Deal Watch: Amgen Takes Center Stage With Trio Of Transactions

"The Pink Sheet" regularly provides coverage of deal-making in the biopharmaceutical industry. Below is a summary of most noteworthy transactions that occurred between Sept. 12 and Sept. 18.

Amgen/Xencor

Amgen Inc.'s Blincyto (blinatumomab) was the first FDA-approved bispecific antibody and now the biotechnology giant may spend nearly $1.75bn on bispecifics developed with Xencor Inc.'s XmAb platform for monoclonal antibodies that bind to two separate targets.

In a deal unveiled Sept. 16, Amgen will pay Xencor $45m up front and up to $1.7bn in clinical, regulatory and sales milestone fees plus royalties across six novel bispecific antibodies in the fields of cancer immunotherapy and inflammation. Monrovia, Calif.-based Xencor will prepare its "plug and play" platform for Amgen's use, while the big biotech will take over preclinical and clinical development of bispecific antibodies and commercialization worldwide.

Xencor has inked several deals with major pharmaceutical and big biotech companies that wanted to tap into the firm's XmAb monoclonal antibody discovery technology. The new Amgen transaction is Xencor's second for its bispecific XmAb platform following a discovery deal signed in December with Novo Nordisk AS that's worth up to $175m in upfront and milestone fees [See Deal].

Amgen will combine its target discovery and protein therapeutics expertise with Xencor's molecular engineering capabilities to advance five T-cell engagers and bispecific antibodies as well as Xencor's existing preclinical bispecific T-cell engager (BiTE) targeting CD38 and CD3 for the treatment of multiple myeloma.

There are no general limitations in its agreement with Amgen regarding what Xencor can pursue for its own internal pipeline. Some of the programs under the partners' collaboration are combinations of targets that can be used in cancer, particularly looking at T-cells, while other undisclosed targets are applicable in inflammatory diseases.

Xencor will earn mid to high single-digit royalties on therapies against Amgen's five targets as well as high single- and low double-digit royalties on sales of Xencor's molecule.

The bispecific antibody agreement between Xencor and Amgen is not the first deal between the two companies. Xencor renegotiated the terms of a 2011 collaboration with Amgen last October to regain the rights to its lead therapeutic candidate XmAb5871, for which the company successfully completed a Phase Ib/IIa clinical trial in rheumatoid arthritis [See Deal].

Amgen/Dezima

In a second pipeline-enhancing deal during the week, Amgen expanded its cardiovascular initiatives with the acquisition of the private Dutch biotech Dezima Pharma BV, gaining a late-stage cholesteryl ester transfer protein (CETP) inhibitor that could add an oral cholesterol-lowering agent to build out the franchise fronted by the firm’s injectable Repatha (Also see "CETP Inhibitors Back In The Fold: Amgen Dives In With Dezima Buy" - Pink Sheet, 16 Sep, 2015.).

The deal – under which Amgen agreed to pay $300 million up front and $1.25 billion in milestones – represents a big vote of confidence for CETP inhibitors, which had a rocky start [See Deal].

The Sept. 16 transaction shines a light on the industry's renewed interest in this class of medicines, with an emphasis on LDL-C reduction, rather than HDL-C increases, as a surrogate marker for cardiovascular benefit.

Dezima’s lead molecule, TA-8995, will add to Amgen’s growing portfolio of cardiovascular medicines. The company’s highly anticipated PCSK9 inhibitor Repatha (evolocumab) was approved for high cholesterol Aug. 27 and Corlanor (ivabradine) was approved for heart failure in April (Also see "Amgen’s Repatha To Launch Next Week; Narrow Indication Mirrors Rival Praluent" - Pink Sheet, 27 Aug, 2015.) (Also see "Amgen’s Repatha To Launch Next Week; Narrow Indication Mirrors Rival Praluent" - Pink Sheet, 27 Aug, 2015.).

As an oral drug, TA-8995 could plug a hole in Amgen’s portfolio for an easier to administer and potentially less expensive alternative to Repatha for high cholesterol, Exec VP-R&D Sean Harper said in an interview.

As injectable biologics, the price of Repatha and Sanofi/Regeneron Pharmaceuticals Inc.’s rival Praluent (alirocumab) have come under fire by payers. The drugs are priced at roughly $14,000 a year for treatment, a new expense for insurers compared to generically available statins.

But cost is only one piece of the puzzle, Harper said. “Let’s say someone’s high-risk LDL only needs to be reduced by 30 or 40 percentage points … and they are not excited about an injectable solution, then this could be the right solution for that patient.”

In a Phase IIb clinical trial testing TA-8995, the drug reduced LDL-C by 45% to 48% compared to baseline. The reduction was consistent as monotherapy and on top of statins. The reduction is not as high as the LDL-lowering effect seen with PCSK9 inhibitors, but it is higher than what has been seen with other CETP inhibitors, Amgen said.

“In the world of CETP inhibitors, that looks best in class,” Harper said. Merck & Co. Inc., Eli Lilly & Co. and Roche also have CETP inhibitors in development.

Amgen/NantWorks

NantPharma LLC, a subsidiary of Patrick Soon-Shiong's NantWorks LLC empire, licensed AMG 337 on Sept. 14 outside of Japan, Russia and other central Asian countries from Amgen, which previously partnered with Astellas Pharma Inc. to develop the cancer drug and four other compounds in certain Asia territories [See Deal].

AMG 337 is a small-molecule inhibitor of the cell-surface enzyme c-Met, under evaluation for the treatment of gastric cancer in a Phase II clinical trial. NantPharma will use its tumor molecular-profiling capability to identify people whose cancer has high levels of c-Met expression and enroll appropriate patients in future trials. The same strategy is being used in the development of ganitumab (AMG 479), which the NantWorks subsidiary NantCell LLC licensed from Amgen earlier this year [See Deal].

AMG 337 is the earliest-stage compound in Amgen's two-year-old, five-asset collaboration with Astellas. Amgen suspended development of rilotumumab, a later-stage c-Met inhibitor that was also part of the Astellas partnership, in November based on safety concerns in a Phase III gastric cancer study [See Deal].

NantWorks founder and main investor Soon-Shiong became one of the richest men in Los Angeles after selling Abraxis BioScience Inc. – developer of Abraxane (nab-paclitaxel, albumin-bound) – to Celgene Corp. for $2.9bn up front (Also see "Celgene Moves Into Solid Tumors With $2.9 Billion Abraxis Acquisition" - Pink Sheet, 5 Jul, 2010.). Since then, he's started several health information technology, genomics and drug-development companies under the NantWorks umbrella, including the newly public NantKwest LLC and recent venture capital fundraiser NantCell.

In addition to AMG 337, NantPharma is developing Cynviloq (paclitaxel nanoparticle polymeric micelle), a follow-up to Abraxane that was acquired from Sorrento Therapeutics Inc. in May for $90m up front and up to $1.3bn total [See Deal].

InSite Vision/Sun Pharma

Sun Pharmaceutical Industries Ltd. has snapped up ophthalmology firm InSite Vision Inc. as it sets its sights on a play in the US branded eye care space, edging out previous bidder and Canadian biotech QLT Inc.

Sun, which jumped into the fray through an unsolicited offer, is to acquire InSite via an indirect wholly owned subsidiary in an all-cash transaction for $0.35 per share, or about $48m in aggregate equity value, on a fully diluted basis (Also see "Sun Trumps Canadian Rival To Acquire InSite" - Scrip, 17 Sep, 2015.). The deal announced Sept. 15 has been approved by the boards of both InSite and the Sun Pharma subsidiary, and will be completed by means of a tender offer.

Significantly, InSite and QLT had in June this year reached a definitive agreement under which QLT was to acquire InSite in an all-stock transaction [See Deal]. But in early August, InSite said it had received an unsolicited proposal from a multinational pharmaceutical company (presumably Sun) to acquire all its outstanding shares at a price of $0.25 per share in cash.

Subsequently, InSite and QLT amended their merger agreement in late August, but Sun apparently went back in early September with a second unsolicited proposal to acquire all outstanding shares of InSite common stock at an increased price of $0.35 per share in cash.

InSite has now terminated its amended and restated merger agreement with QLT. InSite was required to pay a $2.667m termination fee to QLT, which has been paid on its behalf by the Sun Pharma subsidiary.

Celgene/Nurix

Celgene will pay Nurix Inc. $150m up front to develop and commercialize novel small molecules that modulate the ubiquitin proteasome system (UPS) in a deal that gives both companies multiple options for benefitting from joint oncology, inflammation and immunology programs [See Deal].

Harnessing the UPS, which controls protein levels within cells, to modulate protein homeostasis could lead to new treatments for cancer, autoimmune diseases and other conditions. While mutations in UPS genes drive many cancers, Nurix also notes that certain UPS genes encode key checkpoints in immune response.

Those factors make UPS genes attractive targets in immuno-oncology and for cancer drug developers like Celgene, whose top-selling product is the immunomodulatory drug Revlimid (lenalidomide) for multiple myeloma and other blood cancers.

With expertise in the field through both approved drugs and pipeline programs, Celgene decided to give Nurix an upfront payment that is almost five times the venture capital that the privately held biotech has raised since it was founded three years ago – $6.2m in seed capital in 2012 and a $25.1m Series B round in 2014 [See Deal].

Under the Sept. 16 agreement, Celgene will make an undisclosed equity investment in Nurix, on top of the $150m upfront payment, in exchange for an option to license future programs. Nurix may focus on E3 ubiquitin ligases and E2 conjugating enzymes during the option term to identify the best drug-discovery programs for oncology or inflammation and immunology indications. Nurix will control the drug-discovery process and remain responsible for development through the end of Phase I clinical trials.

In addition, Celgene may pay up to $405m in option and milestone fees per drug candidate if the company exercises its option for a global development and commercialization license. Nurix will earn tiered single-digit to low double-digit royalties on global sales. There is no limit on the number of drug candidates that may be created under the collaboration.

However, Nurix will retain US rights for certain candidates, including a right to co-develop and co-commercialize up to two programs in the US through a 50-50 profit/loss split with Celgene. The larger company would retain ex-US rights, but pay Nurix undisclosed option and milestone fees plus royalties on foreign sales. Nurix will retain all rights to drug candidates that Celgene chooses not to license.

AstraZeneca/BARDA

AstraZeneca PLC has entered into a public-private partnership with the US Biomedical Advanced Research and Development Authority (BARDA) to develop new antibacterials intended to address biothreat pathogens, in addition to antibiotic resistance, under a "portfolio" approach, which will allow the US government funds to be steered away from a product that proves to be unsuccessful early on in the R&D process to other promising candidates.

BARDA is providing $50m to AstraZeneca, which potentially could garner up to $170m under the collaboration announced Sept. 16, which was signed using the so-called "Other Transaction Authority" granted under the Pandemic and All-Hazards Preparedness Act of 2006.

BARDA noted that it typically supports development of individual products. But the agency said supporting the development of multiple drug candidates would increase the likelihood that one or more would advance to the level at which a company could apply for FDA approval.

The partnership allows for the antibiotics developed under the agreement to become available in the commercial marketplace, which would diminish the US federal government's need to stockpile the products for biodefense and would reduce long-term costs for taxpayers, BARDA said.

BARDA and AstraZeneca will manage and fund the portfolio together over the next five years. During joint annual portfolio reviews, the agency and the company are expected to determine which drug candidates move in or out of the portfolio, based on technical and financial considerations and each candidate's development progress.

BARDA noted that the first drug candidate in the portfolio combines two antibiotics – aztreonam and avibactam, known together as ATM-AVI – in development to treat Gram-negative infections for which there currently are limited treatment options.

Under the agreement, AstraZeneca is expected to conduct studies evaluating ATM-AVI and other antibiotic candidates for use in treating illnesses caused by deadly bioterrorism threats, such as meliodosis, glanders and plague.