During the third quarter of 2017, Cortellis Competitive Intelligence registered 949 new deals (excluding mergers & acquisitions) added as part of its ongoing coverage of pharmaceutical licensing activity compared to 1,007 in Q2 this year and 1,023 in Q3 the previous year.
High-value deals: potentially worth $0.5 billion or more
Approximately 40 high-value new partnerships, worth in excess of $100 million, were entered into during the third quarter of 2017. The following is a selection of deals valued at more than $0.5 billion, which were predominantly milestones-based although there were a couple that were mainly upfront-based (Figure 1).
Celgene is partnering with BeiGene on programmed cell death protein-1 (PD-1) inhibiting antibody BGB-A317 for solid tumors worldwide including the U.S., Europe and Japan except the rest of Asia. Celgene sweetened the deal by giving BeiGene exclusive rights to commercialize Abraxane (albumin-bound suspension formulation of paclitaxel; breast cancer), Revlimid (tumor necrosis factor–alpha inhibiting thalidomide derivative; myeloma), Vidaza (DNA methyltransferase inhibitor; myelodysplastic syndrome) and CC-122 (pleiotropic pathway modulator; chronic lymphocytic leukemia) in China. BeiGene stands to receive $263 million upfront, $150 million in equity release, $980 million in milestones plus royalties from BGB-A317.
Dermira has exclusive worldwide rights to Roche’s lebrikizumab, an interleukin 13-targeting recombinant antibody, for atopic dermatitis and other indications. Roche retains exclusive rights against interstitial lung diseases such as idiopathic pulmonary fibrosis. Roche would net $80 million upfront, clinical, regulatory and sales milestones of $95 million, $50 million and $160 million, respectively, and up to $1.025 billion in sales milestones for diseases other than interstitial lung disease, plus royalties.
Amgen joined forces with CytomX to advance a Probody T cell-engaging bispecific (Pb-TCB) antibody targeting multimeric protein complex CD3 and epidermal growth factor receptor against cancer. Early stage development and costs would be the responsibility of CytomX followed by Amgen for late-stage development and commercialization after which CytomX could elect to co-develop in return for less than 50% of the profit and losses in the U.S. Amgen targeted $20 million of CytomX common stock and would dispense with an upfront of $40 million, up to $455 million in milestones for the EGFR product plus up to a further $950 million in upfront and milestone payments if Amgen exercises an option for Probodies against three additional undisclosed targets (Amgen products) plus royalties. CytomX would also release up to $203 million in milestones for the CytomX products plus royalties.
Bristol-Myers Squibb identified Halozyme’s ENHANZE drug delivery technology to subcutaneously administer treatments against up to 11 immuno-oncology targets including PD-1. The platform consists of a recombinant human hyaluronidase enzyme which overcomes barriers faced with intravenous delivery. Halozyme nets $105 million upfront, milestones of up to $160 million per target ($1.76 billion in total), further milestones for combination products, plus royalties.
Ablynx gave Sanofi access to its nanobody portfolio and related platform to develop up to eight treatments against immune-mediated inflammatory diseases. Ablynx receives an upfront $26.5 million and $9 million in research funding for the first target, further funding plus option exercise fees for additional targets and potential milestones payments of up to $2.7 billion plus royalties.
AstraZeneca (AZ) and Merck will combine poly ADP ribose polymerase inhibitor Lynparza and Selumetinib mitogen-activated protein kinase inhibitor with PD-1 inhibitors Imfinzi and Keytruda primarily to improve the potential of Lynparza against cancer which has just been launched in the .U.S for ovarian cancer but has been available in Europe for two years. Merck will pay up to $8.5 billion in total, including $1.6 billion upfront, $750 million for in-license options and up to a further $6.15 billion in milestones.
After gaining non-U.S. rights to AZ’s anesthetics including Diprivan, EMLA, Xylocaine/Xylocard/Xyloproct, Marcaine, Naropin, Carbocaine and Citanest in 2016, Aspen Global captured the remaining rights for an upfront $555 million plus up to $211 million in sales milestones. This allows AZ to prioritize in the oncology, cardiovascular, metabolic and respiratory areas.
Sanofi invested heavily in the diabetes market partnering with Thermalin Diabetes to engineer insulin analogs with improved stability and performance than existing insulin treatments. Thermalin gains up to $788 million in equity investments, milestones and research-and-development services, including $9 million in upfront and initial equity payments plus royalties. Thermalin’s portfolio consists of a number of insulin analogs with tissue selective, ultra-heat-stable, long and rapid acting and ultra-concentrated properties.
WuXi and its partner Harbin Gloria licensed out with Arcus Biosciences for the development and commercialization of GLS-010 as a combination product for cancer immunotherapies in certain territories. The anti PD-1 antibody is in phase I for advanced solid tumor. Arcus dispenses $816 million including $18.5 million upfront, up to $422.5 million in milestones for 11 products incorporating GLS-010, commercial milestones of up to $375 million plus royalties.
Janssen is to deliver Bavarian Nordic’s Modified Vaccina Ankara (MVA-BN) virus-based vaccine using its AdVac adenoviral vector platform to target HIV and hepatitis B. Janssen releases an upfront $10 million, $33 million equity investment and milestones of up $836 million, plus royalties. The parties have previously partnered on the use of MVA-BN for Ebola and papilloma.
Global medical device firm Coopersurgical acquired ParaGard, an intrauterine copper contraceptive, which produces a sterile inflammatory reaction toxic to sperm, as well as the associated manufacturing facility from Teva for $1.1 billion. ParaGard generated $168 million in U.S. revenue for the year to June 2017 and now has the only approved non-hormonal intrauterine device (IUD) in the $1 billion U.S. IUD market. Closing was expected by the year end. Teva also released its high-dose levonorgestrel birth prevention pill Plan B One-Step and its collection of emergency contraception (Take Action, Aftera and Next Choice One Dose) to OTC distributor Foundation Consumer Healthcare, earning it $675 million. In parallel, private equity CVC Capital Partners completed Teva’s exit from the women’s health space by purchasing widely launched contraceptive products Ovaleap, Zoely, Seasonique, Colpotrophine and Actonel for $703 million. The divestures allow Teva to refocus efforts on the central nervous system and respiratory markets.
Prolific deal makers
The most prominent deal figures over the third quarter were the usual big biopharmaceuticals including Boehringer Ingelheim, Eli Lilly, Merck & Co, Amgen and Takeda. Below is a selection of deals focusing mainly on the trend of drug screening.
Philogen is to screen its encoded self assembling chemical (ESAC) library to identify small molecules against undisclosed indications for Boehringer Ingelheim (BI). DNA-encoded chemicals are entities conjugated to short DNA fragments to provide a unique binding code, improving the screening process over conventional techniques. Philogen has previously been employed by BI to identify treatments against acute myelogenous leukemia.
HitGen was assigned by Takeda to discover small molecules from its own 90 billion compound DNA-encoded library against undisclosed targets in return for undisclosed upfront and milestone payments. Pfizer and Merck also signed up HitGen’s services earlier this year.
Takeda also sought llama-derived VHH single-domain antibodies from Isogenica’s library for its targets in exchange for undisclosed upfront, annual license and milestone payments. VHH single domain llama antibodies have unique properties compared to conventional antibodies including temperature stability, improved antigenic site recognition and rapid tissue penetration including the blood-brain barrier.
Invenra was enlisted by Merck to identify antibodies against undisclosed targets using its ultra-high throughput mAbSeq technology. The platform simultaneously identifies and tests the functional phenotype of high affinity antibodies, reducing wasted effort on irrelevant or ineffective antibodies screened through other methods. The platform had previously been used to identify an anticancer candidate for Oxford BioTherapeutics.
Array’s kinase-directed phenotypic screening platform was to be used to identify lead candidates against undisclosed autoimmune targets for Array. Amgen would dispense with undisclosed upfront and milestone payments plus royalties. The parties have history on kinase-directed treatments with Array identifying the now discontinued antidiabetic glucokinase activator ARRY-403 in a $726 million alliance in 2009.
Recipients of the largest milestone payments during the third quarter of 2017 include Ionis, Prothena, Incyte and Heptares ($40 million, $30 million, $15 million and $15 million, respectively) (Table 1).
|Receiver||Payer||Milestone (USD M)||Drug||Indication|
|Ionis||Biogen||40||Spinraza||Spinal muscular atrophy|
|Incyte||Eli Lilly||15||Olumiant||Rheumatoid arthritis|
|Ionis||Biogen||10||Antisense therapy||Neurological disorders|
|AVEO||EUSA||4||Tivopath||Renal cell carcinoma|
Table 1: Top milestones in the third quarter
Ionis received $40 million from Biogen following the pricing approval of Spinraza (nusinersen) in Japan, where it is available for spinal muscular atrophy. The parties signed a collaboration for the antisense oligonucleotide (ASO), which redirects endogenous splicing of the survival motor neuron (SMN) 2 gene to produce functional SMN protein, in January 2012. Thatr $351 million deal has escalated to $420 million. Ionis also received $10 million from Biogen for the validation of an undisclosed neurological disease target as part of a separate $3.1 billion alliance focusing on antisense agents for neurological diseases, including Alzheimer’s and dementia, since September 2013.
The initiation of the phase II PASADENA study of PRX-002/RG-7935 for Parkinson’s disease triggered $30 million from Roche to Prothena. The worldwide collaboration for the alpha-synuclein-targeting IgG1 humanized monoclonal antibody was established in December 2013 for $630 million.
Following the approval of the widely available janus kinase 1/2 inhibitor Olumiant (baricitinib) in Japan for rheumatoid arthritis, Eli Lilly released $15 million to Incyte. The companies joined forces in December 2009 for $755 million.
The first healthy subject in a phase I study for symptoms of Alzheimer’s disease was dosed resulting in a gain of $15 million by Heptares from Allergan. Allergan came on board Heptares’ muscarinic M4 agonist and other M1/4 agonists in April 2016 for $3.4 billion.
The initiation of a phase GALACTIC-HF trial in patients with heart failure receiving omecamtiv mecarbil netted Cytokinetics $10 million from Amgen. The joint development strategy for the sarcomere-directed compound formed in 2006 for $725 million.
Options and terminations
During the quarter, there were a number of terminations and exercised options.
Janssen and MacroGenics ended their collaboration for the now discontinued JNJ-64052781 (duvortuxizumab) following treatment-related neurotoxicity in a phase I trial for hematological neoplasm. Janssen had committed $700 million to MacroGenics for the CD3/19 modulator in December 2014. The parties continue to collaborate on CD3 modulator JNJ-9383, also for hematological neoplasm, as part of a separate $740 million deal initiated in May 2016.
Daiichi Sankyo returned U.S. rights to hydrocodone combinations including CL-108 (hydrocodone + acetaminophen + promethazine) for pain and opioid-induced nausea and vomiting to Charleston Laboratories, presumably due to a non-approved NDA in February 2017 for undisclosed reasons, while Daiichi stated that it was refocusing on its current pain portfolio in the US. The $650 million alliance was formed in August 2014.
Celgene exercised a $195 million option to extend its collaboration with FORMA to evaluate additional candidates across undisclosed target families in the areas of protein homeostasis, inflammation and immunology, and neurodegeneration. The partnership, formed in April 2014 for $600 million, included an option for Celegene to acquire FORMA.
GlaxoSmithKline exercised a $38 million option to take over Adaptimmune’s T-cell therapy, GSK-3377794. Autologous T-cells are genetically engineered and transduced to express T-cell receptors specific for a number of targets including peptide NY-ESO in HLA-A2+ cancer patients. Adaptimmune will also receive $23 million in milestone payments over the transition period.
Outlook for Q4
At the beginning of the fourth quarter, deal reports continued to be added to Cortellis Deals Intelligence. In the first few days of October, early projections highlighted a number of deals focusing on enzyme inhibitors.
Merck gained an option to acquire Kalvista’s KVD-001, an injectable intravitreal plasma kallikrein inhibitor in phase I for diabetic macular edema (DME), for $752 million. Nestle Health Science obtained an exclusive worldwide option to Codexis’ CDX-6114 phenylalanine hydroxylase inhibiting enzyme against phenylketonuria and its CodeEvolver enzyme engineering platform for $357 million. Vitae’s menin-mixed lineage leukemia (MLL) protein interaction inhibitors, which target a subset of leukemia patients with a defective MLL-gene, were captured by Syndex for $174 million.
This analysis was developed with data from Cortellis Deals Intelligence and Cortellis Competitive Intelligence.
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