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BioCentury Extra
As published Monday, March 30, 2015 6:06 PM PST


  • Teva acquiring CNS play Auspex for $3.5B

    Teva Pharmaceutical Industries Ltd. (NYSE:TEVA) is buying neurology play Auspex Pharmaceuticals Inc. (NASDAQ:ASPX) for $101 per share, or $3.5 billion in cash. The price is a 42% premium to Auspex's Friday close of $70.91, before the deal was announced. Auspex added $29.45 (42%) to $100.36 on Monday.

    Auspex plans to submit an NDA to FDA by mid-2015 for Austedo deutetrabenazine (SD-809) to treat chorea associated with Huntington's disease (HD). The deuterium-substituted analog of tetrabenazine, a vesicular monoamine transporter 2 (VMAT2; SLC18A2) inhibitor, has Orphan Drug designation for HD as well as Tourette's syndrome in patients aged 16 and younger. In December, SD-809 met the primary endpoint of improving chorea (sudden, rapid uncontrolled movements) associated with HD in the Phase III First-HD trial. Auspex expects top-line data in mid-2015 from the Phase III ARM-TD trial of the candidate to treat tardive dyskinesia (see BioCentury Extra, Dec. 16, 2014).

    Teva will fund the acquisition with cash on hand and expects the deal to be accretive to non-GAAP EPS in 2017.

    The deal has been approved by both companies' boards and is expected to close mid-year.

    Goldman Sachs advised Teva, and Goodwin Procter was its counsel. JPMorgan advised Auspex, and Cooley was its counsel.

    Teva rose $0.54 to $62.52 on Monday.

    Concert Pharmaceuticals Inc. (NASDAQ:CNCE), which also uses deuterium chemistry to improve existing drugs, gained $1.92 (14%) to $15.35.

  • Horizon buying Hyperion for $1.1B

    Horizon Pharma plc (NASDAQ:HZNP) will acquire rare disease company Hyperion Therapeutics Inc. (NASDAQ:HPTX) for $46 per share, or $1.1 billion in cash. The price represents an 8% premium to Hyperion's Friday close of $42.74.

    Horizon will gain two marketed drugs to treat urea cycle disorders (UCD): Ravicti glycerol phenylbutyrate and Buphenyl sodium phenylbutyrate. Combined sales of Ravicti and Buphenyl in 2014 were $113.6 million. Hyperion has submitted an MAA to EMA for Ravicti and expects a decision from EMA's CHMP in late 2015 or early 2016. Hyperion plans to submit an sNDA for Ravicti to treat UCD patient ages two months to two years in 2Q16, and another sNDA for patients less than two months of age by YE17.

    Both companies' boards approved the deal, which is expected to close next quarter. Horizon expects the acquisition to be immediately accretive to adjusted EPS.

    Jefferies, Citigroup, and Cowen were Horizon's financial advisors, and Cooley and McCann FitzGerald were its legal advisors. Centerview Partners and Houlihan Lokey advised Hyperion, and Shearman & Sterling was its counsel.

    Hyperion rose $3.24 to $45.98 on Monday, while Horizon gained $3.97 (18%) to $25.78.

  • Fujifilm acquiring Cellular Dynamics

    Fujifilm Holdings Corp. (Tokyo:4901) is buying iPSC supplier Cellular Dynamics International Inc. (NASDAQ:ICEL) for $16.50 per share, or $307 million in cash. The price is a 108% premium to CDI's close of $7.94 on Friday, before the deal was announced. CDI was up $8.48 (107%) to $16.42 on Monday.

    CDI produces industrial-scale quantities of human cells, including induced pluripotent stem cells (iPSCs). The company's customers use CDI's technology for drug discovery, screening and testing. CDI also is creating genetically matched donor cell banks to reduce the risk of stem cell rejection (see BioCentury Innovations, Feb. 19).

    Fujifilm said the deal gives it a foothold into iPSC-based drug discovery support services, and also plans to use CDI's technologies for regenerative medicine product development. Both companies' boards have approved the deal, which is expected to close next quarter.

    In 2014, CDI posted revenues of $16.7 million and an operating loss of $29.3 million.

  • OptumRx acquires Catamaran, consolidating PBMs

    OptumRx Inc., the pharmacy benefit manager unit of UnitedHealth Group Inc. (NYSE:UNH), will acquire Catamaran Corp. (NASDAQ:CTRX; TSX:CCT) for $61.50 per share, or $12.8 billion in cash.

    The combined company expects to fulfill about 1 billion prescriptions in 2015, ranking it behind the two largest PBMs, Express Scripts Holding Co. (NASDAQ:ESRX) and CVS Health Corp. (NYSE:CVS). Express Scripts expects to fulfill about 1.3 billion prescriptions this year; CVS Health said in December it expected to process 1.1 billion claims annually.

    UnitedHealth expects the acquisition to be accretive to its earnings by about $0.30 per share in 2016. The parties expect to close the transaction in 4Q15.

    Catamaran Chairman and CEO Mark Thierer will be CEO of the combined PBM, while OptumRx CEO Timothy Wicks will be president. Catamaran EVP of Operations Jeff Park will be COO of the merged company.

    Catamaran rose $11.51 (24%) to $59.83 in New York and C$15.04 (25%) to C$75.88 in Toronto on Monday. UnitedHealth gained $2.99 to $121.

  • Novartis, Aduro partner in STING deal

    Novartis AG (NYSE:NVS; SIX:NOVN) and Aduro Biotech Inc. (Berkeley, Calif.) partnered to develop cancer therapies using Aduro's cyclic dinucleotide (CDN) platform to generate receptor agonists of STING (transmembrane protein 173; TMEM173).

    Novartis will pay Aduro $200 million in cash up front and invest an additional $25 million for an undisclosed equity stake. Aduro will receive another $25 million in exchange for a separate equity stake on an undisclosed future date, and is eligible for up to $500 million in development milestones. Aduro will retain exclusive U.S. commercialization rights to resulting products, while Novartis will have exclusive ex-U.S. rights.

    The companies will share profits in the U.S., Japan and select European countries. Aduro is eligible for royalties in the mid-teens on sales elsewhere.

    The deal covers existing preclinical compounds from both companies as well as new candidates they may discover under the collaboration. Aduro said its ADU-S100 has been shown to induce tumor shrinkage and produce immune responses in mouse models of cancer. The companies declined to provide a timeline for entering the clinic.

    Novartis hired Glenn Dranoff to lead a newly formed research group focused on discovering and developing cancer immunotherapies. Dranoff was director of the Human Gene Transfer Laboratory Core and co-leader of the Cancer Vaccine Center at Dana-Farber Cancer Institute.

  • Merck Serono licenses Intrexon's CAR T tech

    The Merck Serono division of Merck KGaA (Xetra:MRK) licensed technology from Intrexon Corp. (NYSE:XON) to develop chimeric antigen receptor (CAR) T cell therapies against two undisclosed cancer targets.

    Merck Serono will pay Intrexon $115 million up front and will provide research funding for the two targets it selects. Intrexon is eligible for $826 million in milestones, plus tiered royalties. Intrexon will share the deal's proceeds equally with existing CAR T partner Ziopharm Oncology Inc. (NASDAQ:ZIOP).

    Intrexon and Ziopharm will conduct research until the two programs reach the IND stage, at which point Merck Serono will take over development. Merck Serono also will have the option to license other Intrexon/Ziopharm CAR T candidates during clinical development.

    In January, Intrexon and Ziopharm in-licensed CAR T technologies that use the Sleeping Beauty system from the University of Texas MD Anderson Cancer Center (Houston, Texas). The companies expect to bring five programs into the clinic this year (see BioCentury Extra, Jan. 14).

    Intrexon gained $3.30 to $46.30 on Monday. Ziopharm gained $0.16 to $11.61, while Merck KGaA added EUR 2.85 to EUR 106.25.

  • FDA panel to discuss Vertex CF combo

    FDA's Pulmonary-Allergy Drugs Advisory Committee will meet on May 12 to discuss an NDA from Vertex Pharmaceuticals Inc. (NASDAQ:VRTX) for a combination of lumacaftor (VX-809) and Kalydeco ivacaftor to treat cystic fibrosis (CF) in patients aged 12 and older with two copies of the F508 CF transmembrane conductance regulator (CFTR) mutation. FDA is reviewing the NDA under Priority Review, with a July 5 PDUFA date.

    Lumacaftor is a small molecule CFTR corrector, while Kalydeco is a small molecule potentiator of CFTR. The combination, which has breakthrough therapy designation from FDA, met the primary endpoint of two Phase III trials last year (see BioCentury, June 30, 2014).

    Vertex said about 22,000 (29%) of the 75,000 CF patients aged 12 and older in North America, Europe and Australia have two copies of the F508 mutation, making it the most prevalent form of CF. About 8,500 U.S. patients are homozygous for the F508 mutation.

    Kalydeco is approved in the U.S. to treat CF patients aged six and older with 10 other mutations; Vertex said more than 3,100 people in North America, Europe and Australia, about 4% of CF patients, are eligible for treatment with the drug.

    Vertex shares gained $0.91 to $121.25 on Monday.

  • Aetna to move HIV drugs to lower cost-sharing tiers

    Aetna Inc. (NYSE:AET) said its CoventryOne unit will move most HIV drugs in its Florida formulary from the specialty tier to generic or non-preferred brand tiers, effective June 1.

    Last May, the National Health Law Program (NHeLP) and the AIDS Institute filed a complaint with HHS's Office for Civil Rights (OCR) alleging that CoventryOne, Cigna Corp. (NYSE:CI), Humana Inc. (NYSE:HUM) and Preferred Medical Plan Inc. (Coral Gables, Fla.) were discriminating against HIV/AIDS patients in Florida by placing HIV medications in the highest tiers, which generally require higher co-pays or co-insurance, prior authorization requirements and quantity limits. The not-for-profits claimed the insurers were violating federal civil rights laws and anti-discrimination provisions of the Affordable Care Act (see BioCentury Extra, July 8, 2014).

    NHeLP said the insurers reached agreements last November with the Florida Office of Insurance Regulation to address concerns raised in the complaint.

    Humana Inc. said it has moved all specialty drugs below a $600 monthly threshold to the lowest tiers but did not specify if HIV drugs were included. Neither Cigna (NYSE:CI) nor Preferred Medical Plan responded to inquiries.

  • Management tracks

    Obesity play Orexigen Therapeutics Inc. (NASDAQ:OREX) hired Tom Cannell as chief commercial officer. He will replace Mark Booth, who is departing. Cannell most recently was head of the global human health operating model team at Merck & Co. Inc. (NYSE:MRK).

    Cancer company Sorrento Therapeutics Inc. (NASDAQ:SRNE) hired George Ng as EVP and chief legal officer. Previously, Ng was SVP and general counsel at BioDelivery Sciences International Inc. (NASDAQ:BDSI).

    Cancer immunotherapy company Vaxon Biotech (Paris, France) named founder Konstantinos Kosmatopoulos CEO. He retains his title of CSO.

  • Chi-Med's fruquintinib meets in mCRC Phase II

    Hutchison China MediTech Ltd. (LSE:HCM) said fruquintinib (HMPL-013) met the primary endpoint of progression-free survival (PFS) in a Chinese Phase II study to treat metastatic colorectal cancer (mCRC).

    Chi-Med said its majority-owned Hutchison MediPharma Ltd. R&D subsidiary is still assessing secondary efficacy endpoints, including objective response rate (ORR), disease control rate and overall survival (OS).

    The trial compared fruquintinib vs. placebo plus best supportive care in patients with mCRC as a third-line therapy.

    In December, HMP began a Phase III study of the small molecule that selectively inhibits the tyrosine kinase activity associated with VEGF receptors to treat mCRC patients who have failed at least two prior therapies. HMP also started a Phase Ib study of the compound in October 2014 to treat gastric cancer, and a Phase II study in June 2014 to treat non-small cell lung cancer (NSCLC).

    Chi-Med granted Eli Lilly and Co. (NYSE:LLY) rights to commercialize fruquintinib in China under a 2013 deal (see BioCentury Extra, Oct. 9, 2013).

    Chi-Med gained 25p to 1,315p on Monday.

  • BioDelivery falls on Phase III miss

    BioDelivery Sciences International Inc. (NASDAQ:BDSI) shed $3.38 (24%) to $10.51 on Monday after its clonidine topical gel (ARC-4558) missed the primary endpoint in a Phase III trial to treat painful diabetic neuropathy (PDN).

    In the trial, patients treated with clonidine topical gel did not experience a statistically significant change in average Numeric Pain Rating Scales (NPRS) compared to those who received placebo. BioDelivery said the trial did meet secondary endpoints, including a statistically significant improvement in pain symptoms as measured by the Neuropathic Pain Symptom Inventory (p=0.05) and quality of life as measured by the EuroQOL Questionnaire (p=0.04).

    BioDelivery said the outcome was unexpected given positive results from an interim analysis, and said patients recruited after the interim analysis performed differently than those previously assessed. The company plans to refine criteria for patient recruitment and site selection for another Phase III trial.

    The topical 0.1% gel formulation of clonidine has Fast Track designation from FDA for PDN. BioDelivery has exclusive, worldwide rights to develop and commercialize clonidine topical gel from Arcion Therapeutics Inc. (Baltimore, Md.) under a 2013 deal.

  • Novan raises $50M in mezzanine round

    Novan Inc. (Durham, N.C.) raised $50 million in a mezzanine financing, exceeding the round's initial target of $25 million. New investor Malin Corp. plc (ISE:MLC) led the round and was joined by undisclosed existing investors.

    Novan plans to present top-line data from its a Phase IIb trial of SB204 to treat acne vulgaris by early 3Q15. The nitric oxide (NO)-releasing compound is slated to enter Phase III testing by 1Q16.

    In 2Q15, the company plans to start Phase II testing of SB206, a topical antiviral, to treat external genital warts.

    Malin's Kelly Martin and Sean Murphy joined Novan's board, as did retired Ernst & Young LLP audit partner W. Kent Greer. Malin raised EUR 302 million ($318 million) this month for its investment fund, listed on the Irish Stock Exchange (see BioCentury, March 9).

  • Raising orphans: How pharma can capture value while treating rare diseases

    In a challenging environment for pharmaceuticals, the orphan sector offers the prospect of strong growth and attractive profit margins--along with the opportunity to improve the lives of patients with often debilitating conditions. However, commercial success is not guaranteed and the regulatory and access bars are rising. L.E.K. Consulting looks at the changing dynamics of the orphan market and identifies winning strategies designed to capture value within this sector. Click here to download the whitepaper.


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