Teva Strengthens Its Innovation Pipeline

Sep.19.11 | About: Teva Pharmaceutical (TEVA)

By Marie Daghlian

Teva Pharmaceuticals (NASDAQ:TEVA) made two significant strategic investments this week designed to shore up its branded products pipeline in specialty areas such as oncology and infectious disease. The Israeli generics powerhouse exercised an option to invest an additional $19 million in CureTech after positive mid-stage trial results of the Israeli startup’s cancer treatment. Teva is also investing $7.5 million in Cocrystal Discovery to support the development of an antiviral drug targeting the polymerase enzyme of the hepatitis C virus.

Teva’s investment in CureTech brings its ownership of the company to 75 percent. It follows CureTech reporting positive final results in a phase 2 trial of CT-011, the company’s anti-PD-1 monoclonal antibody for the treatment of diffuse large B-cell lymphoma. Teva holds an option to acquire the entire company.

Teva also said it would finance up to $50 million of CureTech’s research and development program. This includes initiation of a late-stage trial of CT-011 in lymphoma, an ongoing mid-stage trial in colorectal cancer, and the start of a mid-stage trial in metastatic melanoma in the near future. CureTech is also exploring additional indications.

“We believe CT-011 has great potential to help many currently unserved cancer patients,” says Aharon Schwartz, head of Teva's Innovative Ventures. “This investment is part of Teva’s strategy to expand our branded activities into specialty therapeutic areas, such as oncology.”

Teva Pharmaceutical also signed a collaboration option to license and share purchase agreements to invest in Cocrystal Discovery, a biotech focused on the discovery and development of novel antiviral therapeutics. Initially focused on the development of an antiviral for hepatitis C infection, the collaboration could expand Teva exercises its option to add the development of two additional antiviral or antibacterial compounds, for which it will receive up to approximately a 23 percent stake in Cocrystal.

Supported by Teva’s initial $7.5 million investment, Cocrystal Discovery will develop an antiviral drug targeting the polymerase enzyme of the hepatitis C virus. After this program is completed, Teva will have the option to make additional investments, based on certain milestones. It will also have the right to exclusively license the drug for further development and commercialization.

Cocrystal is headquartered in Bothell, Washington and has labs there and in Mountain View, California. The partnership with Teva will help accelerate development of its platform, which combines high resolution X-ray crystallography with advanced computational methods to develop antivirals that target viral replication enzymes. CoCrystal’s chief scientist is Nobel laureate Roger Kornberg, who is also a member of Teva’s board.

“This new partnership further illustrates Teva’s commitment to develop innovative therapies,” says Schwartz. “If successful, these novel technologies could revolutionize the drug discovery process for antivirals, an area of a high unmet need. We believe this innovative technology offers significant promise for pharmaceutical discovery in areas of strategic importance for Teva.”