Deal Watch: Genzyme Validates Alnylam's Strategy By Partnering On Hemophilia Candidate

Astellas/Chromocell pain therapy collaboration centers on New Jersey biotech's platform technology, which may solve the problem of reproducing Nav1.7 receptors for in vitro assays. Xoma signs preclinical immuno-oncology partnership with Novartis, dimming the focus on Phase III flop for gevokizumab.

"The Pink Sheet" regularly covers noteworthy deal-making in the biopharmaceutical industry. Here is a roundup of key transactions occurring between Sept. 19 and Oct. 2.

Genzyme/Alnylam

Alnylam Pharmaceuticals Inc.'s turnaround plans are finally bearing fruit now that Sanofi's Genzyme Corp. division has opted into the first drug since the pair expanded their deal in early 2014, further validating the biotech's RNAi technology. The companies announced Oct. 1 that Genzyme will option the development and commercialization rights to Alnylam's ALN-AT3 hemophilia program for the rest of the world; Alnylam maintains rights within North America and Western Europe.

For now, Genzyme is on the hook for 20% of the program's development costs; ALN-AT3 recently completed Phase I and showed promising results. The cost to Genzyme could increase 50% based on whether it ends up co-promoting in North America and Western Europe.

This is the third drug from Alnylam that Genzyme has opted to bring into its pipeline – the other two, patisiran and revusiran – were part of an initial deal inked in 2012 [See Deal].

Genzyme's interest in Alnylam is underwriting the big turnaround story for the company, which hit hard times earlier in the decade when Roche and Novartis AG broke off partnerships with the RNAi specialist. Losing its big pharma partnerships meant laying off employees, cutting costs and shifting directions to focus more on individual products and less on its platform technology.

At the JPMorgan Healthcare Conference in January 2014, Genzyme expanded its collaboration with Alnylam and gave the company a strong future. That partnership expansion included opting into the first two RNAi-based drugs – both for rare diseases – and taking a 12% equity stake in the biotech. At the time, Sanofi paid $700m, about $80 per share.

The latest deal offers Alnylam a unique opportunity – it's structured so that the smaller company retains the rights in what typically are the two largest and most lucrative markets, while gaining cash and expertise from Genzyme [See Deal].

Astellas/Chromocell

Astellas Pharma Inc. will pay Chromocell Corp. $15m up front and could spend more than $500m on milestone fees under a license and collaboration agreement for Nav1.7 antagonists, including lead drug candidate CC8464 and backup compounds, for the treatment of neuropathic pain and other conditions.

North Brunswick, N.J.-based Chromocell is a 12-year-old company with about 100 employees that uses its Chromovert technology platform to develop flavor enhancers as well as therapeutics. The transaction with Astellas, announced Sept. 30, is the company's first pharma partnership and one of the largest deals to date associated with Nav1.7 – a sodium ion channel involved in the transmission of pain, which has become an increasingly popular non-opioid pain drug target (Also see "Astellas, Chromocell In Pain Pact Worth $515m-plus" - Scrip, 30 Sep, 2015.).

"Neuropathic pain is really a field where there is still a lot of unmet need. We have early on looked at Nav1.7, which is the first target with big potential in the pain space besides opioids and without the side effects," Chromocell CEO Christian Kopfli said.

Kopfli described two reasons why the company was willing to sign a deal with Astellas so early in the development process for the preclinical compound CC8464 and its follow-on molecules. First, Astellas understood the value of drugs targeting Nav1.7, which is associated with an inability to feel pain for people who don't express high levels of Nav1.7. The target also has been validated in mid-stage clinical trials for more advanced Nav1.7 antagonists.

Second, Kopfli said, it has been difficult to develop successful novel compounds targeting Nav1.7, because it has been hard to reproduce the Nav1.7 receptor for in vitro assays – a feat that Chromocell's Chromovert technology was able to achieve. Those two factors led Astellas to propose terms for an early-stage collaboration that was attractive to Chromocell. "The offer they put on the table was convincing for us," Kopfli said.

In addition to the upfront, milestone and royalty payments that Chromocell stands to earn, the biotechnology company retained development responsibilities through the first Phase IIa proof-of-concept clinical trial in neuropathic pain [See Deal].

Astellas will take over development beyond Phase IIa in the treatment of peripheral neuropathic pain, but Chromocell is free to develop CC8464 and its backup compounds in certain areas, such as rare diseases and non-oral formulations. Astellas may opt-in to develop any of those alternative indications and formulations for additional fees, and Chromocell may exercise US co-promotion rights in certain instances.

Novartis/Xoma

Xoma Corp.'s stock rose back above $1 per share on Oct. 1 after the company revealed a new preclinical immuno-oncology collaboration with Novartis, which gives the antibody therapeutics developer enough cash to fund early-stage internal programs through 2017.

Berkeley, Calif.-based Xoma's partnership news effectively distracted investors from a recent Phase III flop for gevokizumab, which was the company's main priority until the monoclonal antibody was bested by placebo in the treatment of a rare eye disease. Novartis will pay $37m up front and extend the due date on $13.5m in debt that the Swiss pharma company provided under a prior agreement. Xoma also will be eligible to earn up to $480m in milestone fees plus royalties.

Novartis obtains global development and commercialization rights to Xoma's anti-transforming growth factor-beta (TGFb) antibody program, including XOMA 089, a preclinical candidate that neutralizes the TGFb1 and 2 isoforms while sparing TGFb3. Preclinical models have shown that XOMA 089 is active against head and neck and breast cancer, and it may work well in combination with therapies that target the immune checkpoint known as programmed cell death-1 (PD-1).

The Xoma-Novartis relationship dates back to 2004 when Xoma and Chiron signed an oncology collaboration agreement [See Deal]. Novartis acquired Chiron in 2006 and renegotiated the deal terms with Xoma in 2008, and the pharma company has been developing HCD122 since then. The CD40-targeting antibody is in Phase II for Hodgkin's lymphoma and Phase I/II for four other hematologic malignancies.

Genentech/Arvinas

Genentech Inc., a member of the Roche Group, provided an undisclosed upfront payment and may invest more than $300m in milestone fees to use PROTAC, Arvinas Inc.'s targeted protein-degradation technology, to create novel drugs against multiple disease targets.

Full financial terms of the Oct. 1 agreement were not revealed, but Connecticut-based Arvinas will earn tiered royalties on any drugs commercialized under the agreement. Genentech also may commit to additional fees and royalties to expand the collaboration to additional disease targets. Neither the diseases nor the specific targets subject to the companies' agreement were disclosed.

Traditional therapies that inhibit proteins work on only about a quarter of the proteins in the body, but Arvinas claims that its proteolysis-targeting chimeras (PROTAC) technology can expand the number of proteins that can be targeted for drug development. PROTACs are bifunctional small molecules that target proteins for degradation and removal from a cell. They are designed to induce the cell's own protein-degradation machinery to bind to the targeted protein and label it for removal from the cell.

MedImmune/Tanabe

MedImmune LLC is combining the second-generation pyrollobenzodiazepine (PBD) warheads it picked up in a 2013 buyout of Spirogen Ltd. with Tanabe Research Laboratories USA Inc.'s antibodies in a collaboration to develop monospecific and bispecific antibody-drug conjugates against a set of cancer targets. No financial terms were disclosed under the deal announced Sept. 23.

AstraZeneca PLC's large-molecule-focused subsidiary, which is leading the way in the pharma's efforts to develop immuno-oncology drugs as well as ADCs, is licensing worldwide rights to its PBD candidates to San Diego-based Tanabe, an affiliate of Japan's Mitsubishi Tanabe Pharma Corp., for the undisclosed targets. However, at the end of Phase Ib, MedImmune can opt in to share development and commercialization rights in the US and Europe.

In an interview, David Berman, MedImmune senior VP of R&D and head of the Oncology Innovative Medicines unit (iMED), said the transaction is a way for the company to broaden its base in ADC development, as it also is developing proprietary ADCs using both PBDs and other payloads.

"MedImmune does have an active, internal ADC pipeline, and we do have candidates that are nearing the clinic," he said. "We anticipate that this collaboration will enhance our efforts, providing us a virtual pipeline. This is not instead of, it's actually in addition to – the ultimate goal being to develop these ADCs to improve patients' lives, so we're trying to maximize how we do that internally, plus working externally as well."

MedImmune paid $200m up front, with the potential for up to $240m in earn-outs, to acquire Spirogen in October 2013 [See Deal]. Spun out of University College London in 2001, Spirogen’s work focused on PBD technology, using biodegradable linkers to attach potent cytotoxic warheads to cancer-targeting antibodies. PBDs are DNA minor groove-binding agents that block the division of cancer cells without distorting the cells’ DNA helix. The result is a therapeutic that is less likely to cause drug resistance than other cancer treatments, and is less toxic to the patient because the active ingredient is delivered directly to tumors, without harming surrounding healthy cells.

Berman said MedImmune's PBDs are among the most potent cytotoxic payloads available for inclusion in ADC therapeutics. He wouldn’t give any timelines for the work being led by Tanabe, nor give a timetable for when MedImmune's first ADC might reach the clinic. "These PBDs specifically crosslink DNA and they are more potent than the warheads that are currently being commercialized," the exec asserted. "They are among the most potent warheads out there."

Under the agreement, MedImmune receives an undisclosed upfront payment from Tanabe, and can earn development and commercial milestones, as well as single-digit royalties on sales of any resulting ADC that reaches market. It was not made clear how the earn-outs might be affected if MedImmune opts into development and commercialization following Phase Ib.

Galapagos/AbbVie (No Deal)

AbbVie Inc. has decided against licensing the Phase II JAK1 inhibitor filgotinib from Galapagos NV under a 2012 deal signed by its predecessor Abbott Laboratories Inc., electing instead to advance its proprietary JAK1 inhibitor ABT494 into Phase III. On Sept. 25, the Belgian firm announced it again holds full rights to filgotinib and plans to begin a Phase III trial of the drug in rheumatoid arthritis in early 2016.

In August 2014, Galapagos had said it planned to produce Phase II data for filgotinib in RA during the first quarter of 2015, which if successful could have triggered milestone payments of $250 million under the 2012 agreement with AbbVie. Abbott paid $150 million up front for option rights to candidate upon the deal's signing in February 2012 [See Deal].

Merck KGAA/BioMarin (No Deal)

Merck KGAA is returning to BioMarin Pharmaceutical Inc. the rights to Kuvan (sapropterin), a drug against the rare genetic disorder phenylketonuria (PKU), as the diversified German group seeks to exit non-core areas to focus on cancer, immunology and neurology (Also see "Merck KGAA Returns PKU Drugs To BioMarin To Focus On Cancer" - Pink Sheet, 1 Oct, 2015.).

Merck acquired the rights to Kuvan and Peg-Pal, another PKU treatment in markets outside of the US and Japan, in 2005. The medicine is the first treatment approved for hyperphenylalaninemia due to the rare metabolism disorder PKU and has orphan drug exclusivity in Europe until 2020. Peg-Pal (pegvaliase) is an investigational treatment that is also designed to treat PKU.

Under the agreement to undo that deal, announced Oct. 1 and set to close January 2016, Merck will receive an upfront payment of €340m ($379m), plus up to €185m ($206m) in milestone payments for both products, depending on BioMarin's development activities.

"Returning the rights of these drugs to BioMarin will allow Merck to fully focus on its core businesses, as well as further align R&D investment behind key strategic areas," Belén Garijo, member of the executive board of Merck and CEO of health care, said in a statement.

BioMarin sounded pleased about getting Kuvan fully back. An early product for BioMarin, it was licensed from Daiichi Asubio Pharma in 2004 and approved in December 2007 in the US and a year later in the EU.

Zosano/Lilly (No Deal)

It took less than a year, but Zosano Pharma Corp. and Eli Lilly & Co. have dissolved their partnership around a daily microneedle patch candidate, ZP-PTH, for severe osteoporosis. Lilly agreed to contribute $15m to Zosano's imminent IPO under the December 2014 deal, with the potential for up to $425m in earn-outs plus sales royalties going to Zosano [See Deal].

On Sept. 28, the Fremont, Calif.-based firm announced that it was ending development of the daily version, and will resume focus on a weekly formulation of ZP-PTH. While the daily version partnered with Lilly was on track to move into Phase III, the biotech decided continuing the program would not be a prudent use of its funds given feedback it had received from Japanese regulatory authorities.

A Johnson & Johnson spinout, Zosano netted $46 million in its January IPO, with Lilly participating as it had agreed to do, acquiring 1.36 million shares at a price of $11 per share [See Deal]. Lilly remains a majority stakeholder.

Biogen/BioMotiv

Biogen Inc. licensed exclusive rights to BioMotiv LLC's neuroscience candidates on Sept 21. Over a five-year period, Biogen will invest $15m in BioMotiv, which is responsible for sourcing compounds and developing them [See Deal].

The specific indications of interest in the agreement weren't disclosed. The Harrington Project for Discovery & Development, a US/UK nonprofit with which BioMotiv is affiliated, does, however, have a relationship with the Alzheimer's Drug Discovery Foundation. BioMotiv also backs a start-up called OptiKira, which is focused on progressive cell death in diseases including ALS.

Central nervous system therapies comprise a key area for Biogen, making up $8bn (or 85%) of the company's 2014 sales, led by the multiple sclerosis drugs Avonex (interferon beta-1a) and Tecfidera (dimethyl fumarate). Last year, BioMotiv also teamed up with Takeda Pharmaceutical Co. Ltd. in a similar deal. Takeda provided a $25m investment and in return received exclusive licenses to immunology, inflammation and cardio-metabolic programs [See Deal].

BioMotiv's first spin-off company, Orca Pharmaceuticals Ltd., recently licensed AstraZeneca an option on retinoic acid-related orphan nuclear receptor gamma inhibitors for autoimmune diseases (Also see "AstraZeneca Opts In To ROR Gamma T Inhibitor Space With Orca Collaboration" - Pink Sheet, 26 Feb, 2015.). BioMotiv CEO Baiju Shah spoke with "The Pink Sheet" at the BioPharm America 2015 conference about the company's role as an accelerator of translational science (Also see "Video: Interview With Baiju Shah Of BioMotiv" - Pink Sheet, 24 Sep, 2015.).

Intarcia/Phoundry

Intarcia Therapeutics Inc. is buying fellow metabolic-focused biotech Phoundry Pharmaceuticals Inc. for a combination of cash and stock, although the specifics were not disclosed [See Deal]. Phoundry was formed earlier this year by six scientists working at GlaxoSmithKline PLC's Enteroendocrine Discovery Performance unit and has a pipeline of optimized peptides in various therapy areas, most notably diabetes and obesity.

Post-acquisition, Intarcia will keep all Phoundry employees as well as its Research Triangle Park, N.C., facility. Phoundry's CEO will serve as Intarcia's head of discovery and translational medicine, Chief Scientific Officer Andrew Young will retain his title and Ved Srivastava becomes VP of peptide chemistry.

Intarcia's main focus is on diabetes and obesity, but it also has early-stage programs for serious chronic diseases. The Phase III lead program ICTA650 is a formulation of exenatide for treating Type II diabetes and is the first injection-free GLP-1 therapeutic, using Duros technology to deliver up to a full year of therapy from a single insertion.

Phoundry provides Intarcia with highly potent, selective and stable peptides. Intarcia will combine ITCA650 with optimized -peptides 1 and 2 aimed at both Type II diabetes and obesity. In March 2015, Intarcia licensed technology from Numab AG that it is using to develop a candidate that combines ITCA650 with a single-chain antibody fragment for treating diabetes and obesity; clinical trials should commence in 2017 [See Deal]. Intarcia will deliver its therapies once or twice yearly using mini-pumps.