Deals of the Week Goes Hollywood

It's not every day that a biopharma company swaps dreams of developing a blockbuster for dreams of developing a different sort of blockbuster (GSK's documentary dreams notwithstanding) but today ImaRx Therapeutics is doing just that. The erstwhile vascular therapeutics play was trading about 99% off its IPO price last we checked in -- investors had seemingly given up on blockbusters of the first variety.

Well, say goodbye to ImaRx, now just a shell of a company anyway. Say hello to Sycamore Films.

Sadly it's unfortunately not very uncommon for a biotech to meet its demise, especially in today's environment. But it did get us thinking. If the biopharmaceutical industry were a movie, what would it be? (C'mon people, it's Friday.) The first one that springs to mind for this blogger is Risky Business. (Of course the medical devices world needs its own movie too: this bit of Medtronic news has us thinking about the end of Se7en ... "what's in the box??!?!")

Your suggestions in the comments, pls. Meanwhile, not so long ago in a conference room not so far away . . .

Gen-Probe/Pacific Biosciences: Molecular diagnostics provider Gen-Probe, one of the original developers of nucleic-acid-based diagnostic test platforms, is getting into the sequencing game, via a $50 million investment in privately held Pacific Biosciences, part of the sequencing company’s Series F. The companies will also co-develop systems based on PacBio’s single-molecule sequencing technology aimed at the clinical diagnostics market. They will work exclusively with each other for two-and-a-half years on the program. Several other companies including IBM, Illumina, Life Technologies, Oxford Nanopore Technologies, and newcomer Ion Torrent are developing real-time, single-molecule sequencing technologies, with some geared towards eventually being able to look at the entire human genome. The move by Gen-Probe appears to be part of a strategy gaining favor with life science tools providers to provide an integrated sequencing offering including sample prep, sequence measurement, assays, and perhaps even bioinformatics in one package. Expectations are that technical validation of these systems will come in the next five years, and with sequencing costs rapidly decreasing – one start-up recently suggested the capability for whole-genome sequencing at under $100 around year-end – the clinical diagnostics market appears to be within reach for these companies. --Mark Ratner

Tranzyme/Norgine: In seeking a European development and commercialization partner for ulimorelin, a ghrelin agonist about to enter Phase III in gastrointestinal dysmotility disorders such as post-operative ileus, Tranzyme Pharma thinks it found the perfect fit. Tranzyme’s June 16 tie-up with Netherlands-based Norgine BV includes only $8 million up-front. But more importantly to the North Carolina biotech, the deal leaves it with North American rights to its lead program, while Norgine obtains rights in Europe, Australia, New Zealand, the Middle East and Africa. In addition to Norgine’s focus on gastrointestinal disorders, CEO Vipin Garg said one of the factors he likes best about the partnership is the regional nature of the deal and in particular that Norgine is “pan-European” rather than specializing in its home market or just a few countries. “A lot of companies want worldwide rights nowadays for products [or] just US or North American rights," told “The Pink Sheet” DAILY. “In our case, we wanted to retain those rights for ourselves and perhaps partner them later or even have the ability to build a small sales force” to sell the drug to hospital-based docs. Beyond the upfront payment, Tranzyme also is eligible to earn up to $150 million in development, approval and commercial milestones; Garg would not break down the biobucks specifically other than to say that the first milestone would be realized upon completion of the first Phase III trial.—Joseph Haas

Bayer/OncoMed: OncoMed Pharmaceuticals pulled in an eyebrow-raising $154 million Series B round in 2008, but investors apparently aren't the only ones that think the company is on to something. The cancer stem cell-focused biotech has signed its second major pharmaceutical collaboration – the only two significant deals in the space to date. The Redwood City, Calif., firm received $40 million upfront June 17 from Bayer Schering Pharma to co-discover and co-develop five agents that target the Wnt cancer stem cell pathway. The new partnership follows a 2007 deal with GlaxoSmithKline in which privately held OncoMed received an undisclosed upfront payment and equity investment in exchange for option rights to four monoclonal antibodies targeting the Notch cancer stem cell pathway. With potential discovery, development, regulatory and sales milestones, the deal with GSK was valued at up to $1.4 billion. The Bayer/OncoMed tie-up is similarly risk-adjusted: for starters, the German pharma gets an option to license development and commercial rights to antibody and protein therapeutics developed under the collaboration up through completion of Phase I. OncoMed can receive up to $397.5 million in milestones for each antibody or protein therapeutic developed and commercialized successfully, along with double-digit sales royalties. OncoMed will also assist Bayer in developing small molecule cancer therapies that target the Wnt pathway, which could earn it up to $112 million per successful candidate.--JAH

Neurocrine/Abbott: Less than a month after Neurocrine Biosciences said it was seeking a partner to advance into Phase III its novel gonadotropin-releasing hormone (GnRH) antagonist, elagolix, it sealed a deal with Abbott. Abbott agreed to pay $75 million upfront to develop and globally commercialize elagolix for the treatment of endometriosis-related pain, and undertake Phase II studies for the treatment of uterine fibroids. Neurocrine, a bit of a comeback tale since losing lead asset indiplon a few years ago, also could earn up to $500 million in milestones, mainly tied to pre-commercial achievements, and will receive undisclosed sales royalties. In addition to endometriosis and uterine fibroids, Neurocrine believes elagolix could be used to treat prostate cancer and benign prostatic hyperplasia, since the drug lowers testosterone levels in men. Though Neurocrine had been in talks with several potential partners, Abbott's experience with the GnRH mechanism made it an ideal fit, President and Chief Executive Kevin Gorman told “The Pink Sheet” DAILY. Abbott sells Lupron (leuprolide), an injectable GnRH agonist, which is one of two approved therapies for endometriosis. Leuprolide also is indicated to treat prostate cancer, which Gorman said adds value to the deal since elagolix is in preclinical studies for this use.--Carlene Olsen

Neurocrine/Boehringer Ingelheim: Sequels aren't usually as good as the original and this is frankly no exception. But Neurocrine's second deal this week, announced less than a day after its deal with Abbott, is nothing to sniff at either. Neurocrine on Thursday inked a pact with Boehringer Ingelheim to discover and develop small molecule GPR119 agonists to treat type-2 diabetes and other indications. Neurocrine gets $10 million up-front plus research funding and is elgible for development, regulatory and commercial milestone payments and royalties on any products BI develops from the collaboration. GPR119 is a GPCR thought to play a variety of roles in inducing insulin secretion; BI has made no secret of its desire to become a player in diabetes, though it hasn't done many deals. --CM

Covidien/Somanetics: Call it the Covidien Creep. Just as the medical device company moved slowly into the vascular and neurovascular business with the successive acquisitions of Bacchus Vascular, VNUS Technologies and this month's $2.6 billion acquisition of ev3 Inc., Covidien now is building its oximetry and monitoring products with its second sizable acquisition in less than a year with the purchase of publicly traded Somanetics Inc. Covidien agreed to pay $250 million, or $25 per share, for the company, seller of the INVOS System, which measures blood oxygen levels in the brain of surgical patients so clinicians can detect and correct a variety of threatening complications. The technology pairs nicely with the Bispectral Index, the only system capable of measuring the effects of anesthesia and sedatives on the brain. Covidien added the Bispectral to its oximetry and monitoring group last year by acquiring Aspect Medical Systems Inc. for $210 million. The combined revenues from Aspect and Somanetics will add $150 million in annual revenue to the Oximetry and Monitoring group, which reported $636 million in revenue in each of the last two fiscal years. Even with the additional revenue, oximetry and monitoring will likely be the fourth largest in Covidien’s medical device unit but that could change with future acquisitions.--Tom Salemi

Basilea/Almirall: Switzerland's Basilea Pharmaceutia has signed on Spain's Almirall to be the exclusive distributor of Basilea's eczema treatment Toctino (alitretinoin) in 10 European markets and Mexico. Now Basilea can benefit from broader sales of Toctino without making costly investments to build its own commercial infrastructure in Austria, Belgium, Czech Republic, Italy, Luxembourg, Mexico, the Netherlands, Poland, Portugal, Slovakia and Spain. At the same time, Almirall, a top 10 dermatology country in Europe, gains a novel therapy for its portfolio – Toctino is the only therapy approved for adults with severe chronic hand eczema unresponsive to potent topical corticosteroids. Almirall will make an upfront payment of €5 million, and Basilea also could receive milestone payments related to the launch of Toctino in two key markets of up to €11 million, plus €11 million more in pre-specified sales milestones. Basilea also retains the right to co-promote Toctino in selected markets. Though Basilea would not disclose its transfer price for Toctino, Merrill Lynch analysts estimate that the biotech will receive 44 percent to 55 percent of the product's revenues generated in Almirall's distribution markets. Toctino's fortunes are especially important for Basilea given the high-profile failure and break-up with Johnson & Johnson over its next likely commercial candidate, the anti-infective drug ceftobiprole. Since then, the biotech has made aggressive moves to regain its footing, including a licensing deal with Astellas Pharma earlier this year. --CO

image from flickr user emma.kate used under a creative commons license

Notes from BIO: Bayer Quiet on Onyx Accusation

What to make of Onyx Pharmaceuticals' announcement this morning that it had been unable to peacably resolve a dispute with Nexavar partner Bayer over a fluorinated version of that kidney/liver cancer drug? Most observers we've talked to about it here at BIO suggest that it's one sign the broader partnership is under stress.

"That can't be good," said one biotech CEO. "You gotta wonder about the entire partnership because of this." Other biotech types agreed, suggesting that even if Bayer's activities are defensible contractually, they wouldn't reflect well on the mid-sized pharma's partnering rep.

Onyx's complaint alleges that Bayer has, outside the companies' 15-year partnership, been working in secret on a version of Nexavar identical in all ways except a fluorine atom is subbed in for a hydrogen atom. According to the Onyx press release: "The new molecule had been identified in 1998 during the research collaboration period by the companies' joint research teams. Discussions with Bayer regarding Onyx's rights to fluoro-sorafenib under the companies' 1994 collaboration agreement were not productive."

So does the fact that the long-standing partners couldn't play nice and get this settled in private suggest all is not particularly well with their alliance? We sat down at BIO with Bayer's global SVP of business development and licensing Michael Yeomans, for a broad discussion of Bayer's business development endeavors. On the Onyx situation Yeomans couldn't get specific. “I can’t say much [about the specifics of the Onyx claims] because we have not yet received a complaint yet,” says Yeomans. “ We will evaluate it once we have it. ”

“We believe that Onyx has no rights to the compound and we will defend ourselves against the complaint,” he added.

But Bayer will present Phase II data on the compound at ASCO, which perhaps triggered the Onyx announcement.

While You Were Saying Goodbye to Summer

going, going, gone.

Outta here like a Ryan Howard shot to deep right field, vanished like Keyser Soze, Summer 2008 is now just a memory. Hey, at least football season has begun, right? Below, our roundup of what you might have missed while enjoying that last BBQ of the season.

• European Society of Cardiology: News came thick and fast out of this annual meeting in Munich. The results of a potentially important study of stents vs scalpels in treating clogged arteries are in, and surgery has come out on top. Lilly and Daiichi's prasugrel got a boost in diabetics prior to its 26th September FDA deadline. An analysis of the previously released Triton-Timi 38 trial showed that prasugrel was more effective than standard-of-care clopidogrel (Plavix) in that patient population, reports Reuters. Pronova/GSK's Omacor (fish oil) met both primary endpoints in a Phase III outcomes study in patients with heart failure, who were 9% less likely to die than patients given placebo. AZ's Crestor didn't fare as well in a similar population. Finally, Bayer said it would speed up development of rivaroxaban--putting a little extra pressure on Pfizer/BMS, whose rival candidate apixaban hit a snag last week, as we wrote about here. For more news out of the meeting, click here.
• Shionogi & Co. is the latest in a pretty long line of Japanese pharmaceutical companies buying up cheaper American firms to help expand into western markets. Shionogi bought Sciele Pharma for $1.1 billion ($31/share, a 61% premium to the stock's previous close) plus the assumption of $325 million in debt, the companies announced on Monday. Atlanta-based Sciele had revenues of more than $382 million in 2007, and specializes in women's health, cardiovascular disease, diabetes, and pediatrics. For more on Japanese Pharma appetites, see here, and look for a feature on these trends in an autumn issue of IN VIVO.
  
• Oncology expert Prof. Karol Sikora of CancerPartnersUK diagnoses the ills of the country's NHS and writes this prescription in The Sunday Times: "Radical structural change to the NHS is vital. Competition and choice drive up quality and access, so leading to greater value, just as we’ve seen in other consumer areas such as mobile phones, budget airlines and the high street. Sensible incentives linked to performance and outcomes are essential. Drastic reform, not more money, is now needed."
• Novacea, which begun a strategic review in May after Schering-Plough canceled an alliance around its entered an agreement to merge with Trancept Pharmaceuticals (nee TransOral Pharmaceuticals, click here for our admittedly old 2003 profile of the firm). The latter company, a privately-held specialty pharma that specializes in tweaking the pharmacokinetics of CNS compounds, has raised more than $70 million in venture funding but--surprise, surprise--has been unable in this climate to tap the public markets. If investors buy into this reverse merger, TransCept backers will hold 60% of the combined company, which, the companies say, will have enough cash to pursue FDA approval for and launch its Intermezzo lozenge formulation of the insomnia drug zolpidem (the now-generic Ambien).
• Lipitor ads are back after six months off the air, but you mean nasty bloggers won't have Dr Jarvik to kick around any more! According to the WSJ, Jarvik's out and heart attack survivor John Erlendson is in. What are the odds that he's a rower?
• In the latest installment of its A1 "The Evidence Gap" series, The New York Times asks why more than three million people still take Vytorin/Zetia every day, and notes that some prominent cardiologists are now calling for it to be taken off the market.
  
• The Guardian adds up the challenges facing Big Pharma and, well, that's pretty much it. Would have been nice to see some answers in there too.
  
• Speaking of The Guardian, Ben Goldacre's Bad Science (the book) is on shelves now (at least in the UK). Go on, buy one. And if you haven't already, click the link to his web site in our blogroll to the right to get a preview.
  

While You Were Dominating the Competition

If you were too busy playing in the Wimbledon semis and finals this weekend (or maybe just watching) to keep up with the news, IN VIVO Blog is here to help.

• Inhibition! Some news out of the International Society on Thrombosis and Haemostasis in Geneva this weekend. First up, Bayer's rivaroxaban was significantly more effective than Sanofi-aventis' Lovenox in preventing blood clots after knee surgery, Reuters reports. Rivaroxaban, a Factor Xa inhibitor, is being developed with Johnson & Johnson. Another Factor Xa inibhitor, Pfizer and BMS' apixiban (which is approximately a year behind rivaroxaban in development), also posted solid results, in a mid-stage trial. Reuters has the story.
  
• Indecision! UK's National Institute for Clinical Excellence (NICE) has changed its mind, and now considers Eli Lilly's Alimta cost-effective in treating mesothelioma in certain patients.


• Interference!! Roche and Alnylam announced this morning a broad alliance in RNAi therapeutics, worth up to $1 billion. Alnylam gets $331 million up-front in cash and equity payments. We hope you're not all RNAi'd out cause there'll be more on this later ...