Cancer Drug Deals Reaching New Heights

by: Bioassociate Consulting

J&J's (NYSE:JNJ) $1.1 billion licensing deal with Genmab (OTC:GNMSY), which was announced late last week, is the most recent reminder of the immense demand for novel cancer therapies and the huge sums big pharma are willing to bet on what they presume to be winners in this field. This agreement follows other impressive cancer drug deals in 2012, including Amgen's (NASDAQ:AMGN) acquisition of Micromet in a deal valued at $1.16 billion, the Celgene (NASDAQ:CELG)-Avila Therapeutics $925 million M&A, and the two discovery pacts Forma Therapeutics landed with J&J and Boehringer Ingelheim for $700 million and $815 million respectively. The common denominators of the aforementioned deals is the development stage of the drugs in focus (between discovery and Phase II trials) and the very high deal values.

Specific examples aside, the bigger picture tells the same story: according to Deloitte Recap, during 1H2012 cancer kept its big lead among therapeutic areas for licensing deals, taking up one quarter of all deals, with the second highest average upfront payment. In addition, in their Dealmakers' Intentions survey, Campbell Alliance state that over 35% of respondents indicated that their company is likely to conduct an in-licensing deal for a pre-clinical or Phase I cancer program.

Therapies that target the rarer cancer types and ones that are directed at cancers that currently lack efficient treatments often enjoy easier regulatory processes. These range from orphan designation and fast track status, to accelerated approval, allowing earlier approval of drugs following mid-stage clinical trials, based on a surrogate endpoint (as recently seen with Onyx's (NASDAQ:ONXX) drug, Kyprolis). These regulatory "discounts" may allow faster and cheaper clinical development and consequently faster time to market for certain cancer treatments.

The bustling cancer therapy scene is expected to continue producing deals. Here, we list some companies that are currently developing interesting cancer therapies which can be targets for future licensing agreements:

Immunomedics (NASDAQ:IMMU) - Epratuzumab: the New Jersey-based company is focused on the development of monoclonal antibodies for treatment of cancer and autoimmune diseases. While Immunomedics has licensed Epratuzumab to UCB for all autoimmune disease indications, the antibody's cancer indications are up for grabs.

Epratuzumab is a humanized monoclonal antibody targeting CD22 receptors on B lymphocytes. It is currently being evaluated for the treatment of acute lymphoblastic leukemia (ALL) and non-Hodgkin lymphoma (NHL) in three Phase I/II studies.

Geron (NASDAQ:GERN) - Imetelstat: Following its consolidation in the oncology field, Geron is currently conducting four Phase II studies with Imetelstat, a first-in-class telomerase inhibitor targeted at solid tumors and hematological malignancies. One of Imetelstat's main advantages, which is derived from its mode of action, is that it could be suitable for treating a wide varaiety of tumors. Should results from the Phase II studies, expected during 2013, will prove efficacy this drug will become a strong candidate for a licensing deal.

Ablynx (OTC:ABLYF) - ALX-0141: Ablynx is developing a novel class of antibody-derived therapeutic proteins, based on single-domain antibody fragments, termed Nanobodies.

ALX-0141 is an anti-RANKL Nanobody for the treatment of patients suffering from bone metastasis - caused by migration of cancer cells to the bone, mainly in lung, breast, prostate, kidney and thyroid cancers. ALX-0141 completed a Phase I clinical study.

Ablynx other cancer-targeted nanobody had been licensed to Novartis (NYSE:NVS) during pre-clinical development.

In addition to the direct-acting anti-cancer agents listed above, another area of cancer therapy that may be attractive to potential licensees includes adjunct therapies directed at enhancing the efficacy of cancer treatments. An interesting representative for such drugs is Genzyme's Mozobil (Plerixafor) - a drug that is currently FDA approved for use in stem cell mobilization for autologous transplantation in hematologic malignancies. Genzyme is currently testing mobozyl, a CXCR4 inhibitor, as a "chemosensitizing" agent aimed at improving the effect of cytotoxic chemotherapy in relapsed acute myeloid leukemia (AML) patients. Treatments of this sort usually exhibit fewer development hazards, while allowing their developers to join forces with multiple cancer treatments.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

About this article:

Problem with this article? Please tell us. Disagree with this article? .