12:00 AM
 | 
Dec 21, 2009
 |  BioCentury  |  Finance

Ebb & Flow

The 2004 merger of Fujisawa Pharmaceutical Co. Ltd. and Yamanouchi Pharmaceutical Co. Ltd. to form Astellas Pharma Inc. (Tokyo:4503) has led to big payoffs in the last two weeks for Calixa Therapeutics Inc. and Gloucester Pharmaceuticals Inc., which both were formed around compounds that Astellas chose to out-license.

Calixa was founded in 2007 based on ex-Asian rights to CXA-101, after Astellas decided to drop discovery and early development of antibiotics. The biotech raised a single $30 million venture round and last week agreed to be acquired by Cubist Pharmaceuticals Inc. (NASDAQ:CBST) for $92.5 million in cash and up to $310 million in development, regulatory and sales milestones.

The prior week, oncology company Gloucester was acquired by Celgene Corp. (NASDAQ:CELG) for $340 million in cash and $300 million in milestones in a deal built around Gloucester's Istodax romidepsin, which FDA approved in November to treat cutaneous T cell lymphoma (CTCL). Gloucester in-licensed Istodax from Fujisawa, which needed to off-load the compound just prior to the Japanese merger (see BioCentury, Dec. 14).

Gram negative is positive

The investors in Calixa, including Domain Associates; Canaan Partners; and Frazier Healthcare Ventures, are looking at anywhere from a 3X-plus return up to almost a 13.5X return.

CXA-101 is a cephalosporin antibiotic in Phase II testing for complicated urinary tract infection (cUTI). The company also is developing CXA-201, a combination of CXA-101 and the generic beta lactamase (LACTB) inhibitor tazobactam, which is expected to begin Phase II testing for complicated intra-abdominal infections and cUTI in 1H10 and nosocomial pneumonia in 2H10.

CXA-301, an inhaled formulation of CXA-101 to treat infections in cystic fibrosis patients, is in preclinical development.

According to Cubist SVP and CSO Steven Gilman, the company is most interested in the combination formulation CXA-201. While CXA-101 is most active against Pseudomonas aeruginosa and in multi-drug resistant Pseudomonas, in combination with tazobactam it also hits other Gram-negatives including E. coli and Klebsiella, and ESBL versions of Klebsiella.

Cubist is targeting an NDA submission in 2H13.

"It's very important to all of us that CXA-201 reaches market; 75% of the value is contingent on that," said Frazier's Patric Heron.

"There's not a lot out there for Gram-negative infection, CXA-201 was a pretty unique asset," he added.

According to Heron, 20 posters on preclinical and Phase I data for CXA-101 and CXA-201, presented at the Interscience Conference on Antimicrobial Agents and Chemotherapy (ICAAC) in September, generated interest from a number of potential acquirers.

For now, Cubist plans to develop the Calixa molecules in parallel with its own internal Gram-negative compound, CB-182,804, which is expected to have Phase I data in early 2010.

"We believe the Gram-negative marketplace is substantial, such that it could certainly tolerate both CXA-201 and CB-182,804 on the market," Gilman told Ebb & Flow. "We will be making decisions as we see the data that comes out."

Gilead's choices

If Gilead Sciences Inc. (NASDAQ:GILD) wants to build a cardiovascular franchise, it has its work cut out following last week's decision to drop darusentan after the hypertension compound failed a Phase III trial. But at least one investor is happy the company isn't throwing more money at the molecule, preferring that the funds be spent on Gilead's pulmonary and HIV businesses.

Gilead gained darusentan in its 2006 acquisition of Myogen Inc. for $2.5 billion. While the endothelin A receptor antagonist has never been the main focus of the biotech's cardiovascular business, investors earlier this year told BioCentury that it would complement this year's acquisition of CV Therapeutics Inc. Both darusentan and CVT's marketed angina drug Ranexa ranolazine would be targeted primarily at non-interventional cardiologists (see BioCentury, Aug. 3).

Last week, however, darusentan missed the co-primary endpoints of significantly reducing trough sitting blood pressure (SBP) and trough sitting diastolic blood pressure (DBP) in the Phase III DAR-312 trial to treat resistant hypertension. In April, the Phase III DAR-311 trial met the same co-primary endpoints.

As a result of DAR-312,...

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