Mega licensing deals for biotech firms
biotech firms with novel drugs, but also the lengths large
biopharma companies will now go to secure exclusive rights to
promising candidates, even if they are in the early stages of
The lucrative rewards available to companies with promising drug candidates in the pipeline were brought into sharp focus yesterday, after two licensing deals were announced, each valued in excess of $500 million, for compounds in early-stage (Phase I and IIa) development.
The scale of the deals also lends credence to claims of an R&D productivity crisis among the big biopharmaceutical companies and to those who argue that the firms should focus their efforts on in-licensing strategies. With signs of a return in venture capital financing in the air, it suggests that things are finally looking up for biotechnology firms.
In the first deal, Sweden's Biovitrum has licensed rights for its small-molecule 11b-HSD1 enzyme inhibitors for the treatment of metabolic diseases, including type 2 diabetes, as well as certain other indications, to the USA's Amgen. The most advanced compound included in the agreement is BVT.3498, currently in Phase IIa clinical trials.
Amgen will make an upfront payment and will fund and conduct all further development and commercialisation activities in North and South America, the European Union, Australia and New Zealand. It will also make significant periodic milestone payments to Biovitrum related to development progress, regulatory submissions and approvals.
Once a product has been approved, Biovitrum will also receive tiered royalties on future sales of all products arising from the agreement. In addition, Amgen will fund a three-year research programme conducted by Biovitrum to develop additional 11b-HSD1 enzyme inhibitor compounds.
As part of the agreement, Amgen has also granted Biovitrum co-promotion rights in the EU for its rheumatoid arthritis drug Kineret (anakinra), and the Swedish firm will also have co-promotion rights in the Nordic region for all products developed under the agreement, as well as for Amgen's cinacalcet hydrochloride, a treatment for some hyperparathyroid conditions just filed for approval in the US, and palifermin, a therapy for treating chemotherapy-related inflammations of the mouth. In addition, Biovitrum will perform biopharmaceutical process development work funded and directed by Amgen over the next three years.
Biovitrum said that the deal includes guaranteed funding of $177 million, including an upfront payment of $86.5 million. In addition, it can receive a total of $435 million for the first two indications using the inhibitors, putting the deal's potential value at $612 million.
11b-HSDs (11 beta hydroxysteroid dehydrogenases) are enzymes that play an important role in the conversion of glucocorticoids between the active and inactive forms. Two enzymes have been identified, 11b-HSD1, and 11b-HSD2. These 11b-HSDs play a major role in the modulation of local cortisol levels and the access of active steroid to its receptors in target tissues. The enzymes are believed to have important roles in a number of common diseases, including obesity, type 2 diabetes and hypertension.
In the second agreement, Franco-German drug group Aventis has acquired joint development rights to Regeneron's VEGF (vascular endothelial growth factor) Trap programme in a deal valued at more than $510 million, including an $80 million upfront licensing fee and the purchase of $45 million in newly-issued Regeneron stock.
In addition, Regeneron is entitled to up to $25 million in clinical development milestones and an additional $360 million if the product receives European and US regulatory approval in eight indications. The companies will share equally promotion costs and future profits, while Aventis will be responsible for providing commercial scale manufacturing.
Unusually, Regeneron agreed to reimburse Aventis for 50 per cent of its development expenses if the collaboration generates a profit. Regeneron's anti-VEGF Trap programme is currently in Phase I studies for patients with solid-tumours or non-Hodgkin's lymphoma, and Aventis also has rights to ophthalmic applications of the drug.
The VEGF Trap is a fusion protein that contains portions of the extracellular domains of two different VEGF receptors that occur naturally on blood vessels. By combining key portions of the receptors that bind VEGF, the drug blocks VEGF activity and prevents the formation of the new blood vessels needed to sustain growth in cancerous tumours.