Deals Of The Week: Ikaria/Fibrex, AstraZeneca/Forest, Forest/Nycomed ...

Each week, "The Pink Sheet" presents commentary on some of the week's most interesting business deals, contributed by the editors of the IN VIVO blog. Visit the blog at ¹ http://invivoblog.blogspot.com/ .

It's that time of year when reasonable folk take vacation, so perhaps that's the explanation for the carnival nature of this week's biopharma news. Health care reform continues to draw heated exchanges, particularly as members of Congress hold town-hall style meetings more prone to ranting than reason.

And there was plenty of drama - and confusion - at the circus that was Aug. 13's denosumab advisory committee meeting. (Did you follow our of-the-moment tweets by ² Ramsey Baghdadi and ³ Lauren Smith?) The mighty regulator Richard Pazdur may have received his comeuppance when he tried to change the wording of a question late in the day only to be chastised by the advisory committee chair about FDA's disinclination to do so. Apparently, it doesn't matter that Padzur is FDA.

For the record, we agree with Deutsche Bank's Mark Schoenebaum that the advisory committee results were a huge win for Amgen despite the REMS requirement (⁴ (Also see "Waking Up to REMS (Part 1): Don't Believe the Lack of Hype" - Pink Sheet, 1 Jun, 2009.) Tysabri) and the "no" votes in post-menopausal osteoporosis prevention and treatment-induced bone loss in breast cancer.

To add to the carnival nature of the week, note the reemergence of swine flu hysteria, which has rabbis praying on airplanes to create a flu-free zone over Israel and Indians rushing to purchase masks after the announcement of the first death in that country. There also was the brouhaha over one Florida health department doctor's public rant against Dunkin' Donuts. And of course, who could forget Regis Philbin's tirade about that "turkey" of a pharmaceutical stock, Pfizer, on Fast Money? CNBC's Mike Huckman suggests Pfizer CEO Jeff Kindler and Regis sort things out over a Blue Moon or a Bud Light - or maybe Pfizer can get Philbin's sassy co-host, Kelly Ripa, to explain the pharma's value proposition.

Had your fill of the sideshow that is biopharma? Our antidote may not help, but in case you are wondering, no two-headed writers contributed to the writing of this installment of Deals of the Week.

Ikaria/Fibrex: Ikaria maintained a brisk in-licensing pace with its second deal in as many months and third in under a year, agreeing Aug. 10 to acquire the worldwide license to three investigational fibrin-based peptides from Fibrex Medical (⁵ (Also see "With Second Licensing Deal In A Month, Ikaria Adds To Critical Care Pipeline" - Pink Sheet, 11 Aug, 2009.)). No financial terms of the deal between the two privately held biotechs were disclosed but Fibrex will receive an upfront payment, potential clinical development milestones, and royalties on net sales for any product that reaches the market.

The transaction expands Ikaria's portfolio of investigational critical care drugs and centers on Phase II myocardial infarction candidate FX06, which produced mixed results in last year's F.I.R.E. (Fibrex in Ischemia and Reperfusion Injury) trial. Fibrex's peptides bind to vascular endothelial cells to preserve endothelial barrier function and prevent tissue injury.

In the 234-patient F.I.R.E. trial for reperfusion injury resulting from remedial treatment following heart attack, a 400 mg dose of FX06 produced a statistically significant reduction in the necrotic zone of the infarction but missed the endpoint for significant reduction of left ventricle ischemia. The drug also demonstrated a reduction of two markers of muscle damage, but Ralf Rosskamp, Ikaria's R&D chief, said his company will go "back to the drawing board" with the peptide, including new preclinical research in animal models and formulation changes. Ikaria's goal is to set a clinical development direction for FX06 by the beginning of next year.

Based in Clinton, N.J., Ikaria got into the gaseous messenger molecule space in a 2007 merger with INO Therapeutics, resulting in INO owner Linde Group getting 17 percent equity in the new company. In addition to last September's deal with Orphan Therapeutics, which brought in North American rights to hepatorenal syndrome drug Lucassin , Ikaria last month licensed BL-1040, a Phase I/II candidate for preventing ventricular remodeling following acute heart attack, from Israel's BioLineRx.

AstraZeneca/Forest: In years gone by, practically no big pharma would have signed a licensing deal that didn't include U.S. rights. These days, however, the rise of China, India and other emerging markets is providing more geographic carve-out opportunities for deal-makers. Thus, in Forest Laboratories' tie-up with AstraZeneca, announced Aug. 12, the big pharma gets ex-U.S., Canadian and Japanese co-development and commercialization rights to the specialty pharma's Phase III broad-spectrum antibiotic ceftaroline, in development for the treatment of complicated skin and skin structure infections (cSSSI) and community-acquired bacterial pneumonia (CABP).

Financials weren't disclosed, but for a signing fee, AZ takes on responsibility for development and regulatory approval in its licensed territories and will pay sales-related royalties and milestones to Forest. For AZ, this deal signals the continued importance of emerging markets - especially China - to the company's future growth, and plugs a hole in its anti-infective pipeline, which largely is built around the antibiotic Merrem, the phase II anti-TNF antibody for sepsis, CytoFab, and a number of antivirals.

For Forest, the deal - its second of the week - provides confidence in the approvability of its late-stage candidate and will help boost worldwide sales - both welcome given the patent expiry in 2012 of the company's highest-selling drug, depression and anxiety treatment Lexapro. Although neither AZ or Forest will comment on the deal terms, Basilea's 2005 tie-up with J&J may provide some clues about ceftaroline's partnership economics: although a worldwide deal, it was signed when ceftobiprole was in Phase III and provided Basilea with $25 million up front and up to $310 million in milestones, 75 percent of which are said to be pre-launch.

Forest/Nycomed: Forest's other deal this week was the in-licensing of Nycomed's PDE-4 inhibitor Daxas, which is pending full Phase III results and regulatory approval in chronic obstructive pulmonary disease. U.S. commercialization rights to the program didn't come cheap, costing Forest $100 million up front, plus undisclosed regulatory and commercial milestones. But Forest, which needs to bulk up its pipeline given the pending expiry of Lexapro, likely saw potential synergies since the deal allows the specialty pharma to gain a foothold in the COPD market while developing its own products, the Phase III aclinidium and Phase II oglemilast.

If approved, Daxas adds an additional growth product to Forest's drug stable, which includes Bystolic and Savella.

For Nycomed, the Daxas partnering was a welcome event, given the drug's long and sometimes rocky development path. Initially developed by the German pharma Altana, which Nycomed purchased in 2007, earlier Daxas clinical trials yielded mixed results, forcing the mid-sized European pharma to focus on its use in the most severely ill patients. Moreover, Nycomed has been talking up a partnering event for the drug for months, given its lack of interest in building a U.S. sales force (⁶ (Also see "Nycomed Reviewing Bids For U.S. Partners For Daxas" - Pink Sheet, 25 Mar, 2009.)).

Daxas' partnering might also help bolster investor interest in the company; Nycomed's private equity backers are thought to be mulling a possible initial public offering and may consider the timing suitable given this week's respective debuts by Cumberland Pharmaceuticals and Emdeon on the NASDAQ and NYSE exchanges.

CombinatoRx/Clinical Data: Fresh off its adjustable-stake merger with Neuromed, CombinatoRx is teaming up with Clinical Data to test the latter's preclinical adenosine A2A agonist, ATL313, in a combination treatment for multiple myeloma and other B-cell cancers. There appears to be no upfront payment but CombinatoRx is paying for preclinical and clinical development and Clinical Data retains a co-development opt-in after Phase IIa.

According to a CombinatoRx 8-k filing, Clinical Data's subsidiary PGxHealth LLC can exercise its option up to 90 days after Phase IIa data are available by paying CombinatoRx 50 percent of the drug's previous development costs and evenly splitting future costs. If the option is declined, CombinatoRx can maintain its exclusive license by paying $5 million to Clinical Data, which will be eligible for $50 million in clinical and regulatory milestones for an initial indication, another $50 million for clinical and regulatory milestones in a second indication, and potential sales milestones and royalties.

For CombinatoRx the move is a relatively low-cost way to access pipeline opportunities while it waits on the approval of Neuromed's Exalgo painkiller, which has a PDUFA date in November 2009 and recently was licensed to Covidien's Malinckrodt.

- Ellen Foster Licking ( ⁷ [email protected] ), Melanie Senior ( ⁸ [email protected] ), Joseph Haas ( ⁹ [email protected] ), Emily Hayes ( ¹⁰ [email protected] ) and Christopher Morrison ( ¹¹ [email protected] )