During the second quarter of 2018, Cortellis Competitive Intelligence registered 985 new deals (excluding mergers & acquisitions) with a total disclosed deal value of $19.5 billion as part of its ongoing coverage of licensing activity in the life sciences sector compared to 964 and $35.6 billion in the first quarter and 1,104 and $13.6 billion in the second quarter of 2017. Total deal value in the second quarter did not quite reach the peak of 2014 (paced by Novartis’s $16 billion purchase of GlaxoSmithKline’s [GSK] oncology portfolio) but eclipsed the previous quarter primarily due to Allogene’s $2.8 billion license for Cellectis’s chimeric antigen receptor T-cell (CAR-T) immunotherapy program for cancer.
High-value deals worth $0.5B or more
We tracked 40 high-value new licensing deals worth more than $100 million during the second quarter of 2018. The following is a selection of deals valued at more than $0.5 billion (see Figure 1).
Allogene inherits Pfizer’s anti-cancer CAR-T assets and $2.8B Cellectis partnership
Allogene teamed up with Cellectis to progress its preclinical allogeneic CAR-T immunotherapy program, in liaison with chemotherapy, against cancer for $2.8 billion after acquiring the CAR-T portfolio of Cellectis’s previous partner, Pfizer. Cellectis would gain $185 million in milestones for each of the possible 15 targets plus royalties.
Figure 1: Selection of top deals in Q2 of 2018 by disclosed deal size. Source: Cortellis Competitive Intelligence, Clarivate Analytics
Boehringer invests $1.4B in OSE’s anti-SIRP cancer candidate
Boehringer Ingelheim (BI) was also active in the immuno-oncology space when it took over OSE Immunotherapeutics’s OSE-172, a humanized monoclonal antibody that blocks the immune checkpoint interaction between the signal regulatory protein (SIRP)-alpha and CD47, in preclinical cancer. BI releases $18 million upfront, $18 million upon phase I, and more than $1.35 billion for further development, commercialization and sales milestones plus royalties.
$1.27B deal between Biogen and Ionis for antisense neurological program
Biogen and Ionis formed a 10-year collaboration for antisense drugs in the neurological disease space, building upon a previous alliance, which yielded antisense agent Spinraza, widely available for spinal muscular atrophy. Ionis stands to net $625 million in stock, $375 million upfront, milestone and license fees of up to $270 million per drug plus up to 20% royalties.
Genentech and Lodo form $969M microbial DNA sequence-based pact
Lodo’s genome mining and biosynthetic cluster assembly platform would be used by Genentech to identify candidates against undisclosed targets, attracting an undisclosed upfront payment, up to $969 million in milestones and royalties. The platform identifies bioactive natural products based on the microbial DNA sequence information contained in soil, bypassing the challenges associated with culturing known strains of bacteria.
Licensing activity occurred across the Asia-Pacific region with some high-profile deals being established. China-based organizations showed dominance in the financial stakes with around $2 billion worth of transactions and 17 deals, followed by Japan-based firms with a total investment of $1.2 billion across eight agreements. Luye’s partnership with AstraZeneca and Shionogi’s alliance with Sage, both of which exceeded the $0.5 billion mark, paced the APAC dealmaking.
Figure 2: Total deals and deal sizes disclosed in Q2 of 2018 by certain APAC-based companies. Source: Cortellis Competitive Intelligence, Clarivate Analytics
Shionogi targets Japanese depression market with Sage’s SAGE-217 for $575M
Sage brought in Shionogi to progress its GABAA receptor modulating neuroactive steroid, SAGE-217, for major depressive disorder in the Japanese, Taiwanese and South Korean markets, following a recent Breakthrough Therapy Designation from the FDA. Shionogi pledged an upfront $90 million, up to $485 million in milestones plus royalties. The phase II candidate is expected to achieve more than $2 billion in 2024.
AstraZeneca releases anti-schizophrenia Seroquel to Luye for $546M
AstraZeneca disposed of certain territorial rights to aging anti-schizophrenia/bipolar blockbuster Seroquel and the extended-release formulation to Luye Hong Kong of Luye Pharma after refocusing its therapeutic area strategy. Luye would part with $260 million upfront and $286 million spread out until 2020 to enhance its CNS portfolio particularly in its home region of China.
Recipients of the largest milestone payments during the quarter included Portola, Incyte, Exelixis and Regenxbio (see Table 1).
Table 1: Top milestone payments in Q2 of 2018. Source: Cortellis Competitive Intelligence, Clarivate Analytics.
Outlook for Q3
At the beginning of the third quarter of 2018, deal reports continued to be added to Cortellis Competitive Intelligence. In the first few days of July, early projections highlighted that …
Axovant is focusing on Benitec’s early-stage adeno-associated virus-based gene therapies, with an initial focus on AXO-AAV-OPMD to replace the mutant polyadenylate-binding nuclear protein 1 in muscular dystrophy, and others including c9orf72 gene modulators for amyotrophic lateral sclerosis and frontotemporal dementia. Axovant would pay an upfront $10 million, $655 million in milestones plus royalties.
Immatics received $54 million upfront to collaborate with Genmab to discover bispecific immuno-oncology therapies using its XPRESIDENT high throughput platform, which identifies human leukocyte antigen-peptides found on the cell surface of tumor cells using mRNA sequencing analysis. Immatics would also receive up to $550 million in milestones plus royalties.
Editor’s note: This article is excerpted from Paul D’Souza’s full Q2 licensing report, which features almost a dozen additional deal summaries, including a look at Sanofi’s agreement for Translate Bio’s mRNA vaccine for five infections, Axovant’s alliance with Oxford BioMedica’s Prosavin for Parkinson’s and, in APAC, CStone’s arrangements with both Agios and Blueprint. In the full report, the author also provides analysis of the industry’s most prolific dealmakers in Q2 as well as a look at options and terminations.
For a broader view of deals activity in H1 2018, join our webinar on October 3.
Note that all data contributing to this analysis was sourced from Cortellis Competitive Intelligence from Clarivate Analytics. For more information: clarivate.com/cortellis-competitive-intelligence.