Deals Of The Week: Isis Rethinks Its Partnering Strategy

 

In its last few earnings calls Isis Pharmaceuticals Inc. has touched on a significant change in its partnering strategy. We spoke with CEO Stan Crooke recently to better understand the implications of these changes for Isis’s top line and operating expenses, and also how they might allow the antisense specialist to enter into more strategic relationships with a few well-chosen partners. 

Isis has been on a deal tear. It out-licensed 5 candidates in 2012, striking three of those deals with Biogen Idec Inc., according to Elsevier’s Strategic Transactions Database. Since 2008, it has collected over half a billion dollars in upfront cash, and hundreds of millions more in milestone payments, not to mention $175 million on the sale of its satellite subsidiary Ibis Biosciences Inc. to Abbott Laboratories Inc.

The new approach was enabled by the size and renewability of Isis’s pipeline – some 28 antisense compounds in clinical development, and about seven in preclinical – and also by recent improvements in antisense technology that have raised the value and attractiveness of Isis’s assets and allowed it to pursue targets in a broad array of diseases including larger population diseases.

Isis puts its candidates into three buckets. The first bucket includes drugs in indications where there’s high target risk and costly and inconclusive Phase II studies.  Its goal is to partner these assets early, sometimes during preclinical development, in option deals where Isis controls development through Phase I or II. Recent agreements in neurology with Biogen (spinal muscular atrophy) and Roche (Huntington’s disease), and in cancer with AstraZeneca PLC (various tumors), conform to this model.

The second bucket is for drugs in indications where Phase II studies are dispositive and predictive of Phase III success, but where Phase III programs are very expensive and complex – for instance, due to a requirement for cardio outcome studies. These indications, typically metabolic disorders or certain cardiovascular diseases, have large patient populations and require a significant commercial effort. Isis’s unpartnered candidates against targets involved in insulin resistance, lipid control, fat metabolism, clotting disorders and coronary artery disease fall in this bucket. “Because we’ve kept them longer, through Phase II proof-of-concept, the terms are more lucrative,” said Crooke.

The third bucket signals the greatest change in Isis’s partnering strategy. From the firm’s founding in 1989, it has focused primarily on partnerships in which it had limited financial flexibility and where its partner controlled development. Beginning around 2010, Isis began to strike deals where it retained developmental control through early and mid stages, and generally took a bigger payment, both upfront and in milestones and royalties.

This third group comprises drugs in indications with clear Phase II and Phase III clinical paths, low-to-moderate total development costs, and the potential for initial rare disease opportunities, with larger-population indications downstream. Crooke said Isis is looking for “a Phase III program that we think we can manage without growing the organization enormously.” In fact, Crooke said Isis may hold onto candidates in the third bucket partway or all the way through Phase III.

The company might even control some drugs through filing, though he conceded that the timing would get tricky. The art is to partner early enough so that the licensee can prepare for launch, but late enough to maximize the value of the asset. Deals over Phase III assets might include a one-year option, though Crooke said he and his team are still evaluating different deal structures.

The first experiment in Phase III out-licensing will be ISIS-APOCIIIRx for patients with high triglycerides; its Phase III trial is slated to begin next year. The Kynamro (mipomersen) deal with Genzyme Corp., in which Isis took $325 million in upfront cash and equity for an asset it had funded through Phase II, may have woken it to the commercial opportunity of holding drugs longer, particularly ones that play out in multiple indications. But where mipomersen’s Phase II trial had to be funded via a private placement and an innovative financing with Symphony Capital, Isis is no longer cash-constrained and will have no trouble managing the late-stage development program for APOCIIIRx and other appropriate candidates. Similar deal terms and a big pharma partner are likely if Isis is successful in licensing APOCIIIRx.

The new deal strategy calls for Isis to crank out three to five drugs per year. At that rate, said Crooke, it will need to grow the organization a bit. And R&D spending, which has until now been relatively stable, will begin to rise as it moves drugs forward faster and retains some into Phase III.

But the river of cash that will be generated by Isis’s numerous existing deals – upfronts, milestones, licensing fees, royalties – should easily cover the costs. Its cash hoard, announced at its August 6 second quarter earnings call, is $590 million. The money will also make possible the next iteration of Isis’s partnering strategy. “What we look forward to in the future,” said Crooke, “is a few strategic partners where we’ll have a partner in a specific space who really knows us and the technology. And we know the partner and what we’re getting.”

Clear sailing, then, as long as the deals keep coming in. However, 2013 has seen a pause in the torrid pace of Isis’s deals. So far into the year, it has struck only the Roche agreement in April.

Still, all that cash set to pour in, and all those changes in the way it does business development, could nudge Isis to rethink its platform business model.  We’ll be examining that possibility in an upcoming issue of IN VIVO. - Mike Goodman

Until then, here’s what the rest of the biopharma world has been up to, deal wise . . . 

Novartis/Ensemble Therapeutics: Building on its research into the inflammatory cytokine interleukin-17, Novartis AG has partnered with Ensemble Therapeutics Corp. to develop an oral small molecule targeting the pathway. The big pharma is one of the leaders in this field of research and has a biologic drug that blocks IL-17, secukinumab, poised for a near-term regulatory filing for the treatment of psoriasis. Several competitors are also looking to bring similar drugs to market, and an oral alternative would represent a compelling commercial opportunity. The terms of the discovery-stage deal, announced Aug. 5, were not disclosed, though it will include an upfront payment, milestones and research funding payable to Ensemble.  For the private drug discovery company, the deal involves its latest-stage asset.  Much of the value of its macrocycle discovery platform, from which it has built a library of more than five million synthetic macrocylic compounds called Ensemblins, is at an early stage. The orally available compounds permeate cells like small molecules do, but like biologics, also bind to protein targets. The company has partnered with several other pharmas including Pfizer Inc., Bristol-Myers Squibb Co., Genentech Inc., Boehringer Ingelheim GMBH and, most recently, Alexion Pharmaceuticals Inc.- Jess Merrill

Bayer/Compugen: Israeli drug developer Compugen Ltd.  landed a drug development deal with Germany’s Bayer AG for two potential cancer treatments whereby the Tel Aviv-based biotech will get an upfront payment of $10 million and could get more than $500 million in milestone payments, not including milestone payments of up to $30 million for preclinical activities, plus royalties on resulting drug sales. Compugen, which has a pipeline of preclinical protein therapeutics and monoclonal antibodies, uses predictive discovery technologies to discover antibody therapies that use the body's natural immune defenses to fight tumors. The NASDAQ-listed biotech’s computational platform uses algorithms to predict which surface membrane proteins could be used as antibody drug targets; these are later validated in the laboratory. The collaboration, announced Aug 7, will focus on two novel immune checkpoint regulators that may play a role in immunosuppression.  Its scientists are developing specific therapeutic antibodies geared to block the immunosuppressive function of these targets and to reactivate the patient's anti-tumor immune response. It’s an area that is drawing increasing attention from drug makers. Compugen depends to a large degree on partnerships to progress its R&D program. Under its latest arrangement, Bayer will get control over further development and global commercialization rights to any new antibody-based cancer immunotherapies the collaboration generates. - Sten Stovall

Oncobiologics/InVentiv Health: N.J.-based Oncobiologics Inc. has entered into a risk-sharing agreement with contract research organization inVentiv Health Inc. in an effort to move its biosimilars pipeline forward. Oncobiologics is a small privately-held company, founded in 2011, that has relied on government grants, partnering opportunities, and angel investors for funds. It currently has no drugs in the clinic, but has several preclinical biosimilars and three innovative molecules still in discovery. The two companies will collaborate to develop five biosimilars, beginning with a generic version of AbbVie Inc.’s blockbuster rheumatoid arthritis drug Humira (adalimumab). The collaboration will involve biosimilar versions of four oncology drugs, including Roche/Genentech Inc.’s Rituxan (rituximab), Bristol-Myers Squibb Co./Eli Lilly & Co.’s Erbitux (cetuximab), Roche/Genentech’s Herceptin (trastuzumab), and Roche/Genentech’s Avastin (bevacizumab). inVentiv will share the cost of Phase III development. Oncobiologics was founded by individuals with business, R&D, and process engineering experience in the biologics divisions of major pharma companies. The firm intends to find commercialization partners in the U.S., Europe, and emerging markets, and has struck several deals to that end, but will work with inVentiv to commercialize the products in any territories without partnership agreements. inVentiv’s share of the profits will be dependent on its involvement in those unpartnered territories. Financial details of the transaction were not disclosed.- Lisa Lamotta

Amgen/Array: In this week’s “No Deal,” Amgen Inc. will return glucokinase activator AMG 151 to original owner Array BioPharma Inc., ending a December 2009 collaboration in which the companies jointly studied type 2 diabetes drugs. The tie-up officially unravels October 5, when rights to AMG 151 will revert to Array. Boulder, Colo.-based Array revealed the deal’s termination along with second-quarter earnings on August 7. The Phase II candidate, originally and henceforth known as ARRY-403, was the centerpiece of a deal that netted Array $60 million up-front. Array also received an $8.5 million milestone payment during the life of the deal, which included an additional $658 million in unrealized payments. The collaboration included a two-year research agreement that ended in 2011. The deal was forged when ARRY-403 was still in Phase I. Since then, some doubts have arisen that glucokinase activators can produce sustained glycemic improvement, while further risks of hypoglycemia and increased blood pressure have cast doubt on the drug class’s future in diabetes. Moreover, both companies have replaced their CEOs in the intervening years, and Amgen research and development head Roger Perlmutter has moved on to Merck & Co. Inc. The companies recently completed a Phase IIa study of the drug, and plan to share its results with the scientific community, according to an Array statement. - Paul Bonanos

Deals of the Week: Ante Up For Antisense, Pharma Places Another Isis Bet

Isis Pharmaceuticals has been on a roll of late. The antisense platform play is busy highlighting its incredibly deep line-up of candidates and partners, now that it secured an FDA approval for Kynamro (mipomersen) to treat homozygous familial hypercholesterolemia (HoFH). And investors seem to like what they see; Isis shares are up 84% this year and may be poised to exceed an all-time high price set in 2001. But any long-term success the company hopes to enjoy depends on eventually ramping up commercial revenue.

The biotech has 28 clinical and preclinical candidates; nine of which will have Phase III or “important” Phase II data by early 2014. To develop this embarrassment of pipeline riches, Isis has a large roster of partners. This week it added a new one, Roche, bringing the number of major biopharma partners to seven. The others are AstraZeneca, Biogen Idec, Bristol-Myers Squibb, Eli Lilly, Sanofi’s Genzyme and GlaxoSmithKline.

Isis has raised about $2 billion through partnerships, much more than its $834 million in net proceeds from equity sales or $784 million borrowed in long-term debt deals. The biotech expects to finish this year with $325 million in cash. Last year, Isis did four major biopharma deals, three with Biogen Idec and one with AstraZeneca.

From those four deals alone, in 2012 Isis received $96 million in up-front payments with the potential to earn more than $2 billion in milestone payments and licensing fees. At year-end, all told, Isis had the potential to earn as much as $5.1 billion in future milestone payments.

Its latest option deal with Roche is for Huntington’s disease treatments; it brings to the table Isis’ antisense oligonucleotide technology (ASO), as well as Roche’s brain shuttle technology, a method to deliver oligos into the central nervous system. The initial research will focus on blocking all forms of huntingtin (HTT) protein. In addition, the partners will also work to block production of disease-causing forms of HTT protein and to treat asymptomatic patients.

Roche will pay Isis $30 million upfront, as well as tiered double-digit royalties on any products that result. Isis is eligible for $252 million in development milestones, including a large payment at the end of Phase I. Roche will also pay $80 million in commercial milestones. Isis will be responsible for discovery and development through Phase I, at which time Roche has an option to license all compounds that result from the collaboration and take over global development and commercialization. Products under the collaboration are expected to be IND-ready by the end of 2014.

“Isis now has a stronger balance sheet where it can be much more selective in choosing partners, and can choose when to partner,” noted Dallas Webb of BB Biotech, a major Isis investor that held 7.9% of its shares at Dec. 31. “Additionally, the company has a clear focus on rare diseases, where its technology can be used to target previously un-addressable disease mechanisms.”

Isis plans to put about three to five candidates into the clinic annually. It’s defined five major research areas as its primary territory: cardiovascular disease, severe and rare diseases, metabolic diseases, cancer and inflammation.

While early stage research partnerships continue to pay the bills, to make it on its own Isis needs to start banking some serious product revenue. Wall Street isn’t particularly optimistic that will materialize in the near-term. The consensus estimate for 2013 Isis revenues is just $110 million, with $116 million expected for 2014. Even without Kynamro, in 2012 Isis had $102 million in revenues and a $68.9 million operating loss. Still, Isis says it has five products it could bring to market within the next five years.

These include ISIS-TTR to treat transthyretin (TTR) amyloidosis, a severe and rare genetic disease in which the patient produces a misfolded form of TTR that progressively accumulates in tissues, and ISIS-SMN to treat spinal muscular atrophy (SMA), a severe motor-neuron disease that is a leading genetic cause of infant mortality. The former is partnered with GSK and is in a Phase III trial, while Biogen Idec has an option to the latter, which is slated to start a Phase II/III trial in infants before year-end with another Phase II/III trial in children scheduled for the first quarter of 2014.

Isis also has two ongoing Phase II trials for ISIS-APOCIII, to treat severe hypertriglyceridemia. The unpartnered candidate will have data from one trial in the next few months and the other by year end. A Phase III trial is expected to start late this year or early next year.

Webb said investors are currently focused on SMN and will follow the asset closely in the next 12-18 months. He noted the upcoming APOCIII data and he expects TTR will move more into the spotlight in the next year or so. “These compounds on top of the Kynamro approval should lead to an increased focus on the pipeline, where we believe a lot of value remains to be unlocked,” he said.

In addition, Isis is hoping to bulk up its Kynamro label. Isis and partner Genzyme have an ongoing Phase III/IV trial in severe heterozygous familial hypercholesterolemia (HeFH) patients with data due late next year. Not only is the patient population much larger for HeFH, but the subcutaneous drug is dosed 3x weekly rather than the 1x a week with HoFH patients. However, Webb sees the true value of Kynamro as the validation of Isis’ technology and an establishment of FDA’s willingness to approve an antisense compound.

Other Isis investors as of Dec. 31, 2012 include top-flight mutual fund groups Fidelity Management (14.9% of shares outstanding) and T. Rowe Price (2.2%), as well as hedge fund BlackRock (3%). In the fourth quarter, only two of its top 10 holders trimmed positions and each only by single-digit percentages. But another seven added to positions, four of them by double- or triple-digits. Fidelity held pat in the fourth quarter as the largest Isis holder.

Isis/Roche wasn't the only deal of the week, of course. In fact, it wasn't even the only antisense deal. Keep reading for the rest of the week's deal-making highlights in this week's edition of  . . .

Sarepta/University of Western Australia: Another company developing new antisense drugs deepened its commitment to commercializing academic research in this area on April 11, when Sarepta Therapeutics. agreed to license a portfolio of patented technologies addressing Duchenne muscular dystrophy from the University of Western Australia. For $7.1 million in up-front and milestone payments, as well as a low single-digit royalty on sales of any approved products that come from the collaboration, Sarepta will receive intellectual property concerning exon-skipping technology, which is used to excise a key piece of dystrophin RNA during the transcription process, resulting in functional dystrophin that gives strength to muscle fibers. The Cambridge, Mass.-based company already uses the technique in its lead candidate eteplirsen, a Phase II drug for DMD, which repairs exon 51; Sarepta obtained the exon-skipping technology for that drug from Perth-based UWA under a 2008 agreement. The company also has three other preclinical drugs that address exons 45, 50 and 53. Sarepta says that by combining the newly obtained patents with its own phosphorodiamidate morpholino oligomer technology, it can create exon-skipping drugs capable of treating the majority of DMD patients worldwide. One in 3,500 boys is born with the muscle-wasting disorder, which usually leads to death by age 30. -- Paul Bonanos

GlaxoSmithKline/A*STAR: GlaxoSmithKline and Singapore’s Institute of Chemical and Engineering Sciences Agency for Science, Technology and Research are working together to develop new formulations of existing medicines specifically for emerging markets. The collaboration, which the organizations announced on April 9, will continue for five years and focus on development of “evidence-based formulations,” or EBFs, of GSK’s off-patent drugs, in order to improve patient outcomes in emerging markets. ICES is part of Singapore’s A*STAR network, which is charged with helping to grow Singapore’s economy by building and maintaining a world-class scientific research infrastructure. A*STAR oversees 14 biomedical, physical and engineering sciences institutes and six consortia in Singapore. ICES and GSK have been working together since 2003, and GSK also works with other divisions of A*STAR. ICES is contributing expertise in synthesis, formulation and process development, while GSK will provide drug candidates, and optimization and product development skills. Through the alliance, ICES will be able to enhance its knowledge of drug formulation, analytical capabilities, and scale up and will develop a pool of local expertise in specialized formulations.  The aim, from GSK’s perspective is to bring affordable medicine to more people. Terms were not disclosed, but the deal enhances Singapore’s position as a regional hub for drug development. Singapore is the regional headquarters for a number of multinational pharma companies, including GSK, Abbott Laboratories (now AbbVie), Roche, Merck & Co., Bayer, Pfizer, and Novartis. -- Wendy Diller

Resverlogix/RVX Therapeutics: Unlike Isis, which is embracing its platform, Resverlogix  is spinning out its platform into a separate private company, temporarily named RVX Therapeutics. The publicly listed Canadian biotech said it wants to make the move in anticipation of its own potential takeout following June Phase IIb data for lead candidate RVX-208, a BET bromodomains inhibitor. RVX-208 is designed to treat atherosclerosis by increasing serum levels of apolipoprotein A-1, a building block that makes up 70 percent of HDL cholesterol. RVX-208 is also in Phase II testing to treat diabetes and will soon be in a Phase II trial for Alzheimer’s disease. In the spin-out, RVX Therapeutics will get the epigenetics platform, excluding any ApoA-1 and RVX-208 technology. The platform is based on targeting BET (Bromodomain and ExtraTerminal Domain) proteins. Resverlogix compounds bind to BET bromodomains and prevent them from engaging proteins associated with DNA called histones. The newco would either be supported by a royalty from a potential Resverlogix acquirer or it would perhaps IPO. The spinout is subject to a shareholder vote, which will likely be at the end of May. Shareholders would receive one share in the new company for each Resverlogix share they hold at a date of record in late April. Investors haven’t exactly embraced the deal, sending shares down about 12% since the April 8 announcement. -- Stacy Lawrence

Aeterna Zentaris/Ergomed Clinical Research: The Canadian biotech and the European contract research organization partnered to conduct a Phase III trial for AEZS-108 in endometrial cancer. Structured to share risk with Ergomed Clinical Research, the deal calls for the CRO to assume 30%, or up to $10 million, of the clinical and regulatory costs associated with the trial that are estimated to total about $30 million. In return, Ergomed stands to receive a single-digit percentage of any net income to Aeterna Zentaris for AEZS-108 in this indication, up to a pre-specified maximum amount. The trial for the doxorubicin peptide conjugate will be of 500 patients and have a primary endpoint of overall survival.
Aeterna Zentaris had a major disappointment in March, when an independent Data Safety Monitoring Board recommended the discontinuation of a Phase III trial for perifosine to treat multiple myeloma since it was deemed highly unlikely the study would achieve a significant difference on progression-free survival, the study’s primary endpoint. Aeterna Zentaris shares are down 22% this year, giving it a market cap below $50 million. -- S.L.

GlaxoSmithKline/Academic Institutions: GlaxoSmithKline will dedicate $1 million in prize money and research funding of an undisclosed amount for up to 40 researchers across 20 academic and other nonprofit institutions to answer early questions about the possibility of using extremely focused electrical impulses to modulate the neural signals that control vital organs. With so-called “electroceuticals,” the aim is to do with electrical information what drug makers currently try to do with biologics and small molecules: control blood pressure, cytokine production, glucose function, or any number of biological functions that lead to disease when out of whack. “Correcting disorders with treatment in their own electrical language” is how Kristoffer Famm, the vice president in charge of GSK’s new bioelectronics group, and his co-authors describe their goal in the latest issue of Nature. Before treatments come to light, there are years of work ahead in mapping the neural activity associated with various diseases. Famm says the funding, to be parceled out to two researchers per lab, is aimed at jump-starting the mapping projects or building upon works in progress.
The field is gaining momentum with the new U.S. brain-mapping initiative and a Stanford University breakthrough that creates see-through brains that allow researchers to highlight and study networks of neurons as they fire. At the end of 2013, GSK expects to convene a meeting where researchers will zero in on a key hurdle the field needs to overcome; GSK will then put up $1 million as a prize to the group that solves the problem. -- Alex Lash

Photo Credit: Ramberto Cumagun

Deals Of The Week Sings Of An Icelandic Saga And The Path Forward

Our knee-jerk reaction to Monday’s announcement that Amgen is buying deCODE Genetics for $415 million in cash was “Say what?” It’s hard to get past the unlikely mix of cultures between Amgen, the most button-down of biotechs, and deCODE, whose irascible founder and CEO, Kari Stefansson, is anything but.

On second thought, though, the combination makes sense.  For Amgen, it’s a buy-versus-build way to install a broad-based, genetics-oriented discovery and target validation engine.  For deCODE’s investors Polaris Ventures and ARCH Venture Partners, it’s a timely and profitable exit: they put down roughly $14 million to bring the Icelandic genomics specialist out of bankruptcy in November 2009 and have been carrying it since.  And for deCODE’s scientists, it’s an opportunity to continue discovery research using population genetics and armed with blood samples from Icelanders and the country’s conserved genealogical and health care records.

As Polaris’ Terry McGuire blogged the day the deal broke: “Almost all of the other companies that started in this space gave up and moved to safer ground – developing drugs.  Kari Stefansson never lost sight of what was truly important, which is pioneering the genome.”

Equally true is that Stefansson’s broad vision caused his reach to exceed his grasp. As we wrote three years ago, the fundamental issue was one of business strategy – an overly optimistic view of the rate at which discoveries made with its genomics platform could convert into tangible drug and diagnostic assets, including IP, and justify the infrastructure investments the company had made.

deCODE's troubles stemmed from a combination of factors including a fragmented set of operations ranging across gene-based drug and diagnostics discovery and development as well as a foray into consumer genomics. As an Iceland-based company, it also had been especially sensitive to the impact of the global financial downturn in the latter half of the 2000s, which hit that country's banking industry very hard. Plus, an arrangement with Lehman Brothers to manage its money had left deCODE with essentially worthless paper.

Stefansson’s unwavering faith in deCODE’s expansive – and expensive – approach to discovery finally has paid off. “This was a 16-year saga,” says McGuire. "But true to the saga, Kari’s has been one of finding the path forward.” Polaris and ARCH together (via the aptly named Saga Investments, organized for the deCODE recapitalization) owned about 65%, roughly one-third each, of deCODE.  They’d put in around $50 million all told (plus some noncash obligations to turn the firm around), netting what appears to be more than a 5x return.

The business model for the recapitalized deCODE focused on establishing corporate partnerships, which is where Amgen came in.  The companies were discussing ideas for partnerships when, as sometimes happens, “there was a moment where they could see the breadth of this engine,” says McGuire.  Some of deCODE’s insights will directly relate to Amgen’s therapeutic areas of interest, he says, but as important will be deCODE’s long-term contribution to R&D.

Becoming part of Amgen presumably puts an end to deCODE’s aspirations as a developer of clinical diagnostics, an area very much in its sights when the firm relaunched.  In that respect, the deal speaks to the relative value of genomics in drug discovery versus clinical diagnostics development. – Mark Ratner

Teva/Xenon – In an effort to streamline its business, Teva Pharmaceuticals has decided to take a more focused approach to R&D, with an emphasis on respiratory diseases and central nervous system disorders (including pain and neurodegenerative disorders). A deal announced with Xenon Pharmaceuticals on Dec. 11 will fit snugly into the Israeli company’s new strategy. In exchange for the global rights to Xenon’s pain drug XEN 402, Teva will pay the Vancouver-based company $41 million upfront, as well as development, regulatory and sales milestones of up to $335 million. Xenon also will be entitled to royalty payments and have the chance to participate in U.S. commercialization, although details of the commercialization split were not disclosed. XEN 402, a Nav1.7 inhibitor, blocks sodium channels that are found in abundance at nerve endings and contribute to chronic pain conditions. Xenon has taken it through the start of Phase II for both inflammatory and neuropathic pain and in topical and oral formulations. Teva, which now has rights to both versions of the drug, plans to begin a full Phase IIb development program immediately. Xenon hasn’t been the only company working on Nav 1.7 inhibitors – a space that has drawn interest because its potential to be an alternative to opioid-based pain drugs. – Lisa Lamotta

Biogen Idec/Isis – Biogen Idec continues to demonstrate faith in antisense technology, announcing a third deal with Isis Pharmaceuticals Dec. 10. Much like the two previous deals between the companies, the recent tie-up focuses on neuromuscular targets. In exchange for access to three early-stage targets, Biogen will pay Isis $30 million upfront. The work is currently in the discovery phase. Once Phase II has begun, Biogen will have the right to option each of the three programs and continue development and commercialization activities. Isis is eligible to receive $200 million in total milestones per program, as well as double-digit royalties should any products be commercialized. In January, Biogen signed its first deal with Isis, agreeing to pay $29 million upfront as well as $45 million in potential milestones for the option to license Isis' Phase I spinal muscular atrophy compound. In late June, Biogen agreed to pay $12 million upfront for the right to a treatment for myotonic dystrophy type (DM1). Early-stage milestone payments could total $59 million. At the end of Phase II, Biogen has the option to license the drug; subsequent payments for meeting certain regulatory milestones could add up to $200 million. – L.L.

AstraZeneca/Isis – Antisense drug-discovery company Isis Pharmaceuticals also landed a second partnership on Dec. 11, an oncology deal with AstraZeneca that will address five targets including one program upon which clinical trials are already underway. For $25 million upfront, plus a $6 million near-term payment due in the second quarter of 2013 if research is ongoing, AstraZeneca gets rights to the Phase I/II clinical compound ISIS-STAT3Rx, as well as one preclinical program and options on other programs. AstraZeneca will fund ongoing research on the programs covered under the partnership, save for a small Phase II trial Isis is still conducting on ISIS-STAT3Rx for lymphoma. Isis also is eligible for $75 million in milestone payments over the next two years, including a $50 million payment if the ongoing study is completed; Isis would receive additional clinical and approval-related milestone payments, licensing fees and royalties on marketed drugs, but the companies didn’t provide further financial information. The partnership covers drugs that use Isis’ proprietary antisense technology, which destroys RNA that creates disease-causing proteins, as well as its Generation 2.5 technology that strengthens the potency of drugs. – Paul Bonanos

Bristol-Myers Squibb/The Medicines Company – In an example of a big pharma out-licensing deal, The Medicines Company has agreed to pay $115 million upfront to Bristol-Myers Squibb for the global rights to Bristol’s already-marketed topical recombinant thrombin product, Recothrom, which is used to stop non-arterial bleeding during surgical procedures. Approved in the U.S. in January 2008, Recothrom brought in $65 million in revenues in 2011. The Medicines Company plans to drive growth by seeking  approval of the drug in other countries. Bristol, which will be responsible for manufacturing, will receive royalties on the product during the two-year collaboration period. After that time, The Medicines Company will have the option to acquire Recothrom. Bristol said its decision to outlicense the drug is part of its effort to streamline operations and improve efficiency. For The Medicines Company, the deal bolsters its offerings in the hospital settings. The company also announced the same day that it has agreed to pay $115 million to acquire Incline Therapeutics, the maker of a needleless, patient-controlled analgesia device used in the hospital setting. – L.L.

Gilead/YM Biosciences – Gilead furthered its diversification strategy with expansion into oncology with the acquisition of Canadian cancer company YM BioSciences, announced  Dec. 12. Gilead will buy YM for $2.95 per share in cash, or about $510 million, with the transaction expected to close in the first quarter. YM had cash and equivalents of $125.5 million as of Sept. 30. The acquisition will give Gilead its sixth clinical-stage oncology compound, a Janus kinase (JAK) inhibitor, CYT387, which has shown promise in treating myelofibrosis. Gilead plans to initiate a Phase III study in the setting in the second half of 2013. The deal represents a solid exit for YM, which gained CYT387 when it merged with Australia’s Cytopia Ltd. in 2010 in a stock transaction that valued Cytopia at around $11 million. YM released results of a 166-patient Phase I/II clinical trial of the drug, its lead product, at the American Society of Hematology meeting Dec. 9, showing that treatment with CYT387, improved transfusion independence rates and spleen response in patients with myelofibrosis. But CYT387 will have to compete with a JAK1/JAK2 inhibitor already on the market for myelofibrosis. Incyte’s Jakafi (ruxolitinib) was approved by FDA for myelofibrosis in November 2011, and was the first JAK inhibitor approved for any indication. CYT387’s second-in-class status could dampen investor enthusiasm for the acquisition, but the fact the drug has been shown to increase hemoglobin and reduce the need for blood transfusions means it could offer a competitive advantage as the preferred treatment for the roughly 30% of myelofibrosis patients who have anemia. – Jessica Merrill

Somaxon/Pernix – Somaxon’s search for strategic alternatives has come to an end, but not exactly a lucrative one. Specialty pharma Pernix will acquire the sleep disorder company for $25 million in stock. That’s a small fraction of the at least $224 million that’s been invested in Somaxon since its 2003 inception. On Dec. 10, the day before the deal announcement, Somaxon’s market cap was a mere $10.5 million. It was trading just above its cash of $8.2 million at Sept. 30. During the third quarter, Deerfield Management initiated a position of 4.5 million shares in the company; that’s almost two-thirds of its shares outstanding. Somaxon shareholders still have to sign off on the deal. It’s been a steady slide for Somaxon. In September 2011, Procter & Gamble, the U.S. marketing partner for Somaxon insomnia drug Silenor (doxepin), terminated an August 2010 deal due to insufficient sales to support marketing expenses. Then in January, Somaxon said it was looking at strategic alternatives after a disappointing Silenor launch. The selling point for Silenor was supposed to be its approval for sleep maintenance, staying asleep into the seventh and eighth hours of sleep. But it’s proven difficult to gain a foothold in an insomnia market awash with generics, particularly of Ambien (zolpidem). Somaxon reported net product sales of $7.8 million in the first nine months of 2012. For its part, Pernix is adding a product to its ranks of generic, branded and OTC products. Until recently, the company has focused on pediatrics. But last month, it bought Cypress Pharmaceuticals for $101 million in cash and stock, thereby diversifying its product offerings. – Stacy Lawrence

Nuron/Pfizer – In another deal that has a big pharma unloading a non-priority asset, Pfizer sold its Meningitec vaccine to Exton, Pa.-based specialty biologic and immunotherapy developer Nuron Biotech. The vaccine is aimed at preventing bacterial diseases such as meningitis, sepsis and pneumonia caused by Neisseria meningitides serogroup C. The product is currently registered in 23 countries, and Nuron plans to expand its availability to markets with unvaccinated and under-vaccinated populations, the company said. N.meningitidis is estimated to cause 500,000 cases of disease annually worldwide with a 10%-20% fatality rate. The company previously acquired the HibTiter Haemophilus influenza Type b conjugate vaccine from Pfizer in April 2011 and is looking to relaunch the product, marketed in the 1990s by Wyeth, in the U.S. following discussions with FDA. Nuron has several vaccines and biologics in development. Terms of the deal were not disclosed. – J.M.