Anchor, Ortho-McNeil-Janssen to Collaborate on Peptide Drugs

The J&J subsidiary will pay an undisclosed amount to license drugs on fewer than 10 targets in cancer and metabolic disorders.

Peptide drug platform developer Anchor Therapeutics has inked its second collaboration and licensing deal with a Big Pharma organization, licensing a handful of preclinical programs to Johnson & Johnson's Ortho-McNeil-Janssen subsidiary in the areas of oncology and metabolic diseases.

In addition to an upfront payment of undisclosed size, Ortho-McNeil-Janssen will fund Anchor's research on the compounds and make additional payments tied to regulatory and development milestones totaling up to $480 million. In exchange, the health care giant will receive licenses to peptide drugs developed under the companies' collaboration.

Anchor CEO Rick Jones wouldn't say exactly how many drugs the two will jointly develop, but he pegged the number at less than ten, and said some have yet to be chosen.

The collaboration and licensing deal follows a prior agreement between Cambridge, Mass.-based Anchor and Novartis, announced in December 2008, that gave the Swiss company rights to "a small number" of unspecified targets, Jones said ([See Deal]).

For both companies, Anchor's technology represents a novel way to explore drug discovery around the G-protein coupled receptor family, a set of proteins whose misregulation is linked to a broad spectrum of disorders. While numerous drugs targeting GPCRs have been marketed, the receptor family has also proven frustrating to scientists, in part because GPCRs affect many processes, making it difficult to produce one therapeutic effect without additional unwanted side-effects.

GPCRs' special value stems largely from their location, traversing cell walls with a unique structure that winds inside and out seven times. Most drugs that act on GPCRs attach to the extracellular portion of the receptor, using it to trigger processes inside the cell (Also see "Peptide Therapeutics' Rising Tide" - Scrip, 1 May, 2010.).

Anchor's innovation lies in its peptide technology, originally developed at Tufts University and commercially branded as Pepducins. Using its platform, the company identifies short strands of proteins with the potential to bind with GPCRs selectively, and then attaches them to lipid moieties that allow the molecules to anchor in the cell membrane while interacting directly with GPCRs on the cell's inside surface. By modulating the GPCRs, the peptide compounds can create or interrupt cellular signals implicated in disease.

Choosing from "hundreds of targets"

Although it has partnered away some of its early programs, Anchor insists that it has a broadly applicable platform that can be used to develop drugs across therapeutic areas. The J&J deal focuses closely on a specific receptor, GPR39, which Jones said has been associated with Type II diabetes. Additional targets have yet to be chosen, which Jones said will occur in a "rolling process of nomination" that will be completed quickly.

Jones described GPR39 as an "orphan GPCR," for which a natural binding partner was unknown. But while small molecules would typically bind to the receptor's external sites, Anchor's programs target an area of the receptor inside the cell considered previously unreachable. "We don't have to know its natural ligand," Jones said.

Meanwhile, "hundreds of GPCRs are other targets," he said. The Novartis deal, whose maximum value is more than $200 million, covers a small number of targets neither company has disclosed, and development is still underway.

Thus far, Anchor has kept in-house another project that seeks to harness the healing power of stem cells by a locally administered agent that attracts them to a specific site in the body. Jones said that program, an agonist of the CXCR4 receptor, is near the end of the lead optimization phase, and formal preclinical studies are expected to begin within six months with an eye on an IND application by early 2012.

Seeking a new Series B investor

Founded as Ascent Therapeutics, Anchor raised $19 million in a 2007 Series A round from Healthcare Ventures, TVM Capital, and the Novartis Option Fund. While some corporate venture funds intentionally interact with startups separately from their parents' business development operations, Novartis Option Fund typically invests with a deeper future relationship in mind; the agreement, which included an option for Novartis, led to Anchor's agreement with the Swiss pharma the following year (Also see "Ascent Therapeutics: There's Still Money in Discovery Platforms " - Scrip, 1 Jan, 2009.).

Anchor initially hoped to raise a $30 million Series B by the end of 2010, but instead announced a first closing of $10 million from the three insiders in August. It also revised its fundraising aspirations to a more modest goal of $15 million (Also see "Anchor Therapeutics' $10 Million Series B Fund May Grow Based On Near-Term Milestones" - Pink Sheet, 20 Aug, 2010.).

In addition to providing critical non-dilutive funding, the J&J agreement might make Anchor a more attractive target for an additional venture investor as it seeks to top off the Series B round. That's because the start-up's alliances with Novartis and J&J amount to validation from two Big Pharma players that could also be potential buyers.

"The insiders knew this was going to happen [at the time of the Series B's first close]," Jones said of the new agreement with Ortho-McNeil-Janssen. The startup is still seeking additional private money, and is holding ongoing discussions with both corporate and traditional VCs, he said.

Another Cambridge, Mass.-based peptide platform company, Aileron Therapeutics, partnered with Roche to develop drugs against five targets in a deal announced August 24. Roche will pay Aileron $25 million up front, although milestone payments could raise the deal size to $1.1 billion. Aileron's peptide stapling technology changes the physical shape of peptides, which prevents proteases from breaking them down as quickly as they normally would and potentially making them useful as longer-lasting drugs (Also see "Roche Partners With Peptide Specialist Aileron For Five Targets" - Pink Sheet, 24 Aug, 2010.).

- Paul Bonanos ( [email protected] )