotech companies have often sought to retain co-promotion rights and this retention of certain markets reflects Biocon's strength in India and Malaysia. Interestingly, this moves Pfizer into a directly competitive position with the other key players in this field, notably sanofi-aventis, Eli Lilly and Novo Nordisk.

Clearly Pfizer has a strong focus on downstream products and one of its other deals was to take an equity investment in the Brazilian generic company, Laboratorio Teuto Brasileiro, gaining access to the company's extensive portfolio of branded and generic products. This builds on Pfizer's presence in the emerging markets, as well as strengthening its generics interests.

Cancer target
The last deal announced by Pfizer, which with no financial terms disclosed was not included in the table, is that with MacroGenics. This agreement focuses on the next generation antibody platform and covers a global discovery/development/commercialisation deal for two undisclosed cancer targets.

MacroGenics' Dual-Affinity Re-Targeting (DART) platform technology, which enables the generation of highly stable antibody based molecules that target two different antigens, is clearly popular at the moment as straight after announcing this deal, the company also issued a press release on a similar but broader deal with Boehringer Ingelheim. This latter deal appears far more extensive, as the headline value of $2.1bn is huge. On closer examination, the headline value breaks down to the DART platform technology being deployed to ten different programmes with each programme having an equivalent payback of $210 if there is full commercial success.

Streamlining
Two of the deals concluded in this period fit closely with the current trend for downsizing and streamlining R&D activities. The deal between sanofi-aventis and Covance has allowed sanofi-aventis to cut fixed costs by selling two of its R&D sites while maintaining access to the resources it will need in the future. The $2.2bn terms reflect the long-term nature – ten years – of future potential development contracts. The sites in France and the UK will transfer to Covance and staff employment will remain in place for the next five years. This deal mirrors that put in place with Eli Lilly in the US when Covance bought some facilities in Indiana. This gives sanofi-aventis the flexibility it needs for its future development requirements.

Furthermore, it is not only big pharma companies that are looking to build in future flexibility.  Lundbeck announced that it intended to increase its external collaborations in parallel with some degree of streamlining of its activities.

Then, only weeks later, the company issued its press release for the deal with Genmab. Under this research collaboration agreement, Genmab will create novel human monoclonal antibodies to defined targets. Once generated, Lundbeck will have an option to take these forward into clinical development. Genmab has retained an option to access certain non-CNS indications. Strategically this gives Lundbeck an entrée into antibody therapeutics, which seems de rigueur for all pharma companies these days.

Regional deals
As is evident from the number of footnotes at the end of the table, the standard worldwide, exclusive deal is definitely not the norm for this period. Certainly, with all the buzz about future growth coming from emerging markets it was only to be expected that the deal focus would shift in that direction.

Of those deals where region is expressed, for a company such as Ono Pharmaceutical this has always been its business model, ie to secure product rights for its domestic business. For Acceleron and Shire, it is clear that for orphan drugs it is entirely possible to  market effectively a product with only a limited resource. Therefore it is a logical place for a biotech company to start its own marketing operation in its own territory. A similar rationale applies to the deal between Abbott and Reata where Abbott will be providing the global marketing capability outside the US.

As part of the Institut Merieux group, Transgene would be well placed to be able to address the European market with JX 594 for the treatment of solid tumours. As this is not a GP-based product there is no requirement for a major sales force. Because of the complexity of market access in Europe, it is certainly prudent to appoint local expertise.

Orphan deals
This period is also notable for its lack of blockbuster deals; acquisitions and biosimilars aside, the deals are mostly early stage and for niche or speciality drugs. This is a key area for Shire; its agreement with Acceleron covers not only access to ACE-031, which is in phase IIa, but other activin receptor type IIB (ActRIIB) molecules. Duchenne Muscular Dystrophy (DMD), a fatal muscular disease, has no currently approved treatment. The other orphan disease deal to feature was that of GlaxoSmithKline (GSK) with Amicus, an exclusive worldwide licence to Amigal in phase III development for Fabry's disease. GSK's visions and commitment to rare diseases is clear as part of the deal included an equity investment of $31m, giving GSK 19.9 per cent of the stock. The deal comprised a $30m upfront payment with milestones of a further $170m and double digit royalties.


Licenser/Partner or Acquirer

Product/Technology

Development status

 Headline ($m)

King Pharmaceuticals/Pfizer

Corporate acquisition

n/a

3.6bn

Covance/sanofi-aventis

Development agreement

n/a

2.2bn

MacroGenics/Boehringer Ingelheim

Discovery and development of antibody therapeutics

Discovery

2.1bn

Orexigen/Takeda *

Contrave [naltrexone/bubropion] for obesity - co-development

Pre-registration

1bn+

Zymogenetics/BMS

Corporate acquisition

n/a

885

Synosia/UCB

Licence to SYN 115 and 118 in Parkinson's

Phase II

745

Exelexis/BMS

Licence to TGR5 programme plus collaboration for small molecule ROR antagonists

Early stage

565

Acceleron/Shire **

ACE 031 cell growth modulator in Duchenne Muscular Dystrophy

Phase IIa

500

Anchor Therapeutics/Ortho/McNeil/Janssen

Collaboration to develop GPCR targeted receptor therapeutics

Platform

480

PregLem/Richter

Corporate acquisition


 

461

Reata/Abbott **

Bardoxolone for chronic kidney disease

Late phase II

450

Biocon/Pfizer ###

Biosimlars for human insulin and insulin analogues

Phase III

350

Onyx/Ono Pharmaceutical ***

Carfilzomib for multiple myeloma and ONX 0912 in oncology

Phase I

300+

ImmunoGen/Novartis

Collaboration to develop antibody drug conjugates for cancer

Discovery

245

Teuto Brasileiro/Pfizer

40 percent equity investment in generic company with option on remaining shares

n/a

240

Immune Design/Medimmune

Licence to research, develop and use GLA adjuvants in vaccines for specific indications

Early stage

212

Amicus/GlaxoSmithKline

Amigal for Fabry's disease

Phase III

200

Santhera/Ipsen #

Fipamezole for L-Dopa induced dyskinesia in Parkinson's disease

Phase II

181

Transgene/Jennerex ##

JX 594 for the treatment of solid tumours

Phase II

116

Genmab/Lundbeck

Collaboration to develop human antibody therapeutics in CNS disorders

Platform

 63

Table covers the top 20 deals by headline value where financial terms are publicly disclosed.
Deals are global in extent unless stated otherwise [see below].
*United States, Canada, Mexico    **Outside North America    ***For Japan

#Outside North America and Japan, US rights held by Biovail
##Europe, CIS and Middle East   ###co-exclusive in Germany, India, Malaysia

 

The Author
Sharon Finch is a consultant at Medius Associates

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

20th January 2011

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