Pharma Partners: Drug Developments Highlights from 2014
Partnering is a vital vehicle to drive innovation and eventual commercialization. So what are some of the most promising deals thus far in 2014?
One important measure of pharmaceutical industry activity is the level of partnering activity among pharmaceutical companies, particularly the large pharmaceutical companies. Decisions on which drug candidates or companies to invest is a key part of any company’s strategy and also reveals the overall direction of drug development. This year thus far has been an interesting one as the pharmaceutical majors forge new alliance models, establish R&D pacts with each other, and place their hopes on select drug candidates with small/emerging pharmaceutical companies.
New models in drug development
In perhaps one of the more interesting deals thus far, earlier this month, AbbVie and Calico formed a R&D collaboration to discover, develop, and market new therapies to treat age-related diseases, including for neurodegeneration and cancer. Calico is a Google-backed life sciences company led by Arthur D. Levinson (former chairman and CEO of Genentech) and Hal V. Barron (former executive vice president and chief medical officer of Genentech). Under the agreement, Calico will use its scientific expertise to establish a R&D facility, with a focus on drug discovery and early-drug development with AbbVie providing scientific and clinical development support and commercial expertise. AbbVie and Calico will each initially provide up to $250 million to fund the collaboration with the potential for both sides to contribute an additional $500 million. Calico will be responsible for research and early development during the first five years and continue to advance collaboration projects through Phase IIa for a 10-year period. AbbVie will support Calico in its early R&D efforts and, following completion of Phase IIa studies, will have the option to manage late-stage development and commercial activities. Both parties will share costs and profits equally.
Following the announcement with AbbVie, Calico formed a research pact with UT Southwestern Medical Center and 2M Companies, an investment company, to advance research and drug development for neurodegenerative disorders caused by the aging and death of nerve cells, with an emphasis on the molecular target of P7C3 compounds, a class of drugs showing initial promise to address neurodegeneration. The research shows these drugs activate a cellular enzyme involved in energy metabolism, known as NAMPT (nicotinamide phosphoribosyltransferase), which is critical to the proper functioning and survival of cells. UT Southwestern previously licensed the P7C3 compounds to 2M, and 2M and Calico have now entered into a new license agreement under which Calico will take responsibility for developing and commercializing the compounds resulting from the research program.
In another Google-related drug development deal, Alcon, the eye care division of Novartis, formed an agreement with Google Inc. to in-license its “smart lens” technology for all ocular medical uses. The agreement with Google[x], a team within Google that is devoted to finding new solutions to large global problems, provides Alcon with the opportunity to develop and commercialize Google’s “smart lens” technology with respect to eye care and to further enhance Alcon’s pipeline and position in contact lenses and intraocular lenses. The smart lens technology involves non-invasive sensors, microchips, and other miniaturized electronics that are embedded within contact lenses.
Companion diagnostics, which are used to provide information for a corresponding therapeutic product, represent a growing area of interest for pharma companies, with certain companies, such as Roche, already active in this field. Earlier this year, AstraZeneca joined this effort by forming a collaboration with the gene-sequencing company, Illumina, to develop a next-generation sequencing (NGS) platform for companion diagnostic tests to apply across AstraZeneca’s oncology portfolio. Illumina also formed strategic partnerships with Janssen Biotech and Sanofi to develop the NGS-based oncology test system. The pact with Illumina is the third diagnostic collaboration formed by AstraZeneca this year. It had earlier announced separate agreements with Roche and Qiagen to develop tests that analyze the DNA from lung cancer patients’ tumors circulating in their blood to determine their epidermal growth factor receptor mutation status.
Earlier this year, Allied Minds, a science and technology development and commercialization company, and Bristol-Myers Squibb formed Allied-Bristol Life Sciences LLC, a new jointly owned enterprise to identify and foster research and pre-clinical development from university research institutions across the United States. For programs identified by the new enterprise, university researchers will be able to access Bristol-Myers Squibb’s drug-discovery research expertise, and Allied Minds’ financial and management experience. The companies are jointly funding Allied-Bristol Life Sciences, which will form and fund new companies to conduct feasibility and full-phase discovery programs. Once a program succeeds in identifying a pre-clinical candidate, Bristol-Myers Squibb will have the option to acquire the company from Allied-Bristol Life Sciences under pre-agreed terms.
Johnson & Johnson Innovation LLC, a dedicated entity to accelerate early-stage innovation by forming collaborations between entrepreneurs and Johnson & Johnson’s global healthcare businesses, recently announced 12 new alliances with life science companies and research institutes. Johnson & Johnson Innovation is the coordinating body of J&J’s innovation centers, which consist of four regional hubs (Boston, London, Shanghai, and California). The early-stage collaborations represent recent R&D alliances facilitated by the company’s Boston, California, and London innovation centers and include technologies such as 3-D printing for orthopedic trauma, creating new brown fat for metabolic diseases, and advancing treatments for lymphoma, rheumatoid arthritis, prostate cancer, dementia, Alzheimer’s, diabetes, and insomnia. Johnson & Johnson Innovation also works with Johnson & Johnson Development Corporation, the venture capital arm of J&J, to invest in companies.
Big Pharma to Big Pharma
This year has also seen several large deals between the large pharmaceutical companies. This week, AstraZeneca and Eli Lilly formed an agreement to jointly develop and commercialize AZD3293, an oral beta secretase cleaving enzyme (BACE) inhibitor currently in development as a potential treatment for Alzheimer’s disease. Under the deal, Lilly will pay AstraZeneca up to $500 million in development and regulatory milestone payments. AstraZeneca expects to receive the first milestone payment of $50 million in the first half of 2015. The companies will share all future costs equally for the development and commercialization of AZD3293 as well as net global revenues post-launch. AstraZeneca and Lilly aim to progress AZD3293 rapidly into a Phase II/III clinical trial in patients with early Alzheimer’s disease. Lilly will lead clinical development, working with researchers from AstraZeneca’s Innovative Medicines Unit for neuroscience while AstraZeneca will be responsible for manufacturing. The companies will take joint responsibility for commercialization of AZD3293.
Several pharmaceutical companies have partnered to evaluate potential combination therapies of investigational immunotherapies. In February 2014, Pfizer and Merck & Co. signed an agreement to explore the therapeutic potential of Merck’s immunotherapy, pembrolizumab, in combination with two Pfizer oncology assets, Inlyta (axitinib) in renal cell carcinoma and PF-05082566 (PF-2566), Pfizer’s investigational, fully humanized monoclonal antibody that stimulates signaling through 4-1BB (CD-137), a protein involved in regulation of immune cell proliferation and survival. Bristol-Myers Squibb and Ono Pharmaceutical Co., Ltd. signed a strategic collaboration agreement to jointly develop and commercialize multiple immunotherapies as single agents and combination regimens in Japan, South Korea, and Taiwan. As part of the agreement, Bristol-Myers Squibb and Ono will jointly develop and commercialize Bristol-Myers Squibb’s immontherapy, Opdivo (nivolumab), which was approved in Japan earlier this year, and another immunotherapy by Bristol-Myers Squibb, Yervoy (ipilimumab), across a broad range of tumor types. In July 2014, AstraZeneca formed a clinical study collaboration with Kyowa Hakko Kirin for a Phase I/Ib immuno-oncology study that will evaluate the safety and efficacy of two separate combinations of three investigational compounds, which includes AstraZeneca’s anti-PD-L1 immune checkpoint inhibitor, MEDI-4736.
In another area, Mitsubishi Tanabe Pharma and AstraZeneca formed a three-year research collaboration in the area of diabetic nephropathy. The aim of the collaboration is to validate and progress research targets and molecules into clinical development. The research will be performed in parallel at Mitsubishi Tanabe Pharma’s facilities in Japan and AstraZeneca’s Cardiovascular and Metabolic Disease Innovative Medicines Unit in Mölndal, Sweden.
The pharmaceutical majors also are proceeding with collaborations with smaller companies as well as with academic/research institutes. Some interesting deals include a pact between Infinity Pharmaceuticals, Inc., a biopharmaceutical company, and AbbVie to develop and commercialize duvelisib, Infinity’s oral inhibitor of phosphoinositide-3-kinase (PI3K)-delta and PI3K-gamma, for treating cancer. Under the deal, Infinity receives an upfront payment of $275 million and is eligible to receive up to $530 million in additional payments for achieving development, regulatory, and commercial milestones, including up to $405 million for milestones through the first commercial sale of duvelisib. Development and commercialization activities under the collaboration will be managed through a shared governance structure. In the US, Infinity and AbbVie will jointly commercialize duvelisib, assuming regulatory approval, with Infinity booking sales, and will share equally in any potential profits or losses. Outside the US, AbbVie will be responsible for conducting and funding any commercialization of duvelisib, and Infinity is eligible to receive tiered royalties on net product sales, with percentages ranging from 23.5% to 30.5%.
To boost its respiratory franchise, AstraZeneca formed an agreement with Almirall, a Barcelona-based pharmaceutical company, by which Almirall will transfer its rights to its respiratory franchise to AstraZeneca for an initial consideration of $875 million upon completion of the deal and up to $1.22 billion in development, launch, and sales-related milestones. AstraZeneca also agreed to make various sales-related payments. AstraZeneca also signed an exclusive global license agreement with Synairgen Plc, a company specializing in respiratory diseases, for SNG001, an inhaled interferon beta, which is in clinical development for treating respiratory tract viral infections in patients with severe asthma. Under the agreement, AstraZeneca will pay Synairgen a $7.25-million upfront fee and potential development, regulatory, and commercial milestones of up to $225 million. In addition, AstraZeneca will pay tiered royalties ranging from single-digit up to mid-teens on commercial sales. AstraZeneca will be responsible for future development costs.
Immunotherapies are also the basis of several collaborations between the larger companies and smaller pharmaceutical companies. In August 2014, Bristol-Myers Squibb partnered with Celgene to evaluate a combination therapy of Bristol-Myers Squibb’s nivolumab and Celgene’s nab technology-based chemotherapy Abraxane (paclitaxel protein-bound particles for injectable suspension) (albumin-bound), in a Phase I study. Incyte Corporation and Bristol-Myers Squibb formed a clinical trial collaboration earlier this year to evaluate the combination regimen of Bristol-Myers Squibb’s, nivolumab, and Incyte’s oral, small-molecule indoleamine dioxygenase-1 (IDO1) inhibitor, INCB24360, in a Phase I/II study. Multiple tumor types will be explored in the study, which could potentially include melanoma, NSCLC, ovarian, colorectal, squamous cell carcinoma of the head and neck, and diffuse large B-cell lymphoma. Bristol-Myers Squibb also formed a clinical trial collaboration with the biopharmaceutical company Celldex Therapeutics to evaluate the safety, tolerability, and preliminary efficacy of nivolumab, with varlilumab, Celldex’s CD27-targeting investigational antibody in a Phase I/II study. Also in July 2014, MedImmune, the biologics arm of AstraZeneca, partnered with Advaxis, Inc., a US-based biotechnology company developing cancer immunotherapies, for a Phase I/II immunotherapy study to evaluate the safety and efficacy of AstraZeneca’s MEDI4736, in combination with Advaxis’ lead cancer immunotherapy vaccine, ADXS-HPV, as a treatment for patients with advanced, recurrent, or refractory human papillomavirus (HPV)-associated cervical cancer and HPV-associated head and neck cancer.
Drug delivery is also an important focus for collaboration, and in a particularly large deal is an exclusive, potential $925 million licensing agreement between Sanofi and MannKind Corporation, a Valencia, California biopharmaceutical company, for the development and commercialization of Afrezza (insulin human) inhalation powder, a new rapid-acting inhaled insulin therapy for adults with Type 1 and Type 2 diabetes.The companies plan to launch Afrezza in the United States in the first quarter of 2015. Under the agreement, MannKind will receive an upfront payment of $150 million and potential milestone payments of up to $775 million. The milestone payments are dependent upon specific regulatory and development targets, as well as sales thresholds. Sanofi and MannKind will share profits and losses on a global basis, with Sanofi retaining 65% and MannKind receiving 35%. Sanofi has agreed to advance to MannKind its share of the collaboration’s expenses up to a limit of $175 million. Sanofi will be responsible for global commercial, regulatory, and development activities. Under a separate supply agreement, MannKind will manufacture Afrezza at its manufacturing facility in Danbury, Connecticut. In addition, the companies are planning to collaborate to expand manufacturing capacity to meet global demand as necessary. MannKind received approval of Afrezza from the US Food and Drug Administration in June 2014 to improve glycemic control in adult patients with diabetes mellitus. The product consists of Afrezza inhalation powder delivered using a small inhaler.
In another drug-delivery and diabetes alliance, Sanofi and Medtronic Inc. signed a memorandum of understanding to enter into a global strategic alliance to focus on two key priorities: the development of drug-device combinations and the delivery of care-management services to improve adherence, simplify insulin treatment, and help people with diabetes better manage their condition. One of the priorities of the alliance will be to deliver novel drug-device combinations, including new form factors that are affordable, convenient , and easy to-use to increase therapy adherence and deliver better outcomes.
In terms of newer technologies, in August 2014, Roche agreed to acquire Santaris Pharma, a privately held biopharmaceutical company based near Copenhagen, Denmark. Santaris Pharma’s key technology is its proprietary Locked Nucleic Acid (LNA) platform to develop RNA-targeting therapeutics. Roche plans to maintain Santaris Pharma’s operations in Denmark, where the company’s existing site will be renamed Roche Innovation Center Copenhagen. Under the deal, Roche will make an upfront cash payment of $250 million to Santaris Pharma shareholders and make additional contingent payments of up to $200 million based on the achievement of certain predetermined milestones.
Earlier this month, the University of Pennsylvania (Penn) unveiled plans under its alliance with Novartis for the construction of a new 30,000 square-foot facility, the Center for Advanced Cellular Therapeutics (CACT), on the Penn Medicine campus in Philadelphia. The CACT will be the focal point for research using chimeric antigen receptor (CAR) technology as part of an alliance formed between Penn and Novartis in 2012 to further study and commercialize novel CAR therapies. CAR-based therapies enable a patient’s T cells to be reprogrammed outside of the body so when they are re-infused into the patient, the T cells have the ability to “hunt” and destroy the cancer cells. The CACT, which will be funded in part through a $20-million investment from Novartis, will be devoted to the discovery, development, and manufacturing of personalized cellular cancer therapies based on CAR through a joint R&D program. In July 2014, the US Food and Drug Administration granted Breakthrough Therapy designation to the Penn-developed CTL019, an investigational CAR therapy for treating adult and pediatric acute lymphoblastic leukemia. The therapy is part of the Novartis-Penn alliance.
Pfizer and Cellectis, a French company specializing in immunotherapy, formed an agreement earlier this year to develop CAR T-cell (CAR-T) immunotherapies in the field of oncology directed at select targets. Cellectis’ CAR-T platform technology provides a proprietary, allogeneic approach (using engineered T-cells from a single donor for use in multiple patients) for developing CAR-T therapies that is distinct from other autologous approaches (engineering a patient’s own T-cells to target tumor cells). Cellectis will receive an upfront payment of $80 million, as well as funding for R&D costs associated with Pfizer-selected targets and the four Cellectis-selected targets within the collaboration. Cellectis is eligible to receive development, regulatory, and commercial milestone payments of up to $185 million per Pfizer product. Cellectis is also eligible to receive tiered royalties on net sales of any products that are commercialized by Pfizer. Additionally, Pfizer will be entering into an equity agreement to purchase approximately 10% of Cellectis
Boehringer Ingelheim has established a research alliance with the University of Toronto through the Toronto Recombinant Antibody Center (TRAC), together with Toronto-based University Health Network, a research hospital affiliated with the University of Toronto, and Mount Sinai Hospital, an acute-care academic health sciences center affiliated with University of Toronto, to characterize new therapeutic targets in the field of ubiquitin biology. Alterations of the ubiquitin system are linked to many common diseases such as cancer, diabetes, inflammation, and several central nervous system disorders.
Bayer HealthCare and the University of Oxford, UK, have formed a strategic research alliance in the area of gynecological therapies. Bayer and the University of Oxford will share responsibilities from basic research to early clinical trials in these two diseases. Joint research projects will be performed at the University of Oxford and at the Bayer HealthCare R&D Center in Berlin, Germany.
Novartis signed an investment and option agreement with Gamida Cell, a Jerusalem-based developer of stem-cell technologies and therapeutic products, under which Novartis will invest $35 million in Gamida Cell and in return, receive a 15% equity stake in the company and an option to fully acquire Gamida Cell. The option is exercisable for a limited period of time following achievement of certain milestones connected to the development of NiCord, anticipated to be met during 2015. NiCord is an investigational stem-cell therapeutic treatment for hematological malignancies such as leukemia and lymphoma. Upon exercising the option, Novartis would pay the other shareholders in Gamida Cell cash payments of approximately $165 million and potential future payments up to $435 million, depending on certain development and regulatory milestones and on sales of Gamida Cell’s products. Gamida Cell develops stem-cell therapy products for transplantation and regenerative medicine. The company’s pipeline of stem-cell therapy products are in development to treat a wide range of conditions, including blood cancers, solid tumors, non-malignant hematological diseases (e.g., sickle cell disease and thalassemia), neutropenia, and acute radiation syndrome, autoimmune diseases, and genetic metabolic diseases as well as conditions that can be helped by regenerative medicine. Gamida Cell’s therapeutic candidates contain populations of adult stem cells, selected from non-controversial sources such as umbilical cord blood, bone marrow, and peripheral blood, which are expanded in culture.