This Week's Biotech Deal-Making and Financing

by: The Burrill Report


In a busy week of deal-making and financing, Ambit Biosciences and Japan’s Astellas Pharma (OTCPK:ALPMF) entered into a worldwide collaboration, potentially worth $390 million, to jointly develop and commercialize FLT3 kinase inhibitors in oncology and non-oncology indications. The companies will collaborate to develop AC220 for AML and other indications. The partnership includes AC220, Ambit's lead small molecule drug that entered into a mid-stage clinical trial earlier this month in relapsed/refractory acute myeloid leukemia, and other undisclosed FLT3 kinase inhibitors.
Under the terms of the agreement, the companies will be equally responsible for the development and costs of AC220 and any additional products in the U.S. and Europe, while Astellas will have sole responsibility to fund development in all other territories. San Diego-based Ambit will receive an upfront cash payment of $40 million and will be eligible to receive pre-commercialization payments of up to $350 million.
Astellas will have sole responsibility for funding and implementing the commercialization of all products, and Ambit will be entitled to post-approval milestone payments upon the achievement of certain sales thresholds, as well as tiered double-digit royalties on net sales. In the U.S., Ambit will also have the option to co-promote AC220 and other products under a profit sharing arrangement where Astellas and Ambit share equally in profits and losses generated from U.S. sales.
Several companies raised significant amounts of venture capital. Palo Alto,
California biotech Afferent Pharmaceuticals closed a $23 million Series A round of financing that was led by Third Rock Ventures and Pappas Ventures, and included Domain Associates and New Leaf Venture Partners. Concurrent with the financing, Afferent acquired a license from Roche (OTCQX:RHHBY) for its P2X31 receptor program with the aim at developing first-in-class treatments for chronic pain. Proceeds from the financing will be used to accelerate the development of P2X3 receptor targeted pain therapies.
Ophthotech, a New York City-based biopharmaceutical company focused on developing novel ophthalmic therapies for both wet and dry age-related macular degeneration, closed a $30 million Series B financing round led by Clarus Ventures. Existing investors SV Life Sciences, Novo A/S and HBM BioVentures also participated. Proceeds from the financing will be used to fund a phase 2 combination trial of Ophthotech's lead product candidate for treatment of wet AMD, E10030, and development activities for the company's other targeted therapies for wet and dry AMD. E10030, an aptamer targeting PDGF, has demonstrated potency when combined with anti-VEGF agents such as Lucentis.
Swiss biotech Molecular Partners secured $25 million in a Series B equity financing, which will be used to fund the development of DARPins as next generation protein therapeutics. The round was led by new investor Essex Woodlands Health Ventures. All existing investors also participated in the round, including Index Ventures, Johnson & Johnson Development, BB Biotech Ventures and Endeavour.
The new funds will enable Molecular Partners to advance its lead compound MP0112, a best-in-class VEGF antagonist, into clinical proof of concept studies in two indications in ophthalmology. It will also support the development of the company’s broad proprietary pipeline of preclinical DARPin candidates. As novel biologics, DARPins combine the advantages of monoclonal antibodies with many of the properties of small molecules. Molecular Partners is collaborating with Centocor Research & Development in the development of DARPins for two undisclosed targets.
Regado Biosciences, a New Jersey biotech developing antithrombotic therapeutic aptamers with active control agents, completed a $40 million Series D financing. The round was led by new investor Edmond de Rothschild Investment Partners, with participation by existing investors Domain Associates, Quaker Bioventures, Aurora Funds, Caxton Advantage Life Sciences Fund and other individual investors.
Regado Biosciences’ technology involves the creation and development of two-component drug systems. Each system comprises a nuclease-stabilized RNA aptamer that can be controlled directly by its specific and complementary oligonucleotide active control agent. This technology is being applied to injectable antithrombotics, including anticoagulants and antiplatelet agents, a multi-billion dollar market in need of therapeutics with improved safety profiles and a greater degree of therapeutic control.
On the M&A front, Lexington, Massachusetts-based Cubist Pharmaceuticals (CBST) acquired privately-held Calixa Therapeutics in a milestone based deal that could be worth as much as $402.5 million. The centerpiece of the deal is Calixa’s lead compound CXA-201, a novel antibiotic currently in mid-stage trials as a treatment for multi-drug resistant Gram-negative pathogens. Cubist would obtain Calixa’s rights to develop and commercialize CXA-201, and other products that incorporate CXA-101, which Calixa acquired from Astellas Pharma. Calixa has such rights in all territories of the world except select Asia-Pacific territories.
Under the terms of the agreement, Cubist will pay Calixa’s shareholders $92.5 million in cash for the company and the San Diego-based company will become a wholly-owned subsidiary. Cubist also would be required to make potential payments to Calixa’s current stockholders of up to $310 million upon achieving certain development, regulatory, and commercial milestones related to products which incorporate CXA-101. Cubist would also be expected to begin clinical studies of CXA-201 for the nosocomial pneumonia indication in the second half of 2010. Assuming successful development, Cubist would expect to file a New Drug Application for CXA-201 in the second half of 2013.
Myriad Pharmaceuticals (NASDAQ:MYRX) entered into a definitive agreement to acquire Javelin Pharmaceuticals (JAV) for up to $96 million in a share exchange where Javelin shareholders will end up owning anywhere from 41 percent to 45 percent of the combined company based on the timing of FDA approval of Javelin’s lead candidate Dyloject, an injectable formulation of diclofenac, an NSAID for the multimodal management of moderate-to-severe postoperative pain. An application to begin marketing the drug was submitted by Javelin on December 2. Concurrent with the signing of the definitive agreement, the companies have entered into a loan and security agreement whereby Myriad will provide up to $6 million of interim financing to fund Javelin's operating activities prior to closing, which is expected to occur during the first quarter of 2010.
Millennium, the Oncology subsidiary of Japan’s Takeda Pharmaceuticals (OTCPK:TKPHF), entered into an agreement with Seattle Genetics (NASDAQ:SGEN) to globally develop and commercialize the Bothell, Washington-based company’s SGN-35, an antibody-drug conjugate targeting CD30 that is in late-stage clinical trials for the treatment of relapsed and refractory Hodgkin lymphoma and systemic anaplastic large cell lymphoma. Under the terms of the collaboration, potentially worth $365 million to Seattle Genetics, the company will receive an upfront payment of $60 million, be eligible for development milestones and royalties, and will retain full commercialization rights for SGN-35 in the United States and Canada.
Finally, Aveo Pharmaceuticals added its name to a growing list of companies planning an initial public offering in the coming months. The Cambridge, Massachusetts-cancer therapeutics developer said the number of shares to be offered and the price range for the offering have not yet been determined. J.P. Morgan Securities and Morgan Stanley will be the joint book-running managers of the proposed offering while Leerink Swann will be the lead co-manager and Canaccord Adams will be a co-manager.
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