Deal Watch: Bristol Doubles Down On Five Prime, Roche Continues Diversifying

Roche buyout of California biotech Adheron will strengthen its pipeline in rheumatoid arthritis and fibrosis. Lilly keeps busy, expanding an immuno-oncology collaboration with China's Innovent and acquiring a Phase III intranasal hypoglycemia candidate from Locemia.

"The Pink Sheet" regularly reports on important deal-making within the biopharmaceutical industry. Below is a round-up of the most significant transactions that took place between Oct. 3 and Oct. 16.

Bristol-Myers Squibb/Five Prime

Replacing a deal signed in March 2014, Bristol-Myers Squibb Co. received exclusive global rights to develop and sell Five Prime Therapeutics Inc.'s Phase I colony stimulating Factor 1 receptor (CSF1R) inhibitor antibody FPA008 for immuno-oncology indications. The Oct. 15 agreement also includes all modifications, derivatives, fragments or variants of anti-CSFR1 antibodies.

The new transaction comes on the heels of two important achievements for Bristol: the first-ever FDA approval for an all-immunotherapy combination, its PD-1 inhibitor Opdivo (nivolumab) and CTLA-4 inhibitor Yervoy (ipilimumab) in melanoma, and expanded approval for Opdivo in non-squamous non-small cell lung cancer (Also see "Opdivo Back On Par With Keytruda In Lung Cancer" - Pink Sheet, 9 Oct, 2015.).

In their original agreement, Bristol had rights to develop single or combination drugs interacting with human extracellular protein targets to select immune checkpoints in two pathways [See Deal]. The partners started work on a Phase Ia/Ib trial evaluating a combination of Opdivo and FPA008 for non-small cell lung cancer, melanoma, head and neck cancer, pancreatic cancer, colorectal cancer and malignant glioma. (Five Prime is responsible for finishing the Phase Ia/Ib study.)

The biotech had received a total of $71m up front plus a $21m equity investment (for about a 5% stake) from Bristol. Under the new terms, Bristol obtains rights directly to FPA008, and potentially could combine it with a number of its in-house products or candidates (Also see "Bristol Likes What It Sees In Five Prime, Invests More In CSF1R Program" - Pink Sheet, 15 Oct, 2015.).

The pharma also is spending a lot more this time: $350m up front; up to $1.05bn in development and regulatory milestones per anti-CSFR1 drug for cancer, including combinations ($505m for Opdivo combinations and $542.5mm for other combos); up to $340m in development and regulatory milestones per CSFR1 product for non-oncology indications including pigmented villonodular synovitis (PVNS); and royalties in the high teens to low twenties [See Deal].

Bristol is in charge of development, manufacturing, and commercialization, although Five Prime has the option to perform (and would pay for) future studies including those required to gain approval for FPA008 in PVNS or in combination with other Five Prime candidates (either internal or in-licensed) in immuno-oncology. The pharma may include a Five Prime-conducted trial in its own development plan in exchange for reimbursing costs. If it opts not to include Five Prime's trials before the review of any efficacy data from the first Phase III or registration-enabling trial, and Five Prime's trials have independently led to US, EU or Japanese approval, then Bristol would reimburse Five Prime up to 125% of expenses.

The biotech also gets a minority US co-promotion option, which if exercised would entitle the company to low single-digit royalties. FPA008 works by inhibiting a key mediator of immunosuppression in the tumor microenvironment by destroying tumor-associated monocytes and macrophages.

Roche/Adheron

Roche will pay $105m up front and up to $475m in milestone fees to acquire Adheron Therapeutics Inc. in a deal that may help expand the Swiss pharma's portfolio in key therapeutic areas outside of oncology [See Deal].

California-based Adheron, which built a technology platform to disrupt cell adhesion in various diseases, has completed Phase I testing in healthy volunteers for a monoclonal antibody called SDP051 for the treatment of rheumatoid arthritis and fibrosis – two growth areas for Roche. The Oct. 9 acquisition will boost the company's immunology and respiratory portfolios and grow its fibrosis focus, which was broadened by the $8.3bn purchase of InterMune Inc. in 2014 [See Deal].

Adheron debuted in 2006 as Synovex Corp. based on the discovery of Cadherin-11, a protein that acts as an adhesive between cells. The cell-surface protein contributes to joint destruction in rheumatoid arthritis and is implicated in fibrotic pathology.

SDP051 builds on Roche's existing immunology and respiratory platforms anchored by Actemra (tocilizumab) for rheumatoid arthritis, Rituxan (rituximab) for RA and other indications, Xolair (omalizumab) for chronic idiopathic urticaria and allergic asthma, and Pulmozyme (dornase alfa) for cystic fibrosis. The InterMune acquisition added the idiopathic pulmonary fibrosis therapy Esbriet (pirfenidone) to Roche's fibrosis portfolio.

While Roche is and most likely will continue to be a dominant oncology player – 64% of its first half 2015 pharma revenue came from cancer drugs while 16% came from immunology assets – the company continues to diversify and push into new areas. It recently revealed positive Phase III results for ocrelizumab in the treatment of primary progressive multiple sclerosis, a segment of MS patients in which pharma has had little luck developing effective therapies thus far (Also see "Roche’s Ocrelizumab Poised To Seize Primary Progressive MS Opportunity" - Pink Sheet, 8 Oct, 2015.).

Lilly/Innovent

Eli Lilly & Co. has expanded its cancer drug collaboration with Chinese biotech Innovent Biologics Inc. with plans to develop and market up to three anti-PD-1 based bispecific antibodies over the next decade, both inside China's expanding health care market and abroad (Also see "Lilly Builds On Innovent Biologics Bet" - Scrip, 13 Oct, 2015.).

The development and commercialization deal was announced Oct. 11, under which Innovent could reap extra payments of up to $1bn if the planned immuno-oncology products attain certain development, regulatory and sales targets. It builds on the duo's initial oncology alliance, launched in March and under which Lilly agreed to pay the Chinese biotech $56m up front and $400m in milestone payments, as well as sales royalties [See Deal].

Under that arrangement, Innovent will contribute two compounds, the first being a Phase I-ready antibody targeting the CD20 protein for the treatment of hematologic malignancies. It will also contribute a preclinical immuno-oncology asset that Innovent will develop in China, while Lilly will be responsible for development in the rest of the world.

The expanded collaboration will see Lilly create three preclinical anti-PD-1 bispecific antibodies based on an antibody sequence from Innovent. The US company will develop, manufacture and commercialize the checkpoint inhibitor immunotherapies outside the Chinese market, while Innovent would hold rights inside China, where rapidly escalating cancer rates pose a major health problem.

Lilly has supported Innovent before – the company's regional venture investment arm, Lilly Asia Ventures, contributed to multiple rounds of financing for the Chinese biotech and helped fund Innovent's founding in 2001.

Lilly/Locemia

In a second deal this past fortnight, Lilly acquired the worldwide rights to Locemia Solutions' Phase III intranasal glucagon product for the treatment of severe hypoglycemia – which it hopes will be the first needle-free option to gain approval for this indication.

Montreal-based Locemia's drug, AMG504-1, uses a glucagon nasal powder formulation that is delivered in an emergency situation using a single-use, ready-to-use device. According to Sagient Research's BioMedTracker, AMG504-1 is the only intranasal option for hypoglycemia currently in clinical development. Financial details of the Oct. 9 deal were not disclosed.

Lilly's newly acquired candidate may prove a strong investment, with positive data thus far. However, the market for intranasal glucagon isn't expected to be a highly lucrative one because the treatment usually is used only when hypoglycemia is very severe; most diabetes patients do not experience this frequently.

Astellas/Immunomic Therapeutics

Astellas Pharma Inc. is making good on its strategic intention to expand in vaccines and immunology, paying $300m upfront for worldwide rights to Immunomic Therapeutics Inc.'s technology and pipeline for DNA vaccines against human allergies, in a deal that also will allow the US biotech to focus on other applications including oncology.

The Japanese pharma acquired exclusive global rights Oct. 9 to research, develop, manufacture and commercialize products deriving from Immunomic's LAMP-vax DNA vaccine platform for the prevention and treatment of multiple types of allergies in humans, including food and environmental allergies.

The deal will be a significant payday for privately held Immunomic, which is eligible for 10% royalties on Astellas' net sales of any resulting products as well as a sizable $300m upfront on execution of the agreement. The Japanese firm gains a handful of active research programs in various areas, including the treatment of peanut allergies, a potentially major market in itself where there are no currently approved specific therapies.

Hershey, Pa.-based Immunomic retains rights to all other uses of its proprietary LAMP-vax platform, CEO Dr. William Hearl noting in a statement that the "large scale and scope of the new partnership allows Immunomic to focus our efforts on other applications like oncology."

The design of the vaccines enables potential use in a wide range of areas including infectious diseases such as HIV and in animal health. The LAMP-vax technology effectively eliminates allergens to avoid the normal inflammatory response, and instead elicits an immune response against a specific protein through the injection of DNA coding for the protein, rather than the protein itself.

The vaccines also include a short DNA sequence encoding lysosomal associated membrane protein (LAMP), which redirects and generates a more complete immune response – including antibody production, cytokine release and immunological "memory" – compared to standard DNA vaccines. These primarily elicit a cytotoxic T-cell response, and LAMP-vax vaccines are expected to have improved safety.

IGI Laboratories/Alveda

Teligent Inc. agreed Oct. 13 to pay $36.3m in cash to acquire private Canadian generics firm Alveda Pharmaceuticals Inc. Alveda sells branded and generic injectable pharmaceuticals and medical devices in Canada [See Deal].

Alveda's portfolio includes Caldolor injectable ibuprofen (licensed from Cumberland Pharmaceuticals Inc. in 2010) and Euflexxa, an injectable treatment for osteoarthritis. The deal comes just a week after IGI paid Concordia Pharmaceuticals Inc. $11m in cash for three marketed injectables – Fortaz (ceftazidime), Zantac (ranitidine) and Zinacef (cefuroxime) [See Deal].

Novo Nordisk/Emisphere

Emisphere Technologies Inc. granted Novo Nordisk AS rights to use its Eligen technology to develop and commercialize oral formulations of four classes of Novo’s molecules aimed at metabolic disorders, including diabetes and obesity.

Under the deal announced Oct. 15, Novo gets exclusive rights to develop and sell candidates in three molecule classes and nonexclusive rights for the fourth. Emisphere receives $5m up front, up to $62.5m in preclinical and clinical development and commercialization milestones for each of the three exclusively licensed molecule classes, and up to $20m in development milestones for the nonexclusive class, plus sales royalties for any resulting product.

As part of the agreement, Novo also receives an option for exclusive and nonexclusive rights to develop and commercialize oral formulations of additional molecules for diabetes, obesity and other indications using Eligen. Upon exercise of Novo's option, Emisphere would be eligible for the same milestone payments outlined above relating to exclusive and nonexclusive rights.

In mid-2008, Novo got rights to use Eligen in developing oral versions of its glucagon-like peptide 1 (GLP-1) receptor agonists for Type II diabetes [See Deal]. Resulting from the partnership was oral semaglutide; just two months ago Novo announced plans to commence Phase IIIa trials of that candidate.

In conjunction with the new deal, that 2008 arrangement has been amended and Emisphere receives $9m as prepayment of a product development milestone in exchange for a reduction in future royalties. In late 2010 Emisphere contracted to use Eligen to create oral versions of Novo's insulin for diabetes.