Did Pfizer overpay in Icagen deal?

By Mike Nagle

- Last updated on GMT

Related tags Ion channel Clinical trial Pfizer

Pfizer has penned a discovery-stage deal with Icagen aimed at
finding potential pain alleviating drugs, but has forked out over
twice the industry average.

Just days after Pfizer revealed it was actively looking for more pain relieving drugs, the pharma giant has announced a collaboration with a small biotech to discover, develop and commercialise drugs that modulate three specific sodium ion channels.

"Given that there are three different ion channel targets in the collaboration, we believe that there is a possibility for at least three unique products to emerge from this joint effort," said Icagen's CEO, Dr P. Kay Wagoner.

Although the pharma giant will only pay $12m (€8.9m) upfront, $15m through an equity investment and $11m in research funding over the first two years of the alliance, it has also committed a staggering $359m in milestone payments per product, which means Pfizer could end up outlaying over $1.11bn.

According to figures from Recombinant Capital director, Michael McCully, that more than doubles the median size of an early-stage deal since 2003, which stands at $175.4m. Given the fact that Pfizer has had recent well-publicised pipeline failures , coupled with it being the world's largest pharma firm, you might expect them to be among the top industry movers and shakers in the alliance space.

But this isn't the case; in data recently unveiled at the drug Discovery and Development of innovative Therapeutics (DDT) conference, McCully revealed that the 'top licensing shops' between 2003 and 2006 were actually Merck & Co., Novartis, GlaxoSmithKline (GSK) and AstraZeneca (AZ) - in that order.

Although the specific ion channels involved in the Pfizer-Icagen collaboration remain a mystery, Icagen said they are important in the generation of electrical signals in nerve fibers that mediate the initiation, transmission and sensation of pain.

The research is still at the preclinical stage, although the biotech does claim its compounds have demonstrated efficacy in pain models.

As McCully pointed out at DDT, deals for compounds in Phase III dominated in 2002, Phase II in 2003, Phase I in 2004 and 2005 and 2006 were "years for preclinical and lead stage deals.

Discovery deals are coming back."

Dr Douglas Krafte, vice president of biology and pharmacology at Icagen, noted that the alliance is an "important step in realizing the potential" in its drug discovery platform.

This won't surprise McCully, who also said that increasingly, these early stage deals are being driven by pharma's renewed interest in platform technologies rather than products, such as RNA interference (RNAi).

As the cornerstone of this platform, Icagen cloned over 300 human ion channel genes and generated a "collection of cell lines comprising these genes in a variety of specific configurations which mimic native channels in the human body and which can be used in screening assays."

Icagen screens potential drug candidates (from a library containing over 200,000 small molecules) against ion channel targets in parallel with other screens using channels related to safety and selectivity.

The deal is similar in structure to that struck between GSK and Epix earlier this year - where around $300m in milestones were committed to four programmes (giving $1.2bn in total).

However, the crucial difference was that GSK will only opt in after proof-of-concept has already been established (in fact, Epix's lead drug candidate is currently in Phase II proof of concept studies), whereas Pfizer is funding the whole development process

The news sent Icagen's share price rocketing up by 69 per cent and coupled with the influx of cash, could serve to cleanse investors minds of recent unhappier memories of the firm.

In April of this year, the biotech terminated the Phase III trial of senicapoc, an investigational compound for the treatment of sickle cell disease.

This followed advice from an independent Data Monitoring Committee that the trial was unlikely to meet its primary endpoint.

This, in turn, led to McNeil Consumer & Specialty Pharmaceuticals, a division of Johnson & Johnson pulling out of its collaboration with Icagen for senicapoc in June.

Until clinical data is collected on the ion channel drugs Pfizer is now helping Icagen to discover, no one will know just how good or bad a deal this will turn out to be.

Until clinical data is collected on the ion channel drugs Pfizer is now helping Icagen to discover, no one will know just how good or bad a deal this will turn out to be.

Related topics Clinical trials & development

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