Deals Of The Week: Novartis Places Bid To Dominate In Cancer

Novartis beefs up its immunotherapy pipeline, while French biotech Servier makes a play to get in the CART game. Yet, the deal on everybody’s lips is Actavis’ acquisition of Forest. Plus news on Gilead and Pfizer.

While the largest deal of the week, and certainly the one receiving the most attention, has been Allergan PLC’s expansion of its branded portfolio via its $25 billion purchase of Forest Laboratories Inc., the deal that could have major implications for a hot target space in cancer is Novartis AG’s pick up of a small Massachusetts biotech.

Novartis nabbed young start-up CoStim Pharmaceuticals Inc. at the beginning of the week for an undisclosed amount – a move that could make it a major force in the red-hot area of cancer immunotherapy (Also see "Novartis Ups The Ante In Immunotherapy With CoStim Buy" - Pink Sheet, 18 Feb, 2014.).

The closely held biotech was founded in 2012 by MPM Capital and led by MPM managing directors Luke Evnin and Robert Millman. Atlas Ventures joined MPM in early 2013 to fund the company’s $10 million Series A round. While terms of the deal were not disclosed, Atlas partner Bruce Booth wrote in a recent blog post that “if the contingent milestones are paid, this deal will return a significant portion of the entire Life Science allocation in Atlas Fund VIII.”

The Swiss pharma knows a thing or two about oncology – it’s been marketing Gleevec (imatinib), one of the earliest targeted cancer treatments and a multi-billion dollar drug annually, since 2003. And it boasts one of the richest oncology pipelines in the industry, spanning numerous solid- and liquid-tumor indications and many of the hottest biological targets. Its latest R&D foray into chimeric antigen receptor technology (CART) – and the programs being acquired from CoStim – has enriched the pharma’s immunotherapy platform and upped its commitment to being a dominant player in oncology.

While Novartis has been cagey about revealing what CoStim actually has to offer, Bill Sellers, its global head of oncology, says the Cambridge biotech brings four to five late-stage programs to the table – programs the industry could start hearing about in early 2015.

“One of our strengths is attacking cancer from its genetic base,” said Sellers. “But we have not done a lot of work in immunotherapy until two years ago,” he admitted.

That’s when Novartis inked its deal with the University of Pennsylvania for its CART research (Also see "Novartis/Penn To Research Chimeric Antigen Receptor Immunotherapies" - Pink Sheet, 6 Aug, 2012.) [See Deal]. The deal is based on the work of Carl June, whose lab created T-cells that express the receptor CART 19, a synthetic fusion protein consisting of antibodies that attach to the CD-19 protein, commonly expressed in chronic lymphocytic (CLL) and other B-cell mediated leukemias. The genetically engineered T-cells are injected back into the patients, where they find their way to CD-19-expressing leukemia cells and kill them.

Since pairing up with Penn, Novartis has been “building expertise internally,” said Sellers, as well as opening a large-scale manufacturing facility in Morristown, N.J. “CART has shown dramatic efficacy, but it doesn’t work in everybody,” said Sellers. “So there is room to augment that.”

Sellers said Novartis has been looking for a way to get into checkpoint inhibitors and other immunotherapies for a couple of years, knowing it doesn’t have the expertise in-house. That’s where CoStim comes in – one of its late-stage assets targets the PD-1 pathway. That’s the smokin’ hot PD-1 pathway – if you’ve paid any attention to, or even just glanced at, companies like Merck & Co. Inc. or Bristol-Myers Squibb Co. in recent months, then you’ve heard about their anti-PD-1 drugs. Combination therapies with these checkpoint inhibitors project to be huge sellers – as high as $35 billion, if some analysts are to be trusted.

Merck already is jumping on the combo bandwagon – it’s inked three deals with Pfizer Inc., Incyte Corp. and Amgen Inc. just this month to combine its anti-PD-1 checkpoint inhibitor MK-3475 with assets in their respective pipelines (Also see "Pushing Hard On PD-1, Merck Signs Trio Of Combo Development Deals" - Pink Sheet, 5 Feb, 2014.).

Novartis is employing a different strategy – it’s hoping to move forward with a CART/PD-1 combo. “We are just starting to explore CART in solid tumors, which are thought to be more immunosuppressant,” said Sellers.

CART programs may be just as revolutionary as PD-1. On Feb. 19, Memorial Sloan Kettering Cancer Center announced results from a trial of adult B cell acute lymphoblastic leukemia that showed 88% of patients achieved complete remission after receiving the modified T-cells. (The technology is the basis for the founding of high-profile start-up Juno Therapeutics Inc., which currently is locked in a patent dispute over the CAR technology with Novartis (Also see "In Cancer Immunotherapy Legal Battle, It's Now Juno v. Novartis" - Scrip, 19 Feb, 2014.).

French biotech Servier SA also is getting in on the action – check out the deals below. And for our in-depth coverage of the Actavis/Forest transaction, see (Also see "Actavis’ Big Bet On Diversified Hybrid Model Reflects Industry Trends" - Pink Sheet, 24 Feb, 2014.).

Servier/Cellectis

Servier SA wants a piece of the CART action; the French biotech inked a collaboration with cell therapy company Cellectis SA on Feb. 17 for $10 million upfront and $840 million in potential milestones tied to the development, regulatory and commercial success of six potential products [See Deal]. The deal includes the development of UCART19, Cellectis’ lead product, a CD19-targeting compound that is in early stages, but could be a potential rival to Novartis’ lead CART program – which also targets the CD19 T-cells.

“These original cell-based therapies will well complement Servier's innovative clinical oncology pipeline, which currently includes immunotherapeutic monoclonal antibodies, an HDAC inhibitor, kinase inhibitors, antiangiogenic and proapoptotic small molecules,” said Jean Pierre Abastado, head of oncology at Servier.

The deal initially will focus on various types of leukemia and lymphoma, with Servier having the option to license the products and take over development after Phase I has been completed.

Gilead/CURx

Gilead Sciences Inc. has had its hands full, what with plotting the domination of the market for all-oral hepatitis C treatment. So busy, in fact, that the biotech has completed only one R&D deal in almost the last two years – a preclinical partnership with antibody company MacroGenics Inc. last January, according to the Strategic Transactions database [See Deal].

On Feb. 19, Gilead announced its latest R&D deal, but this time it has flipped the usual script and out-licensed a late-stage candidate for development. It’s signing up CURx Pharmaceuticals Inc. to develop non-core asset inhaled fosfomycin/tobramycin to treat Pseudomonas aeruginosa lung infection in cystic fibrosis (CF) patients.

The candidate met the primary endpoint in a Phase II trial in 2010 in this indication, but Gilead subsequently discontinued development. There already are two treatments for this indication approved in the U.S.: Gilead’s own Cayston (inhaled aztreonam) and Novartis’ Tobi (inhaled tobramycin).

In preclinical studies, inhaled fosfomycin/tobramycin has shown activity against several other pathogenic bacteria, including methicillin-resistant Staphylococcus aureus (MRSA). About half of all CF patients become infected with Pseudomonas aeruginosa and about a quarter are infected with MRSA, according to CURx. The financial details of the transaction were not disclosed.

Pfizer/MIT’s Synthetic Biology Center

Pfizer and the Massachusetts Institute of Technology are collaborating on the use of novel synthetic biology tools to enhance drug discovery and development. The three-year deal, announced on Feb. 20, covers multiple therapeutic areas at Pfizer and involves several core investigators at MIT’s Synthetic Biology Center, according to the MIT press release.

Scientists have different definitions for synthetic biology, but, essentially, it involves integrating current and new biotech tools, systems biology and bioinformatics to enable engineering of new biological parts, in short, making new genetic codes from scratch. The ultimate goal of using such techniques is to make design and construction of novel biological systems into a professional engineering discipline.

Synthetic biology as an area of scientific focus has taken off in the past decade, with support from the National Science Foundation, which funded creation of the first synthetic biotech research center, Synberc, in 2006. Participants in Synberc were the University of California, Berkeley and University of California, San Francisco, Stanford University and MIT. Since then, NSF has awarded millions of dollars more to other academic organizations to set up centers of synthetic biology research, including the J. Craig Ventor Institute and New York University.

Startup activity also is climbing, with one of the most visible practitioners, Intrexon Corp., netting $171 million in an initial public offering last year [See Deal]. The ability to use synthetic biology parts as “programmable entities” presents the opportunity to create new biological processes.

The partners plan to use cellular genome engineering to support development of next-generation protein-expression systems. Pfizer didn’t provide more details, except for comments by Jose Carlos Gutierrez-Ramos, group senior VP and head of Biotherapeutics R&D. He noted in a press release that “We are reaching a key inflection point where advances in synthetic biology have the potential to rapidly accelerate and improve biotherapeutic drug discovery and development, from early-stage candidate discovery through product supply.”