Deal Watch: Beyond Pfizer/AstraZeneca, Plenty Of Fish In The Sea

Deals continue outside of the focus on Pfizer/AstraZeneca, with Novartis expanding its ophthalmology portfolio; Viking licensing five metabolic disease candidates from Ligand; BioAlliance and Topotarget moving closer to a merger creating a new orphan oncology firm to be called Onxeo; Ventrus and Assembly planning their own merger to focus on hepatitis B; and Daiichi Sankyo and Sanford-Burnham signing an R&D collaboration on novel cardiovascular and metabolic disease targets.

“The Pink Sheet” regularly presents commentary and perspective on key business deals. Here is a summary of the most noteworthy transactions that occurred between May 19 and May 23.

Novartis/Ophthotech

Looking to build upon its Alcon Inc. ophthalmology business, Novartis AG will pay $200 million upfront to acquire ex-U.S. commercial rights to Fovista, Ophthotech Corp.’s anti-PDGF aptamer candidate for combination therapy with anti-VEGF drugs in wet age-related macular degeneration. Ophthotech, which retains U.S. commercial rights to the drug, can also earn up to $830 million in milestone payments as well as sales royalties under the arrangement announced May 19 [See Deal].

Ophthotech is responsible for leading remaining global Phase III studies, and the partners will share clinical costs outside of the U.S. Topline data are expected in 2016. The company will work with Novartis to file the drug for ex-U.S. approval.

In addition, Novartis will provide Lucentis (ranibizumab) to all ex-U.S. patients in future Fovista trials, plus the ongoing Phase III program. Ophthotech and Novartis also may develop a combination of Fovista with a Novartis anti-VEGF therapeutic under the agreement, and Novartis obtains the right to use certain drug-delivery technologies to reformulate Fovista as a pre-filled syringe. Ophthotech retains options to license U.S. rights to the new combination or reformulation.

Viking/Ligand

Start-up Viking Therapeutics Inc. is hoping to make a splash in the metabolic space – at least in a couple years once the programs it licensed May 22 from Ligand Pharmaceuticals Inc. begin to report out data. The lean-structured biotech has licensed five programs from the royalty collector, including two clinical-stage assets and another that will enter the clinic next year (Also see "Viking Explores Metabolic Disorders With Drugs Licensed From Ligand" - Pink Sheet, 22 May, 2014.). There was no upfront cash payment on the deal, but Ligand will pay $2.5 million for an equity stake in the fledgling company and will receive further equity down the line as payment.

As is typical of Ligand’s business model, it will receive development and sales milestones as well as single-digit tiered royalties on worldwide sales of the products. Viking will be responsible for all development and commercialization. The investment from Ligand will make it the primary investor in Viking, which has been funded largely through a small group of investors since it was formed in 2012. Viking currently has no venture backing.

The lead compound – VK0612 – is an oral, once-daily treatment for type 2 diabetes already tested in several Phase I/II studies. VK0612 is a selective inhibitor of fructose-1,6-bisphosphatase, or FBPase, an enzyme that plays a role of glucose synthesis in the body. Viking CEO Brian Lian said the drug would be used in patients who have failed on one or two therapies already, but want to delay the need for insulin injections. The plan is to begin a Phase IIb trial of VK0612 in the first quarter of 2015, with data expected in the second half of 2016.

The other clinical-stage asset included in the deal is an orally available, non-steroidal selective androgen receptor modulator in development for the treatment of cancer cachexia, a wasting syndrome characterized by loss of muscle mass. VK5211, a proprietary compound of Ligand’s, already has been tested in two Phase I studies that showed a statistically significant increase in lean muscle mass in healthy individuals. Viking intends to begin Phase II testing of the compound in cancer patients in the first quarter of 2015.

Also in the portfolio is VK0214, an oral selective thyroid hormone receptor-β agonist for the treatment of dyslipidemia. The compound hasn’t entered the clinic yet, but Lian expects Viking will begin early stage clinical trials some time in 2015. He said the company intends to take the three lead programs through value-inflection points and then begin seeking partners that could help the company with development and commercialization.

BioAlliance/Topotarget

A proposed merger announced in April of cancer-focused firms Onxeo SA and Topotarget AS, creating a new company that would be called Onxeo and focused on orphan oncology indications, will come to a vote at shareholders’ meetings scheduled for June 27 (Topotarget) and June 30 (BioAlliance). The deal, approved by both companies’ boards, will be structured so that BioAlliance shareholders will own roughly two-thirds of the new company with Topotarget shareholders owning about one-third [See Deal].

The firms said the merger would create a new company owning “a complementary portfolio of advanced programs targeting severe pathologies where there exists an unmet medical need.”

The pipeline would include pan-HDAC inhibitor belinostat, partnered with Spectrum Pharmaceuticals Inc.; Validive (bioadhesive clonidine), in Phase II for the prevention of oral mucositis in head and neck cancer patients undergoing chemotherapy and/or radiation; and Livatag, a formulation of doxorubicin in Phase III for primary liver cancer. Beleodaq (belinostat) has been submitted for U.S. approval to treat relapsed or refractory peripheral T-cell lymphoma and has a user fee date of Aug. 9 (Also see "Deal Watch: Nanotech Formulations Of Doxorubicin Highlight Recent Deal-Making" - Pink Sheet, 21 Apr, 2014.).

Ventrus/Assembly

Assembly Biosciences Inc. entered into a merger agreement with privately held Assembly Pharmaceuticals Inc. May 19, to create a new public company focused on hepatitis B therapeutics that will be called Assembly Biosciences Inc. and whose shares will trade on the NASDAQ exchange. Expected to close July 10, the deal is an all-stock transaction [See Deal].

The new company will focus on developing Assembly’s novel, first-in-class, small molecule candidates to treat or cure HBV, which afflicts an estimated 350 million patients worldwide. Currently, there is no curative therapy for the virus, which causes more than 600,000 deaths annually.

Assembly discovers and develops Core Protein Allosteric Modulators (CpAMs) to treat viral infections, including HBV. In preclinical studies, the CpAMs selectively and potently reduced viral load and two main HBV antigens. Unlike existing therapies that only suppress HBV, Assembly’s candidates could be curative because they can eliminate the viral reservoir in infected patients. Ventrus’ top pipeline candidate is VEN307, a topical analgesic cream for anal fissures that should be ready soon for an NDA filing.

Daiichi Sankyo/Sanford-Burnham Medical Research Institute

Japan’s Daiichi Sankyo Co. Ltd. and Orlando-based Sanford Burnham Prebys Medical Discovery Institute signed a three-year agreement May 21 to collaborate in the discovery and development of first-in-class therapeutics for cardiovascular and metabolic disease. No financial terms were disclosed.

The institute said this partnership is part of its 10-year effort to translate basic research discoveries into cutting-edge therapies more quickly. An anonymous donation of $275 million received earlier this year will help fund that effort (Also see "Sanford-Burnham Hopes $275 Million Gift Will Translate To Returns" - Pink Sheet, 24 Feb, 2014.).

The partners said their collaboration will focus on identifying, validating and screening novel drug targets and studying new mechanisms of disease. Researchers at the institute will identify and validate targets in collaboration with Daiichi’s Cardiovascular-Metabolic Research Laboratories. After a target is validated, collaboration teams then will conduct drug screening to find compounds that can modulate that target.