During the first quarter of 2018, Cortellis Competitive Intelligence registered 879 new deals (excluding mergers & acquisitions) with a total disclosed deal value of approximately $35.2 billion as part of its ongoing coverage of licensing activity in the life sciences sector. This compares to 1,203 and $26.2 billion in the fourth quarter of 2017 and 1,158 and $31.8 billion in the first quarter of 2017. It meant a significant increase in the total disclosed deal value compared to these two previous periods (+34% and +10.7% respectively), and included the $5.8 billion pact between Merck & Co. and Eisai which became the highest value deal in the last four year-opening quarters. However, the first quarter of 2018 did not report a high number of signed agreements versus the fourth quarter 2017 and the first quarter of 2017 (-27% and -24% respectively), reaching similar data to the first quarter of 2014 with a total of 931 agreements covered (Figure 1).
Figure 1: Deal activity in the first quarter from 2010 – 2018. (Source: Cortellis Competitive Intelligence, Clarivate Analytics)
High-value deals worth $0.5B or more
We tracked 48 high-value new licensing deals worth in excess of $100 million during the first quarter of 2018. The following is a selection of deals valued at more than $0.5 billion, which were mostly milestone-based with three different agreements topping $3 billion (Figure 2).
We tracked 48 high-value new licensing deals worth in excess of $100 million during the first quarter of 2018.”
Merck & Co and Eisai reach a $5.8 billion oncology partnership to combine lenvatinib and pembrolizumab
The Japanese Eisai and the U.S. Merck (MSD) agreed to jointly develop and commercialize Eisai’s lenvatinib mesylate, an inhibitor of multiple tyrosine kinases including Kit/Kdr, RET and PDGFR beta, and MSD’s pembrolizumab, anti-programmed cell death protein-1 (PD-1) humanized IgG4 monoclonal antibody, as monotherapies or in combination, initially for the treatment of renal cell carcinoma (currently in phase III and granted a Breakthrough Therapy Designation by the FDA) and with planned development for six other oncology indications including, endometrial cancer and non-small cell lung cancer. In 2015, the companies had already signed a collaboration deal to evaluate both drugs for endometrial carcinoma. With this new contract, Eisai would receive an upfront of $300 million, up to $650 million in options, $450 million in R&D expenses and up to $4.355 billion in milestone fees.
During the first quarter of the year, licensing in the Asia-Pacific (APAC) region was led by China-based companies with 74 disclosed agreements, while Japanese-based organizations disclosed the most amount of financial value with more than $9 billion. Japanese-based Eisai and Takeda signed the two highest value deals for the period, with the $5.8 billion oncology partnership with Merck and $2.23 billion pact with Singapore-based Wave Life Sciences covering its antisense oligonucleotides, respectively (Figure 2).
Figure 2: Total deals and deal sized disclosed in Q1 of 2018 by certain APAC-based companies (Source: Cortellis Competitive Intelligence, Clarivate Analytics)
TG Therapeutics, an U.S.-based company, gained exclusive worldwide rights, excluding Asia but including Japan, to Jiangsu Hengrui Medicine’s TG-1701, an oral covalently bound BTK tyrosine kinase inhibitor in phase I, in combination with the monoclonal antibodies ublituximab (TG-1101) and umbralisib (TGR-1202) against hematologic malignancies, as well as TG-1702, another covalently bound BTK tyrosine kinase inhibitor in preclinical development. Hengrui would receive an upfront payment of $1 million in stock and approximately $350 million in milestone fees as well as royalties.
Another U.S. biotech company, Arcutis, signed an option agreement covering Jiangsu Hengrui Medicine’s SHR-0302 for the potential treatment of dermatological diseases in the U.S., Europe and Japan. SHR-0302 is a selective JAK inhibitor currently in phase II for rheumatoid arthritis in China. The deal was worth up to $233 million plus royalties.
Oncologie, headquartered in the U.S. with operations in China, would be responsible for German Mologen’s lefitolomid, a TLR9 agonist in phase I study with ipilimumab in oncology patients, in China, Hong Kong, Macao, Taiwan and Singapore. Mologen received €5 million in upfront fees (approximately $5.9 million, including cash and stock) and was eligible to receive €100 million (approximately $117.8 million) in milestone payments and royalties.
Chinese firm CANbridge inlicensed California-based Puma Biotechnology’s neratinib, an oral kinase inhibitor approved in the U.S. for HER2-positive breast cancer, in mainland China, Taiwan, Hong Kong and Macau. In return, Puma received an upfront fee of $30 million and was eligible to receive milestone payments of up to $255 million.
NeuroBo, with headquarters in Boston, acquired worldwide rights to Korean Dong-A’s natural products DA-9801 in phase II for diabetic neuropathy and DA-9803 in preclinical for neurodegenerative diseases. Dong-A received upfront payments of $7 million ($5 million for DA-9803 and $2 million for DA-9801), a 29% stake in NeuroBo (24% for DA-9803 and 5% for DA-9801) and $178 million in potential milestone payments for DA-9801.
U.S.-based company Mirati Therapeutics granted sitravatinib rights to BeiGene, with headquarters in Beijing, in Australia, New Zealand and Asia, excluding Japan. Sitravatinib is an investigational receptor tyrosine kinase inhibitor (RTKs), including TAM family receptors (TYRO3, Axl, MER), split family receptors (VEGFR2, KIT) and RET. Mirati earned a $10 million upfront fee and was eligible to receive up to $123 million in milestone fees plus royalties.
This article is an excerpt from the author’s full, in-depth Q1 life sciences licensing report, based on data from Cortellis Deals Intelligence and Cortellis Competitive Intelligence. Download the full report here.
More information on BioPharma investment trends is available in the on-demand webinar, “Trends in Dealmaking, Fundraising, and Partnerships: The Changing Landscape,” co-presented by Clarivate Analytics and BIO. Watch now.