Celgene & Avila Forge Permanent Ties
Jan26

Celgene & Avila Forge Permanent Ties

Today brought a spate of M&A activity in the biotech space, with Amgen unveiling a $1.2 billion bid for Micromet, and Celgene agreeing to pay up to $925 million for Avila Therapeutics. Both deals brought the acquirer a drug in development to treat blood cancers, while also adding a platform technology to their research engines. Being all about the chemistry, The Haystack is particularly interested in the Celgene/Avila deal, which involves covalent drug development technology. Celgene is paying $350 million upfront, with the promise of up to $195 million more if Avila’s lead covalent drug candidate, AVL-292, reaches the market. Pushing other covalent drugs through the pipeline could garner Avila shareholders another $380 million. So what is a covalent drug, anyway? As C&EN's Lila Guterman described last fall, covalent drugs form a permanent link with their target. By comparison, most conventional drugs are designed to reversibly bind to their targets—in other words, they can stick and “un-stick” to a protein. The beauty of a covalent drug is that its specificity and potency means it can be given in low doses. As Guterman explains, patients only be given enough of the drug for molecule to reach each target protein molecule, and then another dose only when the body has generated more of that target protein. The low dose means less potential for drug-drug interactions and off-target effects. Indeed, for years, scientists avoided developing covalent drugs out of fear that serious toxicity will arise if a covalent drug happens to permanently stick itself to the wrong protein. Check out Guterman’s piece for a cautionary toxicity tale from none other than “Rule-of-Five” inventor (and former Pfizer researcher) Christopher Lipinski. The current generation of covalent drugs, however, is designed to assuage those fears through their highly selective and weakly reactive nature. Avila isn’t the only one banking on better molecular design leading to successful drugs: Zafgen’s obesity drug candidate ZGN433 also covalently binds to its target, an approach that—if it works—could enable it to sidestep the side effect issues that have plagued the obesity drug space. So are these covalent drugs worth the price tag? Avila’s pipeline is relatively young, meaning there isn't a lot of data to go on: AVL-292 is in Phase I studies in lymphomas; a compound targeting mutant EGFR is also in Phase I trials; meanwhile, two Hepatitis C drug candidates in preclinical studies. The company has also made public preclinical date on its PI3Kα-selective inhibitor (the same target as Intellikine’s INK1117, one of the drivers behind Takeda’s $190 million acquisition of...

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Amgen Discusses Biosimilars Strategy
Apr22

Amgen Discusses Biosimilars Strategy

Yesterday, Amgen held its first business strategy meeting since the fall 2008, and mixed in with much talk of its bone-loss treatment denosumab was a discussion of its strategy around biosimilars. The company gave its view of the impact of generic versions of its biologic drugs in Europe and the U.S., as well as the opportunity for its own growth in the space. Several core drugs in the Amgen portfolio will be under pressure from biosimilars after 2015, but management downplayed the impact the competition would have on its business. Because of their complexity, biosimilars aren’t subject to the same “patent cliff” small molecules face when their patent expires, Amgen’s CEO Kevin Sharer said. And although the company expects biosimilars to exist in the U.S., and for prices to be impacted, “we do not expect revenues to go away overnight,” he added. Although U.S. regulatory authorities have yet to sort out a pathway for approving biosimilars, generic entrants have already made their way into European markets. Biosimilars have taken over about 6% of the market for Amgen’s anemia treatment Aranesp, and pricing has been “pretty disciplined” after their first few months on the market, noted Amgen’s president and chief operating officer Robert A. Bradway. European market share for biosimilar competitors to Amgen’s filgrastim franchise, which includes the multi-million dollar seller Neulasta, has also stayed steady at around 6%. At the same time, Sharer cautioned that things will not play out identically to the U.S. and Europe. Further, he reminded the audience that “there is no such place as Europe—that’s some figment of a travel agent’s imagination." The experience across countries has not been uniform, and generic erosion has occurred much faster in some countries than others. Still, looking back to Amgen’s expectations for the impact of biosimilars had been far bleaker than what has occurred so far in Europe. “Frankly, if we’d beeen sitting here inside an Amgen meeting five years ago…we’d have anticipated a different outcome” regarding biosimilars, Sharer added. Amgen’s chief also pointed out that because Amgen has such broad experience in developing and manufacturing large molecules, there could be a significant upside as the company starts to compete in the biosimilars arena. The business won’t immediately skyrocket after 2015, “but in the several years after that, it has multi-billion dollar potential for us,” he said. The company has created a small biosimilars unit, and Sharer says that in talking with partners it appears that establishing a presence in the arena “will not require much investment on our...

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Merck’s Kamarck Talks Biosimilars
Jul02

Merck’s Kamarck Talks Biosimilars

Reuters has a report out today on the potential market for biosimilars, or generic versions of biologic drugs. The players will be few, and the challenges many, the report suggested. “Access to the nascent market for so-called biosimilars, worth an estimated $10 billion (6.6 billion pounds) by 2015, will be limited to a close circle of specialist companies with the means to invest heavily and to fend off a legal onslaught, analysts said.” Coincidentally, I sat down earlier this week with Michael Kamarck, the new head of the company’s biosimilars arm Merck Bioventures. Kamarck, who previously headed up biologics manufacturing at Wyeth, had a strikingly similar perspective on the market. He also expects few players based on a high barrier to entry. Biosimilars players will need to have technology capabilities (see Genzyme’s woes for the challenges of manufacturing biologic products), the financial mettle to conduct large clinical trials, the ability to navigate a still fuzzy regulatory pathway, and the right commercial strategy once a biosimilar is approved. When asked about drug pricing, Kamarck noted that in markets with a limited number of players, prices tend to stabilize after an initial drop. The biosimilars approved in Europe generally cost about 70% of the innovator’s price, and he expects the U.S. market will shake out in a similar way. “We think that’s a good model and provides a fair return and a large advantage for patients,” he said. Why so little of a discount? As the Reuters article explains, the “development, production and marketing of a copycat version of biological drugs already cost about 50 times the amount needed to launch a generic copy of conventional chemical drugs.” However, biosimilars players could have an advantage of more cost-effective manufacturing. When asked whether he was worried about innovators simply lowering their price or selling their own biosimilars, a strategy Amgen seems prepared to pursue, Kamarck pointed to the significant improvements in yields of the mammalian cell culture lines used to make many top-selling biologics. The innovator, on the other hand, has to go through FDA to make changes to their manufacturing process. “It might well be that coming into the game now, you can make manufacturing improvements to the processes that the innovator is stuck with,” he adds. Merck has two biosimilars, both acquired last year from Insmed, in the clinic: MK-4214 and MK-6302, generic versions of Amgen’s Neupogen and Neulasta, respectively. The company plans to  have five biosimilars in late development n 2012, though isn’t identifying which innovator medicines they will be copying. Development of MK-2578, a similar version of Amgen’s Aranesp, was abandoned earlier this year due to regulatory and...

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Forest licenses TransTech’s glucokinase activators
Jun08

Forest licenses TransTech’s glucokinase activators

Interest in glucokinase activators, a class of diabetes compounds with a rocky past, appears to be reviving. Forest Laboratories agreed today to pay $50 million upfront and up to $1.1 billion in milestones for access to TransTech Pharma’s glucokinase activator program. The deal includes the rights to TTP399, which is poised to start Phase II trials, and several other compounds in pre-clinical and Phase I studies. TransTech’s glucokinase activator (GKA) program was developed during a six-year research pact with Novo Nordisk. The Danish firm licensed the program back to TransTech in 2007, when it decided to divest its small molecule drug discovery programs. So what makes glucokinase an interesting diabetes target? A few words on GKAs from our earlier coverage: Glucokinase belongs to a family of enzymes called hexokinases, which catalyze the phosphorylation of glucose to glucose-6-phosphate, a critical first step in metabolizing sugar. Hexokinases are generally marked by their ubiquity—several serve housekeeping functions and are thus found in nearly every tissue in the body—and their tight bond to glucose. But glucokinase is something of a black sheep among hexokinase kin. It is found in relatively fewer tissues, and its affinity for glucose is delicate. In the pancreas it is believed to "sense" just the right concentration of glucose in β cells to signal the release of insulin. And in the liver glucokinase initiates the first step of glucose metabolism, kicking into action after a meal and later sensing when the body is in a fasting state and needs to store glucose. Back when we wrote about GKAs in 2008, several of the companies publicly working on this target talked up the dual roles of glucokinase in the liver and pancreas. While newer diabetes drugs like Merck’s Januvia and Amylin’s Byetta only affect the pancreas, GKAs were expected to have an effect on both organs, improving their control over blood glucose. TransTech, however, is touting the fact that its GKA compounds are “liver selective.” The biggest safety concern with GKAs in development has been hypoglycemia, or low blood sugar. TransTech says that “by activating glucokinase selectively in the liver but not in the pancreas, it may increase glucose utilization and lower blood glucose levels without inducing excessive insulin secretion thus reducing the risk of hypoglycemia.” Interest in glucokinase as a target has waxed and waned. Roche was actively pursuing GKAs not long ago, but a perusal of their public pipeline, which includes multiple diabetes programs,  shows no mention of the target. And a quick look at clinicaltrials.gov shows that Lilly suspended work on its program—licensed from OSI Pharmaceuticals for $25 million upfront in 2007--pending further toxicology testing. Still, late...

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Array, Novartis Team for Mek-inhibitor
Apr19

Array, Novartis Team for Mek-inhibitor

Boulder, Colo.- based Array BioPharma is again cashing in on its discovery platform for small molecules that block the protein kinase Mek. Novartis has agreed to pay $45 million out of the gate for ARRY-162, a MEK-inhibitor in Phase I cancer trials, and other back-up MEK-blocking compounds. As part of the Novartis deal, Array could earn up to $422 million in additional milestones as the compound moves through the pipeline. Array is keeping a hand in the project, agreeing to pay for part of the development costs for the compound in exchange for what it calls “a significantly higher royalty rate” for U.S. sales of ARRY-162. ARRY-162 blocks MEK, one of several protein kinases in a cell signaling pathway associated with cancer cell proliferation and survival. The compound is currently in an early-phase study in advanced cancer patients with solid tumors to determine the right dose and assess its safety. ARRY-162 isn’t the first MEK inhibitor Array has married off. AstraZeneca licensed what is now known as AZD6224 as part of a long-standing collaboration around the protein target. Though AstraZeneca continues to develop AZD6224, most notably testing the drug in combination with Merck’s Akt inhibitor MK-2206, Array was freed from the exclusivity of the partnership last year. But in the six years of the pact, the biotech not only earned research funding, but pocketed some $96 million in milestone payments. From the looks of the Novartis deal structure, it looks like the Swiss drug major will pick up where AstraZeneca left off. Array appears to be on a bit of a roll in scoring deals that wed reasonable upfront payments with research funding, while also keeping a healthy slice of future product sales. The biotech scored a $60 million upfront payment in December, when Amgen signed on to jointly develop ARRY-403, a second-generation glucokinase activator in Phase I. Glucokinase “senses” glucose in the pancreas by catalyzing the phosphorylation of glucose to glucose-6-phosphate, a critical first step in metabolizing sugar. Drugs like ARRY-403 enable the pancreas to better sense glucose, leading to increased insulin production. Amgen also agreed to provide funding over the course of a two-year research collaboration around glucokinase...

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