Deals Shaping The Medical Industry, February 2014

Derived from Strategic Transactions, Informa’s premium source for tracking life sciences deal activity, the Dealmaking column is a survey of recent health care transactions listed by relevant industry segment – In Vitro Diagnostics, Medical Devices, and Pharmaceuticals – and then categorized by type – Acquisition, Alliance, or Financing. This month’s column covers deals announced December 2013 through January 2014.

IN VITRO DIAGNOSTICS

Alliances

NovaMedica LLC

Venter Pharma SL

Russian specialty pharmaco NovaMedica LLC received exclusive rights to commercialize Spanish firm Venter Pharma SL’s lactose intolerance diagnostic LacTEST in Russia and the CIS. (Dec.)

NovaMedica will perform clinical studies required for gaining approval in the licensed territories, where it expects to launch LacTEST in 2015. Venter Pharma retains rights in the rest of the world. Venter was created in 2003 based on work carried out at the Universidad Autónoma de Madrid and Consejo Superior de Investigaciones Cientificas. LacTEST (gaxilose) is an orally administered molecule designed to diagnose hypolactasia or lactose intolerance by measuring xylose levels in the blood and urine. (Low xylose levels indicate low lactase activity.) The product is already approved in Spain and Germany.

Financings

CombiMatrix Corp.

CombiMatrix Corp. (cytogenomic testing for prenatal diagnosis, miscarriage, and pediatric developmental disorders) netted $11.2mm through the public sale of 12k units at $1k apiece. Each unit consisted of one Series D preferred share (convertible into 485.4369 common shares at $2.06) and a five-year warrant to purchase 485.4369 common at $3.12. CombiMatrix's stock averaged $2.80 at the time of the sale. (Dec.)

Investment Banks/Advisors: Ladenburg Thalmann & Co. Inc.

NanoString Technologies Inc.

A follow-on public offering by NanoString Technologies Inc. of 2.97mm common shares priced at $18.50 has netted the molecular diagnostics and research tools firm $51.7mm. Some of the proceeds will fund commercialization of the company's Prosigna prognostic gene signature assay for breast cancer, including setting up a dedicated sales force. A week prior to the financing, NanoString announced that it licensed an exclusive option from [Massachusetts General Hospital] to mulitplex protein analysis IP pertaining to the company's nCounter gene expression analysis system. (Jan.)

Investment Banks/Advisors: JP Morgan Chase & Co.; Leerink Partners LLC; Morgan Stanley & Co.; Robert W. Baird & Co. Inc.

MEDICAL DEVICES

Mergers & Acquisitions

HeartWare International Inc.

CircuLite Inc.

HeartWare International Inc. (HWI; cardiovascular devices) acquired closely held circulatory support systems developer CircuLite Inc. for $30mm, of which $18mm was paid in common shares (230k shares were issued) and $12mm in cash to settle debt and transaction expenses. HWI also agreed to make earn-out payments of up to $320mm based on meeting regulatory and commercialization milestones involving Synergy over the next ten years. (Dec.)

HWI will pay $20mm in common shares when the Synergy surgical system is fully relaunched in Europe. It will also provide in cash or stock or a combination of the two: up to $75mm for gaining the CE Mark for the Synergy endovascular system; $50mm when Synergy endovascular gets FDA premarket approval; up to $15mm when 12-month endovascular/surgical sales combined reach $30mm; $85mm when 12-month endovascular/surgical sales of Synergy reach $250mm; and up to $75mm to cover sales royalties (up to 12.5%) of surgical/endovascular products. Formed in 2004, CircuLite has developed the Synergy partial-support system for ambulatory early-stage chronic heart failure patients who are not yet inotrope-dependent. Synergy received the CE Mark last year but was taken off the market because of issues with the inflow cannula. The system, which is designed for long-term use, reduces the heart’s workload while increasing blood flow. HWI officials say they believe there is a larger percentage of the population that can use Synergy than the number of end-stage CHF patients that use HWI’s full-support ventricular assist devices (VAD). While HWI’s HVAD and MVAD are minimally invasive treatments, CircuLite’s Synergy is even less invasive. It is the size and weight of an AA battery and is implanted using a minithoracotomy procedure, not a sternotomy or cardiopulmonary bypass. The inflow cannula is put in the left atrium and the outflow graft is attached to the subclavian artery. The micropump is then put in a pocket similar to a pacemaker and linked to the canula and graft, then connected to a wearable external controller and battery pack. Synergy is also developing an endovascular version of Synergy that will use transcatheter techniques and subcutaneous pump implantation. Investment Banks/Advisors: Credit Suisse Group (CircuLite Inc.); Perella Weinberg Partners (HeartWare International Inc.)

Medtronic Inc.

TYRX Inc.

Medtronic PLC acquired private TYRX Inc. (developing combination drug/device products) for $160mm in cash plus earn-outs. (Jan.)

TYRX uses tyrosine-based bioresorbable polymers to create drug-eluting products such as coated medical devices and sustained-release injectable formulations. The firm’s main product, the FDA-approved AIGISRx resorbable antibacterial envelope, is designed to hold a pacemaker pulse generator or defibrillator to create a stable environment when implanted into the body. The biocompatible mesh contains the antimicrobial agents rifampin and minocycline, which reduce surgical site infections. The AIGISRx R is for use with cardiac implantable electronic devices, while the AIGISRx N is for spinal cord neuromostimulators. TYRX licensed technology from Baylor College of Medicine, the University of Texas' MD Anderson Cancer Center, and Rutgers University. TYRX's IP portfolio covers over 16 issued and pending patents. The company is backed by investors including HLM Venture Partners, Clarus Ventures, and Pappas Ventures. Medtronic purchased TYRX to bring in products that improve the safety of surgical procedures, reduce infection risk, and minimize associated health care costs. The company plans to incorporate TYRX into its tachycardia business, which sells implantable cardioverter defibrillators.

Polymer Technology Systems Inc.

Bayer AG

Bayer Diabetes Care

Bayer AG’s Bayer Diabetes Care sold its A1CNow product line to point-of-care diagnostics maker Polymer Technology Systems Inc. (Dec.)

The transaction includes the A1CNow+ multi-test (used by health care professionals) and A1CNow SelfCheck (sold in pharmacies for at-home patient markets). PTS will continue to manufacture the products at the Sunnyvale, CA facility. Bayer, which acquired A1CNow in the 2006 acquisition of Metrika, discontinued the products in late September 2013 in order to focus on its core blood glucose monitors and test strips including Contour and Breeze 2. The hand-held A1CNow device displays A1C (glycated hemoglobin) levels, which indicate the average blood glucose control for a patient over two-to-three months (the A1C figure is directly proportional to how much glucose is in the blood). A small blood sample is required and results show within five minutes. In its portfolio, PTS will now have products for diabetes alongside heart disease. The company, which was founded in 1992, already sells the CardioChek point-of-care lipid profile diagnostic for testing levels of total cholesterol, HDL cholesterol, and triglycerides.

Stryker Corp.

Patient Safety Technologies Inc.

Device giant Stryker Corp. agreed to buy Patient Safety Technologies Inc. (PST; has a technology to prevent retained surgical sponges). Stryker offered $2.22 per common share in cash (a 51% premium), and cash in exchange for their preferred shares ($100 for each of 11k Series A preferred, and $296 for each of 70k Series B shares). The total deal value is about $108mm. (Dec.)

PST provides the SafetySponge system through its wholly owned subsidiary, SurgiCount Medical Inc., to over 300 US hospitals. The platform is made up of the bar-coded Safety-Sponges line (x-ray detectable gauze sponges, laps and towels), the SurgiCounter handheld computer and barcode scanning device, and the SurgiCount360 software system. Together, the technology helps to prevent retained foreign objects (RFO) in the operating room. Annually, there are over 2,300 RFO incidents, with each occurrence costing hospitals over $400k. PST’s revenues from its system for the nine-month period ending September 30, 2013 were $14.9mm, while total 2012 revenues came in at $17.6mm, up from just $9.5mm in 2011. Stryker will offer the SafetySponge system through its Instruments division, which already sells products that reduce hazards and streamline operations in perioperative settings. Investment Banks/Advisors: Bank of America Merrill Lynch (Patient Safety Technologies Inc.)

Alliances

BioD LLC

Derma Sciences Inc.

Regenerative medicine firm BioD LLC granted Derma Sciences Inc. (wound care therapies and dressings) exclusive rights to sell two of its human amniotic membrane-based wound products in North America. Derma Sciences will market them under the AmnioMatrix brand. (Jan.)

Derma Sciences paid cash up front, and also issued a five-year warrant for 100k common shares (valued at $1.1mm based on the current market average) at an exercise price of $11.81. BioD can exercise 25% of the warrant shares immediately, with the remaining 75% exercisable in portions based on certain achievements. BioD also gets sliding-scale royalties, which will decrease in percentage as net sales increase. Additionally, Derma will pay development and commercialization milestones, and agreed to fund a diabetic foot ulcer study. The two products are a cryopreserved allograft used as a wound covering for localized tissue defects, and an amniotic extracellular membrane that serves as a resorbable allograft for tissue repair and regeneration. Derma’s rights cover use of the products for partial/full thickness burns, ulcers (pressure, venous, diabetic, and chronic vascular), tunnel/undermined wounds, as well as wounds from surgery, trauma, and radiation, and post-surgical/draining wounds. BioD retains rights to manufacture and sell the products in other specialties, including neurosurgery, orthopedics, and ophthalmology. Derma will hire 12 new sales representatives (bringing the total to 50) to sell the AmnioMatrix line alongside its own advanced wound care products, including the TCC-EZ casting system for diabetic foot ulcers. AmnioMatrix could also be considered a second-line option for patients not treated with Derma’s DSC127, an angiotensin analog in Phase III also for diabetic foot ulcers, if that therapy is approved.

Gruppo Angelini

APR Applied Pharma Research SA

Swiss health care company APR Applied Pharma Research SA granted Gruppo Angelini (pharmaceuticals and hospital products) rights to sell its acute and chronic wound treatment Nexodyn in Italy. Angelini will market the product as Amuphase. (Dec.)

APR designed Nexodyn/Amuphase based on its TEHCLO technology, which allows for the production of acidic and super-oxidizing solutions containing free chlorine species (including a very high concentration of stabilized hypochlorous acid). The therapy gained CE Mark approval in October 2013 for acute wounds, burns, venous and pressure ulcers, and diabetic foot ulcers. Angelini adds Amuphase to its hospital portfolio, and will market it alongside products including Sanyrene oils for pressure sore prevention, and a variety of hydrocolloid, alginate, hydrogel, and lipido-colloid dressings.

Organogenesis Inc.

Shire PLC

Wound healing firm Organogenesis Inc. bought Shire PLC’s Dermagraft, including patents, trademarks, know-how, regulatory filings and registrations, a manufacturing facility, equipment, materials, product inventory, and accounts receivable. (Jan.)

As of September 30, 2013, the acquired assets were valued at $683mm. Shire paid no money up front but will provide Organogenesis with up to $300mm in sales milestones until 2018. (The annual net sales targets are estimated to range from $70mm in 2014 and 2015 to up to $250mm.) Consisting of fibroblasts, extracellular matrix, and a bioabsorbable scaffold, Dermagraft is approved in the US and Canada for treating full-thickness diabetic foot ulcers. The product is designed for use with standard wound care regimens and in patients having adequate blood supply to the involved foot. Shire will retain past liabilities associated with an investigation being conducted by the Department of Justice relating to the sales and marketing practices of Advanced BioHealing (now Shire Regenerative Medicine Inc.), the originator of Dermagraft. Shire divested the assets to focus on higher priority projects in its portfolio. Investment Banks/Advisors: Lazard LLC (Shire PLC)

Samsung Electronics Co. Ltd.

Samsung Electronics America Inc.

NeuroLogica Corp.

Stryker Corp.

Leading device firm Stryker Corp. received exclusive rights to NeuroLogica Corp. 's (medical imaging technologies; acquired by Samsung Electronics Co. Ltd.'s Samsung Electronics America Inc. last year) BodyTom portable CT scanner, which Stryker will sell alongside its own NAV3i surgical navigation platform. The deal is specific to the neurology, spine, orthopedic, and trauma surgery specialties. (Jan.)

BodyTom is a 32-slice full body CT scanner that can be moved from room to room throughout a hospital, giving doctors the ability to get high-quality CT scans in a clinic, ICU, operating suite, or ER. The system has an 85cm gantry and 60cm field of view, and is compatible with picture archiving and communication systems (PAC), electronic medical records, and surgical planning and navigation systems. Stryker’s NAV3i consists of a 32” HD monitor, camera arm with a proprietary built-in navigation camera, and a touchpad user interface system. The agreement seems to be an expansion of a broader collaboration announced in April 2012, in which the companies agreed to investigate the development of an integrated surgical navigation unit for BodyTom. While Stryker will exploit the system’s applications in its licensed specialties, NeuroLogica plans to continue exploring new areas for BodyTom's use, while also working on other core portable products CereTom (eight-slice small bore scanner) and inSPira HD (SPECT system for brain imaging).

Seguro Surgical Corp.

The OR Co.

The OR Co. (gynecologic and general surgery products) acquired the assets related to Seguro Surgical Corp.’s Lap Pak abdominal surgery device. (Dec.)

Seguro obtained exclusive global rights to Lap-Pak from Johns Hopkins University in October 2009 and has since developed the device under a grant from the Maryland Technology Development Corp. Current abdominal surgeries or laparotomies use cotton pads or sponges to pack and retain the bowels away from the surgical area, which is risky and time-consuming. In addition, this method can result in cotton fibers and debris left in the surgical site, potentially leading to bowel obstruction, infertility in women, chronic pain, and complications during future surgeries. Lap Pak is a soft contoured silicone that’s placed in the abdomen in one simple motion, staying secure during the entire surgery without the need for repositioning. The OR Co. will offer the product through its extensive worldwide distribution network.

Financings

Aurora Spine Corp.

Six months after closing its IPO, Aurora Spine Corp. grossed $9.17mm ($Cdn10mm) through a private placement of 3.17mm common shares at $2.89 each (a 17% discount). The company will use some of the funds to help manufacture and commercialize its Zip minimally invasive interspinous process lumbar fusion device. Clarus Securities was the placement agent. (Jan.)

K2M Group Holdings Inc.

K2M Group Holdings Inc., the world’s largest private spinal device company, filed for its initial public offering. (Jan.)

K2M sells spinal stabilization and minimally invasive systems, biologics, and technologies for motion preservation, annular repair, and nucleus replacement to treat deformity, degenerative conditions, trauma, and tumors. Named after geographical locations, specific lines include Aleutian, Blue Ridge, Cayman (recently received 510(k) approval from the FDA), Chesapeake, Denali, and Natural Bridge. Just a few months ago K2M received European distribution rights to Amedica Corp.’s silicon nitride interbody spinal fusion devices, which offer faster fusion and enhanced new bone growth and osteointegration compared with PEEK and titanium-based devices.

PHARMACEUTICALS

Mergers & Acquisitions

Almirall SA

Aqua Pharmaceuticals LLC

PE Firm RoundTable Healthcare has sold closely held US specialty dermatology company Aqua Pharmaceuticals LLC to Barcelona-headquartered Almirall SA for $327.6mm in cash up front (including $22.6mm pertaining to the amortization of long-term tax assets) and $75mm in potential regulatory and commercialization earn-outs expected to be reached in 2014-5. Almirall will not assume Aqua’s debt. (Dec.)

Nine-year-old Aqua, majority owned by RoundTable since mid-2010, markets Fluoroplex for solar keratosis; Monodox for severe acne; and Xolegel, Cordran, and Verdeso for dermatoses. (Corran and Monodox came from a 2005 alliance with Watson, now part of Actavis, while Stiefel granted Aqua rights to Verdeso (earlier this year) and Xolegel (in 2011)). Aqua expects to report sales of $127mm for FYE 2013. Aqua’s products will complement Almirall’s dermatology portfolio, which includes treatments for psoriasis, eczema, acne, and skin infections. The transaction is expected to widen Almirall’s exposure in the North American dermatology drug market; it already sells products in Mexico and Canada. Almirall’s international sales represent over 50% of its total revenue; last year the company said it expected to grow its worldwide sales 75% by 2014. Investment Banks/Advisors: Centerview Partners LLC (Almirall SA); Deutsche Bank AG (Aqua Pharmaceuticals LLC)

Alnylam Pharmaceuticals Inc.

Merck & Co. Inc.

Sirna Therapeutics Inc.

Alnylam Inc. (RNAi therapeutics for genetic diseases) acquired Merck & Co. Inc.’s Sirna Therapeutics Inc. RNAi division for $186mm up front, plus earn-outs and royalties. (Jan.)

Alnylam paid $25mm in cash and issued 2.5mm of its common shares (valued at $161mm based on the market average, giving Sirna shareholders a 3.8% stake in Alnylam). The company also committed to certain payments based on achievement of products in both Alnylam’s and Sirna’s pipeline. For Alnylam’s RNAi compounds that are covered by Sirna’s patent estate, Alnylam could shell out $10mm in regulatory milestones, plus low-single-digit sales royalties. Regarding continued development by Alnylam of projects in Sirna’s coffers, Alnylam could hand over up to $105mm in earn-outs ($40mm for regulatory achievements and $65mm in sales milestones), plus single-digit royalties. Merck paid $1.1bn for Sirna in 2006, at the time attracted to the company’s potential for expanding Merck’s RNAi presence. Sirna was then working on a short-interfering RNA (siRNA) therapy for wet age-related macular degeneration, and also had projects in the works for CNS, metabolic, dermatology, and infectious diseases. Two years ago, though, Merck appeared to back down from the RNAi field, and closed a Sirna facility, laying off workers in the process. While the Big Pharma vowed to restructure its R&D programs and focus on other key development areas, it did hold onto some assets--patents, siRNA conjugate technologies and other delivery techniques, and preclinical candidates--which Alnylam will now take over.

Cocrystal Discovery Inc.

Biozone Pharmaceuticals Inc.

Public OTC drug developer BioZone Pharmaceuticals Inc. merged with private antivirals developer Cocrystal Pharma Inc. (Jan.)

Once the transaction is finalized, Biozone and Cocrystal will own 40% and 60% of the combined company, respectively. The merged entity, Cocrystal Pharma Inc., will have its headquarters in Bothell, WA and trade on the OTC Bulletin Board under the ticker BZNE. Cocrystal Discovery’s chairman and CEO Dr. Gary Wilcox will retain his positions at the new entity, as will chief scientist Dr. Roger Kornberg. Cocrystal Discovery is working on therapeutics for hepatitis C, influenza, human rhinovirus, dengue fever, and norovirus. Its HCV program consists of two hepatitis C replication enzyme targets--polymerase (in lead optimization) and helicase (lead identification). The company counts Teva Pharmaceutical, Opko Health, and the Frost Group as its investors; Opko and Frost own a combined 40%. Biozone and its subsidiaries develop and manufacture over-the-counter, cosmetic, and beauty products such as shampoos and conditioners for eczema and psoriasis; external analgesics; antifungals; topical anesthetics; nasal sprays; wound care products; cough and cold medicines; and dietary supplements and vitamins. It has two skin care lines--Glyderm and Baker Cummins--and sells raw materials containing its QuSomes delivery agents. For FYE 2012, Biozone had $17.2mm in sales with a loss of $8mm. As of September 30, 2013 it had $530k in cash on hand.

Forest Laboratories Inc.

Aptalis Holdings Inc.

Less than two weeks after filing an S-1 to go public, private spec pharma Aptalis Holdings Inc. scrapped those plans and instead agreed to be acquired by Forest Laboratories Inc. for $2.9bn in cash. (Jan.)

Aptalis was founded in 1982 as Axcan Pharma, which completed an IPO in 1995 but was bought out by private equity firm TPG Capital in 2007 for $1.3bn and has been private ever since. (TPG had reportedly been trying to divest Aptalis since mid-2013, but couldn’t find a buyer and so was pursuing an IPO.) Over the years Aptalis has sold drugs (obtained primarily via in-licensing or acquisition) for a number of conditions, but presently focuses on GI diseases and cystic fibrosis (CF), using a 227-person sales force. With $145mm in net sales for FYE September 30, 2013, duodenal ulcer treatment Carafate (sucralfate) is Aptalis’ leading product (US rights were licensed from Aventis in 2003). Aptalis markets several other GI drugs, which should augment Forest’s one-product portfolio in this area, constipation remedy Linzess (licensed from Ironwood Pharmaceuticals). In the CF space, Aptalis leads with Zenpep (pancrelipase), a pancreatic enzyme (gained through the 2010 takeover of Eurand) for exocrine pancreatic insufficiency due to CF, which made $141mm in 2013 sales. In the pipeline, lead candidate APT1026 recently completed an EU Phase III study in chronic lung infection with Pseudomonas aeruginosa in CF. Formerly known as Aeroquin, APT1026 is an aerosolized version of the broad-spectrum antibiotic levofloxacin, acquired from Mpex Pharmaceuticals in 2011. If Forest gets approval for APT1026, it would have a second product in this indication next to Colobreathe, which the company launched in the EU in April 2013. In addition to its marketed products, Aptalis also has third-party business-to-business agreements in which it uses oral delivery technologies to formulate biopharmaceuticals. For FYE September 30, 2013, Aptalis achieved $687.9mm in revenue and $86.9mm in net income. On September 30, 2013, it had $230mm cash on hand. Investment Banks/Advisors: Morgan Stanley & Co. (Forest Laboratories Inc.); JP Morgan & Co. (Aptalis Holdings Inc.)

Ikaria Inc.

Backers of Ikaria Inc. (cardiovascular, renal, and respiratory therapeutics) have split the company into two independent entities that will continue ties due to shared investors and services. (Dec.)

PE firm Madison Dearborn Partners bought the critical care marketed products along with the commercial infrastructure of Ikaria for $1.6bn in cash from the company’s backers--New Mountain Group (lead), Arch Venture Partners, Venrock, 5AM Ventures, and the Linde Group. Those shareholders have reinvested the money for a 45% stake in the company, which will retain the Ikaria name. Formed in 2007 by a $670mm merger with INO Therapeutics, Ikaria’s main product is INOmax (inhaled nitric oxide), which is the only FDA-approved drug for hypoxic respiratory failure that accompanies pulmonary hypertension (PH) in full-term and near-term newborns. Phase III Lucassin (terlipressin), which was licensed from Orphan Medical (now part of Jazz) in 2008 for heptorenal syndrome, will remain with Ikaria. Concurrently, Ikaria shareholders also put $80mm into an unnamed research-based company that will be spun off from Ikaria (and may be prepped for an IPO) to develop the company’s pipeline, including IK7001 (nitric oxide for inhalation) for pulmonary arterial hypertension and IK7002 for PH secondary to chronic obstructive pulmonary disease (both from the INO Therapeutics transaction), and IK5001, a bioabsorbable cardiac polymer matrix for left ventricular remodeling and congestive heart failure post-acute myocardial infarction (in-licensed from BioLineRx in 2009). The funding should be enough to reach human proof-of-concept for the programs. Ikaria had planned a 2010 IPO which, right before it was pulled due to market conditions, would have valued the company at about $104mm. Investment Banks/Advisors: Credit Suisse Group; Morgan Stanley & Co.

Innovus Pharmaceuticals Inc.

Semprae Laboratories Inc.

Innovus Pharmaceuticals Inc. (male sexual health products) acquired closely held female sexual health company Semprae Laboratories Inc. in a stock swap. Semprae shareholders received 3.2mm common shares--worth $960k--or about 15% of Innovus. (Dec.)

Semprae investors will also get annual cash royalty payments equal to 5% of net sales of Zestra, Zestra Glide, or any second-generation therapeutic until a generic equivalent is available. Innovus will also pay back Semprae’s $344k loan to the NJ Economic Development Administration. Semprae was formed in 2008 to purchase assets from the now-bankrupt Zestra Laboratories for $2.5mm. Semprae’s 2010 Series A brought in $3.1mm. Semprae markets Zestra--which it says is the first non-prescription drug made from botanical oils and extracts to increase arousal, sensation, and pleasure during intercourse for women suffering from female sexual arousal disorder--and Zestra Glide, a water-based lubricant. The two products, which had 2013 sales of $1mm combined, are patent protected beyond 2021. Innovus has two complementary products for men--EjectDelay for premature ejaculation and CIRCUMserum to increase penile sensitivity. The purchase of Semprae will give Innovus the retail infrastructure to distribute the rest of its OTC products in the US.

Intrexon Corp.

MediStem Inc.

Intrexon Corp. (biological enabling platforms) acquired publicly traded regenerative medicine company MediStem Inc., which specializes in endometrial regenerative cells (ERCs), for $19.5mm in cash and stock (in the event of a share split, the deal value is not to exceed $26mm). For each of Medistem’s 14.4mm outstanding shares, stockholders received $0.27 in cash and $1.08 of an Intrexon share (approximately 0.54 of a share), equating to a 39% premium. (Dec.)

Intrexon plans to engineer multipotent ERC therapeutics using its synthetic biology technologies (the UltraVector operating system, proprietary Cell Systems Informatics for evaluating gene targets and pathways, and RheoSwitch Therapeutic System for gene expression regulation). Some applications include modifying the genetic material within the cells to improve therapeutic effect, and delivering secreted proteins. In addition, Intrexon may design ERCs to generate exosomes, which will act as delivery vehicles for miRNAs and proteins. Medistem’s ERCs, derived from menstrual blood, are universal donor adult stem cells that stimulate new blood vessel formation, reduce inflammation, regulate immune system function, and augment tissue repair and healing. They are able to differentiate into many other types including heart, bone, muscle, blood vessel, lung, brain, liver, cartilage, fat, pancreatic, and islet cells. Resulting candidates may treat various diseases including cancer, liver and kidney failure, and diabetes. The company’s most advanced program is in Phase II for congestive heart failure; in addition, ERC124 is in Phase I for critical limb ischemia, and Medistem expects to file an IND for a Type I diabetes cell treatment. In May 2010, Entest Biomedical signed a letter of intent to acquire the majority (61%) of Medistem, hoping to integrate Medistem’s ERCs into Entest’s COPD therapeutic. While the transaction didn’t go through, Medistem still maintains a licensing agreement with Entest in the veterinary field. Medistem, which was founded in 2005, became a fully reporting company with shares listed on the OTCQB in November 2013. At the end of Q3 2013, it recorded a $267k net loss and had $511k cash on hand. The Medistem acquisition is Intrexon’s third stem cell deal in 2013. In October, Intrexon agreed to work with Mesoblast and Ziopharm on Mesoblast’s mesenchymal lineage cells in oncology. And at the beginning of the year, Intrexon gained commercial and IP rights resulting from a collaboration with Sanford Burnham Prebys Medical Discovery Institute in human induced pluripotent stem cell research.

Jazz Pharmaceuticals PLC

Gentium SPA

Spec pharma Jazz Pharmaceuticals PLC acquired public Italian biotech Gentium SPA, paying $57 per share (a 4% premium) to value the deal at $887mm. (Dec.)

Gentium spun off from Crinos Industria Farmacobiologica SPA as Pharma Research SRL in 1993 to focus on naturally derived drug candidates for coagulation and thrombotic disorders. Based on its research, Gentium (which became the name in 2001) honed in on the discovery of defibrotide, a complex mixture of oligonucleotides (derived from porcine mucosal DNA). Since then, the biotech has focused on the development of defibrotide, which the EU approved this past October (as Defitelio) for the treatment of severe hepatic veno-occlusive disease (VOD), believed to be caused by harm to the hepatic venous endothelium due to chemotherapy or radiation exposure during hematopoietic stem cell transplant. Launch is expected in Q1 2014; the drug has orphan status in the EU and US. Gentium has various regional partners for defibrotide, including Biologix FZCo. (Middle East and North Africa), Valeant’s PharmaSwiss (Eastern Europe), and Sigma-Tau Pharmaceuticals (North and South America). Defibrotide also has potential in additional indications including VOD and acute graft vs. host disease prevention, and multiple myeloma. Besides defibrotide, Gentium supplies certain products (sulglicotide for ulcers and other GI indications; urokinase for thromboembolic disorders; and heparin) to international pharma companies. Gentium reported 2012 net income of $992k on $37.2mm in sales. Defitelio joins Jazz’s oncology/hematology portfolio alongside fellow orphan product Erwinase (for acute lymphoblastic leukemia), which the company gained in its 2012 acquisition of EUSA Pharma. Jazz anticipates using its specialty sales force to promote both products in the EU. Investment Banks/Advisors: Jefferies & Co. Inc. (Gentium SPA); Barclays Bank PLC (Jazz Pharmaceuticals PLC)

Par Pharmaceutical Cos. Inc.

JHP Pharmaceuticals LLC

Just one year after its acquisition of JHP Pharmaceuticals LLC for $195mm, Warburg Pincus is selling off the private spec pharma (and parent company JHP Group Holdings LLC) to generics group Par Pharmaceutical for $490mm in cash. Par secured $505mm in debt financing to fund the transaction and related expenses. (Jan.)

The deal is expected to close by the end of 1Q 2014, at which time JHP will become a wholly owned Par division. According to industry sources, Warburg Pincus took a $100mm dividend from JHP shortly before its divestiture, for a total return of three times its December 2012 purchase price. JHP manufactures and sells branded and generic sterile injectable drugs to acute care providers, a growing market into which Par, a specialist in high barrier-to-entry generics, is eager to expand. It also performs contract manufacturing services for biopharma companies, producing sterile injectables which require liquid, lyophilized, or suspension formulations. JHP’s 14 branded specialty products span several therapeutic areas including anesthesiology, endocrinology, gastroenterology, infectious disease, neurology, and women’s health. Among them are the anesthetic Brevital; Pitocin, for inducing uterine contractions during labor; and Adrenalin for emergency treatment of allergic reactions. Its generic injectables are in gastroenterology, infectious disease, oncology, and women’s health and include the antiemetic trimethobenzamide hydrochloride, the sterile parenteral antibiotic product colistimethate, and the bone resorption inhibitor zoledronic acid. JHP has another 34 products in its pipeline, 17 of which are awaiting FDA approval. The company was formed in 2007 with biologics contract manufacturing assets and other product lines acquired from King Pharmaceuticals (which has since been bought by Pfizer), including Pitocin, the Coly-Mycin antibiotics line, and tuberculosis diagnostic Aplisol. In 2012 Par was bought and taken private by TPG Capital for $2bn. Investment Banks/Advisors: JP Morgan & Co. (JHP Pharmaceuticals LLC)

Shenzhen Hepalink Pharmaceutical Co. Ltd.

Scientific Protein Laboratories LLC

For $337.5mm up front, leading Chinese heparin supplier Shenzhen Hepalink Pharmaceutical Co. Ltd., via its Hepalink USA subsidiary, acquired privately held API manufacturer Scientific Protein Laboratories LLC (SPL), which is also entitled to earn-outs. (Dec.)

With customers in the pharma, veterinary, and food industries, SPL provides APIs used in finished-dose forms. The company offers custom process development and manufacturing services, including natural products extraction (from animals and plants), fermentation, and purification. SPL is one of the largest producers of heparin for anticoagulant manufacturing, and should boost Hepalink’s established worldwide position in the processed heparin supply market. (Although in 2008, SPL was embroiled in controversy when batches of heparin the company had supplied from its Chinese plant were found to be contaminated, causing widespread adverse reactions and several deaths in multiple US hospitals, triggering a huge recall.) Hepalink says the addition of SPL’s capabilities will allow it to establish a global heparin API manufacturing, R&D, and distribution network. SPL’s other core heparin products include glycosaminoglycans and low molecular weight heparin; the company also supplies the pancreatic enzymes pancreatin and pancrelipase. SPL was founded in 1976 as part of Oscar Mayer; in 1983 it was acquired by drug company AH Robbins, which in 1998 merged into American Home Products (AHP was renamed Wyeth, which Pfizer bought in 2009). Wyeth sold SPL to private equity firm Arsenal Capital Partners in February 2004 for $81mm; two years later, American Capital, an investment fund, bought out the majority stake of SPL, which has been operating privately since.

Teva Pharmaceutical Industries Ltd.

NuPathe Inc.

To strengthen its branded CNS portfolio, Teva Pharmaceutical Industries Ltd. submitted a $3.65-per-share unsolicited bid (a 62% premium) to buy public spec pharma NuPathe Inc. for $114mm. Teva’s offer represents a 28% increase over Endo International PLC’s $2.85-per-share price announced in mid-December 2013. NuPathe’s board believes that Teva’s offer will lead to a superior proposal but has not made that determination yet, and still recommends that stockholders tender shares to Endo. (Jan.)

Teva would also pay up to $3.15 per share in earn-outs tied to revenues of NuPathe’s FDA-approved migraine patch Zecuity. If Zecuity reaches $100mm during any four consecutive calendar quarters on or before the sixtieth day following the ninth anniversary of first commercial sale, NuPathe would get $0.85 per share; the price goes up to $1.00 and $1.30 under the same conditions for sales of $300mm and $450mm, respectively. Should Teva succeed in acquiring NuPathe, the Israeli company would get its hands on Zecuity, a transdermal formulation of the migraine drug sumatriptan that’s delivered via iontophoresis (a mild electrical current--via the SmartRelief platform). In May 2013, Teva and NuPathe discussed a co-promotion deal for Zecuity; the companies spoke again in October 2013, but an alliance never materialized. Teva already sells a handful of neurology products, led by MS treatment Copaxone, which achieved $4bn in total 2012 sales. But in the US, where 72% of the drug’s sales are realized, Copaxone could face generic competition from at least two companies (Mylan and Sandoz International GMBH) starting in June 2014 at the earliest. Beyond Zecuity, NuPathe is testing extended-release implants in preclinical for Parkinson’s disease (NP201; ropinirole) and schizophrenia/bipolar disorder (NP202; risperidone). The company licensed the technology behind these candidates from the University of Pennsylvania. NuPathe was founded in 2005. In 2012 the company had no revenues and suffered a $24.5mm loss. It had $10.3mm in cash on hand at the end of Q3 2013. UPDATE January 2014: NuPathe terminated the agreement with Endo, allowing the transaction with Teva to proceed. Teva loaned NuPathe $5mm, which will cover the termination fee to Endo. The up-front $3.65/share price stayed the same, valuing the deal at $123mm, based on 33.4mm outstanding NuPathe shares. The sales thresholds on the contingent payments regarding Zecuity changed: NuPathe would receive $2.15 per share if net sales of $100mm are reached in any four consecutive quarters on or prior to the ninth anniversary of Zecuity’s first commercial sale; and $1.00 under the same terms if Zecuity net sales are at least $300mm. Investment Banks/Advisors: MTS Health Partners (NuPathe Inc.)

Alliances

ACT Biotech Inc.

Eddingpharm International Holdings Ltd.

Eddingpharm International Holdings Ltd. (cancer, infectious, and respiratory therapies) took exclusive global rights to the three oncology projects (and additional molecules) of ACT Biotech Inc. Following the transaction, ACT Biotech will not have any compounds in its pipeline. (Jan.)

Including an undisclosed up-front payment and milestones (clinical, regulatory, and sales), Eddingpharm could pay up to $95mm for the assets. Lead telatinib is a vascular endothelial growth factor receptor (VEGFR) inhibitor entering Phase III trials in the US for gastric cancer. Eddingpharm plans to conduct those studies in the US, and also initiate trials in the company’s home country of China. Also included in the deal are ACTB1003, a fibroblast growth factor receptor/VEGFR2 inhibitor, and ACTB1010, an aurora kinase inhibitor, both in preclinical studies for various cancers. Eddingpharm will test the early-stage candidates in either the US or China. Bayer HealthCare originated the compounds and out-licensed them to ACT in 2008. The deal is the first global alliance for Eddingpharm, and the first of 2014 after a very busy 2013. Last year the company licensed rights in China and other Asian countries to Immutep's metastatic breast cancer therapy ImmuFact IMP321; Ablynx's ALX0141 for all indications including bone metastases and osteoporosis; and Syndax's entinostat for breast and non-small cell lung cancers. Eddingpharm also gained its first Big Pharma partner during 2013, licensing exclusive rights to sell GSK's advanced/metastatic breast cancer treatment Tykerb (lapatinib) in China.

ActoGenix NV

Stallergenes SA

ActoGeniX NV (drug delivery) will use its ActoBiotics mucosal delivery technology to produce allergy compounds for Stallergenes SA (immunotherapeutics). (Dec.)

ActoBiotics are genetically engineered lactic acid bacteria that express and secrete recombinant allergens, and can be applied to therapeutic peptides and proteins. ActoGeniX says resulting drugs are safer and more effective and can be used at lower doses than injectables. The company will deliver clinical drug candidates that express predetermined allergens. Once proof-of-concept is completed, Stallergenes may exercise its option for exclusive global development and marketing rights to the compounds. ActoGeniX will receive money up front as well as preclinical, clinical, regulatory, and commercialization milestones that may reach €75mm ($102.9mm) per allergen. ActoGeniX is also entitled to sales royalties.

Aerial BioPharma LLC

Jazz Pharmaceuticals PLC

For $125mm in cash up front, Jazz Pharmaceuticals PLC (spec pharma focused on cancer, blood diseases, and neurology) received worldwide development, manufacturing, and marketing rights outside of Asia to start-up Aerial BioPharma LLC’s Phase IIb ADXN05 (formerly SKLN05, ARLN05), a phenylalanine derivative with US orphan drug designation for excessive daytime sleepiness associated with narcolepsy. (Jan.)

SK Life Science (part of SK Biopharmaceuticals) originally developed ADXN05, and in 2009 granted Addrenex Pharmaceuticals global rights outside of East Asia. Under the current deal, SK still retains those Asian rights (specifically in Korea, Japan, China, Taiwan, Singapore, Indonesia, India, the Philippines, Thailand, Malaysia, Vietnam, and Hong Kong), and along with Aerial is entitled to $272mm in development, regulatory, and sales milestones, plus royalties ranging from the high single-digits to mid-teens (Strategic Transactions assumes 8-15%). Later in 2009, Shionogi’s Sciele division (now Shionogi Inc.) acquired Addrenex, whose former executives founded Aerial in 2011 to continue work on ADXN05. Following Aerial’s announcement in October 2013 of positive Phase IIb results in a larger patient population and longer duration of treatment period, the company said it would be seeking a partner for ADXN05 to take the candidate to market. In the trials, ADXN05 displayed a different mechanism of action than Teva’s Provigil (modafinil) and other standard stimulants, such as amphetamines, typically used for narcolepsy; while ADXN05’s exact mechanism is unknown, it is believed to interact with dopamine and adrenergic receptors. Jazz is also planning to test ADXN05 in obstructive sleep apnea; Phase III trials are planned for this year. The company appears to be filling its pipeline with next-generation narcolepsy treatments in advance of generic competition to Xyrem (sodium oxybate), its marketed product in this indication. (Xyrem was Jazz’s largest drug in 2012, achieving $378.7mm, or 65% of all product sales.) Less than a year ago, the company received exclusive global rights to Concert Pharmaceuticals’ C10323 (later renamed JZP386) for narcolepsy. This preclinical version of a sodium oxybate analog contains deuterium, a heavier and stable isotope of hydrogen that is believed to improved ADME properties of compounds. Investment Banks/Advisors: Piper Jaffray & Co. (Aerial BioPharma LLC)

Agilis Biotherapeutics LLC

Intrexon Corp.

Fellow synthetic biology companies Agilis Biotherapeutics LLC and Intrexon Corp. formed an exclusive channel collaboration to develop DNA and genetically modified cell therapeutics for Friedreich’s ataxia (FRDA). Agilis has the option to add another genetic disease target to their deal. (Dec.)

Agilis, which was founded in 2013, received access to Intrexon’s UltraVector and RheoSwitch Therapeutic System enabling platforms to aid in engineering the therapeutics; UltraVector is a multi-gene operating system that possesses design, building, and testing functionality, while RheoSwitch is an inducible gene switch (activated by a small-molecule ligand) that regulates timing and concentration of protein and RNA expression (RheoSwitch is integrated within UltraVector). In addition, Agilis may exclusively use Intrexon’s DNA components libraries; end-to-end therapeutic design, optimization, and production tools; scientific expertise; and laboratories. FRDA is a neurodegenerative and movement disorder caused by a mutation in the FXN gene encoding frataxin, a mitochondrial protein involved in iron sulfur cluster assembly. The disease leads to neurological deterioration and potentially premature death due to heart failure. Agilis and Intrexon’s DNA therapy will replace the mutant FXN gene, which causes limited frataxin production, with a copy that works to boost expression of the deficient protein. The Agilis alliance is Intrexon’s seventh in the biotech space in 2013, a busy year for the biotech which also completed an IPO recently and just announced it was acquiring endometrial regenerative cell company Medistem for $26mm.

Alexion Pharmaceuticals Inc.

Moderna Therapeutics Inc.

In its second major deal in less than a year, start-up Moderna Therapeutics LLC licensed Alexion Pharmaceuticals Inc. (ultra-rare disorders) ten exclusive worldwide options to messenger RNA Therapeutics for rare diseases. (Jan.)

In the long-term alliance, Moderna receives $125mm up front, of which $100mm is cash and the rest a preferred equity investment by Alexion. Upon option exercise, Moderna would get development and sales milestones plus high single-to-double-digit royalties (Strategic Transactions assumes 8-99%). Alexion will lead discovery, development, and commercialization of drugs, while Moderna will design and manufacture the messenger RNA Therapeutics, which are assembled with proprietary naturally occurring nucleotide analogues that avoid innate immune responses. The resulting molecule triggers the body’s natural processes to produce intracellular, transmembrane, and secreted proteins in vivo. The secreted proteins are released into the bloodstream and may be taken up by cells to restore function in different tissues and organs. Moderna, which recently closed on a $110mm Series B round, plans to deliver the first programs to Alexion within weeks. Moderna also nabbed a huge up-front, $240mm, for its messenger RNA Therapeutics deal with AstraZeneca last year. In their five-year option-based tie-up, Moderna may license up to 40 cardiometabolic, renal, and cancer compounds. In addition to messenger RNA Therapeutics, Alexion is also testing synthetic small-molecule macrocycles as an approach to tackling rare diseases. In a 2013 drug discovery deal with Ensemble Therapeutics, the partners are screening Ensemblins against targets chosen by Alexion. While the diseases in the Moderna or Ensemble deals haven’t been disclosed, some of the indications Alexion is current working on in its pipeline include hypophosphatasia, severe and relapsing neuromyelitis optica, and severe myasthenia gravis.

Alnylam Pharmaceuticals Inc.

Sanofi

Genzyme Corp.

Vastly expanding on and replacing a 2012 alliance surrounding RNAi therapies for transthyretin-mediated amyloidosis (ATTR), Alnylam Pharmaceuticals Inc. and Sanofi’s Genzyme Corp. signed a new agreement for the development of RNAi treatments for genetic diseases. Genzyme gains additional rights and becomes a major Alnylam shareholder. (Jan.)

Under terms of the original partnership, Genzyme paid $22.5mm up front for rights to Alnylam’s Phase II ATTR candidate ALNTTR02 (patisiran) and the preclinical subcutaneous version ALNTTRsc in Japan and other Asia-Pacific countries. In the new deal, Genzyme made an up-front equity investment of $700mm in Alnylam (8.8mm common shares at $79.85, a 25% premium, for a 12% stake), and licensed additional rights to Alnylam’s pipeline. Genzyme gets exclusive worldwide options (excluding North America and Western Europe, where Alnylam retains rights) to all of the RNAi candidates that belong to Alnylam’s 5x15 initiative plus future genetic disease medicines. The rights cover compounds that reach human proof-of-principle (POP) by the end of 2019 (or the end of 2021, under certain circumstances), and options are automatically triggered once POP is achieved. Projects carried over and expanded upon from the original agreement include Genzyme’s option for rights to patisiran (now in Phase III for TTR-mediated amyloidosis in patients with familial amyloidotic polyneuropathy), which expands to include all territories outside of North America and Western Europe; and ALNTTRsc, now in Phase II for familial amyloid cardiomyopathy. The partners will co-develop and co-promote the latter in North America and Western Europe, with Genzyme getting exclusive rights in the rest of the world. Genzyme opted in to its patisiran rights concurrent with the signing of the deal. For two specific candidates from the 5x15 pool, Genzyme may choose its rights: the company can either elect to co-develop and co-promote in North America and Western Europe ALNAT3, for hemophilia and other rare bleeding diseases, with Alnylam retaining development and commercialization control; or it can license global rights to ALNAS1 for hepatic porphyrias. (Genzyme will make its selection following completion of POP studies.) Lastly, Genzyme holds an option (until the end of 2019) to develop and sell outside of North America and Western Europe one of Alnylam’s rare genetic disease compounds that is not a 5x15 project. In total, Genzyme now has access to six Alnylam candidates (five from the 5x15 initiative, and one potential extra). Development, regulatory, and sales milestones are as follows: for each regional (including patisiran) and co-developed/co-commercialized compound (including ALNTTRsc), Genzyme could pay up to $75mm, while it is responsible for up to $200mm in total milestones for each global compound, and tiered double-digit royalties up to 20% for all products. Once Genzyme exercises an option, the partners will share development costs. For regional programs, Genzyme covers 20% of the expenses; all co-developed/co-promoted projects are split 50/50; and wherever Genzyme holds global rights, it pays 100% of the costs. In terms of profits, co-developed/co-promoted products will result in an equal profit split, with Alnylam booking sales for North America and Western Europe. In addition to the above details, the partners agreed to separately discuss a possible deal surrounding delivery of small-interfering RNA (siRNA) therapeutics for CNS disorders.

Amgen Inc.

Carmot Therapeutics Inc.

Drug discovery firm Carmot Therapeutics Inc. agreed to use its Chemotype Evolution platform to discover drug leads for two of Amgen Inc.’s targets. (Jan.)

Amgen will provide money up front, research funding, and preclinical and clinical milestones. Carmot is also eligible for royalties on resulting products. Carmot differentiates Chemotype Evolution from high-throughput screening by offering more targeted and diverse hits. Unlike high-throughput screening, Carmot’s platform synthesizes and evaluates each compound individually. The company has used its technology to discover drug candidates that target the pathways involved in metabolic diseases, cancer, and inflammation. The transaction with Amgen is Carmot’s first publicly announced pharmaceutical alliance.

ANI Pharmaceuticals Inc.

Teva Pharmaceutical Industries Ltd.

ANI Pharmaceuticals Inc. (prescription women’s health products; generics; and contract manufacturing) acquired 31 generics from Teva Pharmaceutical Industries Ltd. for $12.5mm up front in two installments: $8mm five business days following the date the deal comes into effect and upon execution of a bill of sale for the transfer of the initial assets, and $4.5mm within 90 days regarding a second bill of sale for the remaining assets. Teva will also receive sales royalties. (Dec.)

The deal greatly expands ANI’s portfolio, which currently only contains seven products including generic metoclopramide (Reglan; for GI disorders) and the antidepressant fluvoxamine (Luvox). The transaction includes 20 solid-oral immediate-release, four extended-release, and seven liquid generics that were on the market at one time. ANI will soon start manufacturing the drugs in its facilities and plans to re-introduce the products in Q4 2014. ANI and Teva already have a connection through BioSante, which reverse merged with ANI in October 2012. That same month, BioSante and Teva amended their 2003 alliance covering the approved male testosterone gel Bio-T-Gel, to which Teva holds US rights but has yet to launch. (Teva had been involved in litigation with Abbott/AbbVie, which markets AndroGel and claimed patent infringement, but their dispute was settled.)

Apeiron Biologics AG

Gen Ilac ve Saglik Urunleri

Medison Pharma Ltd.

Austrian oncology company Apeiron Biologics AG out-licensed its high-risk pediatric neuroblastoma candidate APN311 to two international specialty pharmas. Medison Pharma Ltd. gets exclusive rights to market the therapy in Israel, while Gen Ilac ve Saglik Urunleri will exclusively sell it in Turkey. (Jan.)

APN311 is a monoclonal chimeric antibody produced in Chinese hamster ovary cells, and targets the GD2 antigen on neuroblastoma cells. Apeiron first gained rights to the compound in June 2011 from the Children’s Cancer Research Institute and the International Society of Paediatric Oncology European Neuroblastoma (SIOPEN). Apeiron has advanced the therapy into Phase III trials in a SIPOEN-based study. Out-licensing rights for Turkey and Israel continues Apeiron’s push to find global partners. In January 2013, Paladin Labs licensed exclusive rights for Canada and Sub-Saharan Africa (including South Africa). Both Medison and Gen Ilac already have cancer products in their portfolios. Gen Ilac focuses on hemo-oncology, while Medison offers therapies for breast and colon cancer, chemotherapy-related anemia, and personalized cancer diagnostics.

Astellas Pharma Inc.

Mymetics Corp.

RSV Corp.

Newly created RSV Corp. (RSVC) received exclusive worldwide rights to infectious disease vaccine developer Mymetics Corp.’s preclinical respiratory syncytial virus (RSV) vaccine. (Jan.)

Mymetics gets $5mm up front, up to $77mm in post-proof-of-concept milestones, stepped double-digit sales royalties, and other undisclosed payments. Astellas Pharma Inc. formed RSVC in December 2013 with the help of ClearPath Development Co., a firm focused on providing biopharmas a way to advance in-house or in-licensed assets. (Astellas, in partnership with ClearPath, recently announced plans to create a portfolio of firms dedicated to developing infectious disease vaccines--RSV is its first.) Using its virosome technology, Mymetics created a vaccine containing membrane nanoparticles with the native key viral surface proteins that are targets of the immune system, but lack the genetic material that causes infection. In animal models, the vaccine demonstrated strong immune responses and protection against RSV. Mymetics will continue handling preclinical studies and is responsible for formulation and manufacturing. RSVC, led by its head of development, vaccine expert George Siber, MD, will collaborate on human studies. Astellas will fund RSVC's work through completion of a Phase IIb trial, at which point it may opt to receive exclusive development and commercialization rights to the compound or even acquire RSVC outright (under terms of its arrangement with ClearPath).

AstraZeneca PLC

Probiodrug AG

Further strengthening its oncology and inflammatory disease pipeline, AstraZeneca PLC acquired an early-stage cyclin-dependent kinase 9 (CDK9) inhibitor program from Probiodrug AG (developing therapies for Alzheimer’s disease). (Jan.)

CDK9 is implicated in the regulation of genes involved in cell proliferation and inflammation. Probiodrug had been studying the inhibitors for the treatment of pain and inflammatory pain, but decided to divest a lead molecule, back-up compounds, and related intellectual property to AZ to study in cancer and inflammation. Probiodrug can now focus solely on treatments for AD. As AstraZeneca's first deal of 2014, the alliance continues the Big Pharma’s push throughout 2013 to make oncology a key development priority (along with cardiovascular/metabolic diseases, and respiratory diseases/inflammation). According to Strategic Transactions, AZ and its MedImmune division gained new cancer assets through at least ten partnerships or acquisitions during 2013, to the tune of about $780mm in total up-front payments.

Avillion LLP

Pfizer Inc.

Pfizer Inc. signed on Avillion LLP (helps pharmacos develop late-stage compounds) to perform a Phase III trial of its Bosulif (bosutinib) kinase inhibitor for chronic phase Philadelphia chromosome positive (Ph+) chronic myelogenous leukemia (CML). (Jan.)

Avillion will provide funding for the trial, to take place in the US, Asia, and Europe, and will generate data required for registering the drug for marketing authorization as a first-line 400mg daily treatment for Ph+ CML. If approved, Pfizer pays Avillion milestones and retains global commercial rights. Bosulif is currently sold in the US for patients with resistance or intolerance to prior therapy. In Europe it has conditional marketing authorization in patients previously treated with one or more tyrosine kinase inhibitors and for whom imatinib, nilotinib, and dasatinib are not treatment options.

Bayer AG

Bayer Consumer Care

Moberg Pharma AB

Moberg Pharma North America LLC

Following a portfolio review, Bayer HealthCare LLC’s Bayer Consumer Care divested three OTC products--Domeboro (aluminum and calcium), Vanquish (aspirin, acetaminophen, and caffeine), and Fergon (iron)--to Swedish drug company Moberg Pharma AB for SEK32mm ($4.8mm). (Dec.)

The products are sold in the US, where Moberg will continue to offer them in chain drugstores and mass merchandisers. The company strengthened its position in the US OTC market through the October 2012 acquisition of OTC firm Alterna (now called Moberg Pharma North America), which will distribute the newly acquired drugs. Domeboro is a topical skin astringent for itching and minor irritations due to poison ivy, oak, or sumac; insect bites; athlete’s foot; and rashes. Moberg has an established dermatology portfolio including the antifungal (onychomycosis) nail solution Emtrix/Nalox and the Kerasal line of foot creams (through the Alterna takeover). Used to alleviate headaches, Vanquish complements Moberg’s JointFlex for muscle and joint pain (also from Alterna) and the Kerasal foot pain reliever. Fergon is a high-potency iron supplement. Bayer says the current transaction allows it to focus on core brands including Bayer Aspirin and Aleve, and for global expansion, especially in the emerging markets of Latin America, Eastern Europe, and Asia.

Bioceros

BiocerOX Products BV

Johnson & Johnson

Janssen Pharmaceuticals Inc.

Bioceros Holding BV affiliate BiocerOX Products BV (monoclonal antibodies) granted Johnson & Johnson’s Janssen Pharmaceuticals Inc. exclusive global rights to develop a mAb aimed at an immune checkpoint modulator for cancer. (Jan.)

The arrangement was facilitated through J&J’s London Innovation Centre. BiocerOX Products gets money up front and milestones. Although the drug candidate was not disclosed, J&J indicated it would target tumors at all stages. Bioceros uses its CHOBC technology to create cell lines that produce biosimilar mAbs. Its focus is on cancer and immune conditions.

Biogen Idec Inc.

Sangamo BioSciences Inc.

Sangamo BioSciences Inc. (therapeutic DNA-binding proteins) licensed Biogen Inc. exclusive worldwide rights to develop and commercialize treatments for sickle cell disease (SCD) and beta-thalassemia. Biogen also received an exclusive, royalty-bearing license--with the right to sublicense--to Sangamo’s zinc finger nuclease (ZFN) technology platform, plus a nonexclusive, worldwide, royalty-free license--and sublicensing rights--to certain other IP developed under the agreement. (Jan.)

Biogen will pay $20mm up front and reimburse Sangamo for any internal and external R&D related to the licensed programs. Biogen could also shell out $293.8mm in development, regulatory, commercialization, and sales milestones, plus double-digit sales royalties. (Initiation of Phase I for each program triggers a $7.5mm payment.) Sangamo will handle development through the first clinical proof-of-concept trial in beta-thalassemia (it plans to file an IND this year), and both parties are responsible for activities necessary to submit an IND in the SCD indication. To oversee the projects, Sangamo and Biogen formed a joint steering committee, which will have an equal number of representatives from each firm. Biogen gets global development, commercialization, and manufacturing rights to the resulting products, however Sangamo keeps an option to co-promote in the US. SCD and beta-thalassemia are hemoglobinopathies, which are inherited conditions caused by the abnormal structure or underproduction of hemoglobin. Sangamo’s ZFN genome-editing technology can precisely target and knock out key regulators of gene expression or insert a new corrective gene to replace the defective one, offering a novel one-time cure for both diseases. Current treatments for SCD and beta-thalassemia are bone-marrow transplant, blood transfusion, iron chelation, hydroxyurea therapy, pain medications, and antibiotics. If successfully developed, Sangamo/Biogen’s stem cell transplant therapies would not only be curative, but eliminate the risk of graft-versus-host disease through gene editing of hematopoietic stem cells harvested from and re-implanted into the patient. Concurrent with the Sangamo deal, Biogen licensed Sunesis Pharmaceuticals Inc. worldwide rights to its preclinical Bruton's tyrosine kinase (BTK) inhibitor SNS062 for blood cancer.

Biogen Idec Inc.

Sunesis Pharmaceuticals Inc.

To expand its hematology business, cancer-focused Sunesis Pharmaceuticals Inc. received exclusive worldwide rights to Biogen Inc.’s preclinical Bruton's tyrosine kinase (BTK) inhibitor SNS062. (Jan.)

Because of its unique mechanism of action, SNS062 is a differentiated treatment for B-cell malignancies and other blood cancers and may work in cases where agents such as ibrutinib and idelalisib have failed. Sunesis plans to file an IND in twelve months. The company concurrently licensed from Takeda Oncology a preclinical phosphoinositide-dependent kinase-1 (PDK1) inhibitor with potential in hematologic and solid tumor malignancies. Both compounds were originated by Biogen and Sunesis; SNS062 came from an early-2003 tie-up, and PDK1 was developed under a September 2004 deal that ended in 2011 because Biogen wanted to divest oncology assets to focus on neurology. Sunesis then partnered with Millennium to work on the candidate. Sunesis’ hematology pipeline is led by Phase III vosaroxin for refractory acute myeloid leukemia.

BioLineRx Ltd.

JHL Biotech Inc.

Just three months after receiving exclusive worldwide rights to BL9020, BioLineRx Ltd. signed on Taiwanese start-up JHL Biotech Inc. to help develop the preclinical monoclonal antibody for Type I diabetes. (Jan.)

BioLineRx will complete preclinical studies. Once BL9020 reaches the clinic, JHL has development and commercialization rights in China and Southeast Asia, while BioLineRx retains rights in the rest of the world. JHL will follow FDA guidelines and regulations and is responsible for all process development and global manufacturing. Both firms will have access to any development and regulatory data resulting from the agreement. BioLineRx and JHL receive single-digit royalties on the sale of BL9020 in the other party's respective territories. BL9020 (formerly EDP10) was discovered by Hebrew University’s Yissum Research Development Co. Ltd., Ben-Gurion University of the Negev’s BG Negev Technologies & Applications Ltd., and Hadassah Medical Organization’s Hadasit Ltd.. Researchers found that the receptor NKp46 recognizes pancreatic beta cells, resulting in their destruction in animal and human cells, but can preserve healthy surviving cells. BioLineRx got rights to BL9020 in October 2013 and at the time said it would seek co-development partners to maximize the candidate's potential. The mAb showed it can prevent the destruction of insulin-producing beta cells in the pancreas and thus the onset of diabetes by inhibiting the natural killer receptor NKp46.

BioMarin Pharmaceutical Inc.

RepliGen Corp.

As part of its continuing efforts to concentrate on the bioprocessing market, Repligen Corp. (research tools) licensed rare disease company BioMarin Pharmaceutical Inc. rights to its histone deacetylase inhibitor (HDACi) library, including several oral small molecules, plus enabling technologies and related IP. (Jan.)

BioMarin paid $2mm up front and is responsible for $160mm in development, regulatory approval, and sales milestones, plus royalties. The company will take over all rights and obligations Repligen had under a 2007 deal with the Scripps Research Institute, which partnered with Repligen the orphan drug candidate RG2833, an HDAC3 inhibitor for Friedreich’s ataxia, a rare, inherited disease that leads to muscle weakness, cardiac damage, and imbalance. The nonprofit found that HDAC blockage reversed the transcription silencing of the FXN gene encoding the frataxin protein, which is deficient in Friedreich’s patients. In March 2013 Repligen completed patient dosing in a Phase I trial of RG2833. While there was a dose-dependent improvement in the expression of a disease biomarker, and the compound was well tolerated and caused no adverse events, potentially toxic metabolites were reported. The current agreement may also include a patent application Repligen licensed from the University of California, Irvine in 2011. That IP covers the use of HDAC3 inhibitors for Alzheimer’s, memory impairment, and post-traumatic stress disorder. (BioMarin and Repligen did state that the HDACi library included projects for other neurological diseases.) One year ago Repligen granted Pfizer exclusive global rights to its spinal muscular atrophy program. Repligen is exiting the pharmaceuticals business to allocate all resources on manufacturing consumables used to produce biologics. The company, which expanded its capabilities in the bioprocessing market through the 2011 acquisition of Novozymes, sells OPUS chromatography columns, and native and recombinant Protein A, a reagent to separate and purify monoclonal antibodies. Repligen has one remaining drug program, RG1068, an imaging agent to improve detection of pancreatic duct abnormalities in pancreatitis and other pancreatic diseases. The company filed an NDA in 2012 but received a complete response letter.

Capricor Therapeutics Inc.

Johnson & Johnson

Janssen Biotech Inc.

Johnson & Johnson’s Janssen Biotech Inc. agreed to help Capricor Therapeutics Inc. (drugs to prevent and treat heart disease) develop its cardiovascular cell therapy program, including Phase II-ready CAP1002. (Jan.)

Janssen will provide $12.5mm up front. The partners will work together on cell manufacturing, with Capricor contributing funding toward manufacturing expenses. Janssen gets the option to exclusively license CAP1002 at any point leading up to the 60 days post-delivery by Capricor of six-month follow-up results from a Phase II trial of the therapeutic, due in mid-2016. (Capricor received a $20mm grant from the California Institute for Regenerative Medicine to conduct the Phase II study.) If Janssen exercises its option, Capricor may get up to $325mm in milestone payments, plus a sales royalty. CAP1002 is an allogeneic adult stem cell therapy that uses donor heart tissue for post-myocardial infarction patients. The cells are extracted from donor tissue then expanded and placed directly into a patient’s heart using a catheter. The program is based on a technology developed by Eduardo Marban, MD, PhD, at Johns Hopkins, from which Capricor spun off in 2006. The development first pivoted on the use of autologous cells taken from a patient that could be cultivated into a regenerative treatment, but Capricor decided to focus on off-the-shelf allogeneic donor stem cells in order to simplify the commercialization and treatment processes.

Celgene Corp.

NantWorks LLC

NantBioScience

Celgene Corp. joined forces with NantBioScience, an oncology subsidiary of NantWorks LLC (health care company that is integrating technology and science to improve diagnostics and therapeutic outcomes), to develop targeted cancer therapies. Celgene made a $75mm up-front payment, comprised of an option fee and undisclosed equity investment. (Jan.)

Celgene granted NantBioScience rights to the nab (nanoparticle albumin-bound) drug encapsulation platform, along with two nab-based compounds: NTB011 is a formulation of a colchicine dimer with cytotoxic and vascular disrupting properties, while NTB010 is a version of 17AAG, a geldanomycin analog and HSP90 inhibitor indicated for solid and blood tumors. Both candidates are IND approved and slated to begin Phase I trials by 2015. Celgene retains an option to license back rights to the compounds through completion of Phase I. NantWorks founder Dr. Patrick Soon-Shiong was previously the executive chairman of Abraxis BioScience, which Celgene bought for $2.9bn in 2010. Dr. Soon-Shiong developed the nab platform while at Abraxis, so the current deal essentially brings the technology back to him. In addition to NTB011 and NTB010, Celgene also received an option to an undisclosed number of additional projects from NantBioScience’s preclinical pipeline, which includes a KRAS inhibitor, a p53-targeting candidate, and a variety of multi-kinase inhibitors.

DepoMed Inc.

Nautilus Neurosciences Inc.

Nautilus Neurosciences Inc. (CNS diseases) licensed spec pharma Depomed Inc. US and Canadian rights to the marketed NSAID Cambia (immediate-release diclofenac; formerly PRO513) for acute migraine with or without aura. (Dec.)

Nautilus received $48.7mm up front and is eligible for a one-time $5mm sales milestone. Depomed will take over related product inventory and assume from Nautilus liabilities including third-party milestones (up to $10mm) and royalties (not more than 11%). Nautilus will make the milestone payments based on the range of $30mm in trailing twelve-month net sales to $100mm in calendar-year net sales. APR Applied Pharma Research SA originally developed Cambia, using its Dynamic Buffering Technology; Kowa Pharmaceuticals America (formerly ProEthic) acquired US and Canadian rights in 2006, and sublicensed those territories to Nautilus in 2009. In 2010, Nautilus agreed to exclusively co-promote Cambia in the US with Mission Pharmacal, but it is assumed this deal in now terminated. That same year, Tribute Pharmaceuticals Canada received Canadian rights and will continue to maintain that sublicense from Depomed. Following the current Cambia agreement, it doesn’t appear that Nautilus has any other assets; the deal potentially represents an exit for Nautilius’ investors, which have put $26mm into the company. Depomed’s pain portfolio already includes postherpetic neuralgia product Gralise, which the company says is heavily prescribed by the same neurologists prescribing Cambia. Depomed will support Cambia through its existing 155 sales territories. This past October, Depomed received $240.5mm in nondilutive financing from PDL BioPharma, which purchased Depomed’s royalty interest under several diabetes deals. Depomed says it will be applying some of those funds to the deal for Cambia. Investment Banks/Advisors: Stifel Nicolaus & Co. Inc. (Nautilus Neurosciences Inc.)

Dr. Reddy's Laboratories Ltd.

Galena Biopharma Inc.

Galena Biopharma Inc. (oncology) licensed Dr. Reddy’s Laboratories Ltd. exclusive rights to develop and sell NeuVax (nelipepimut-S) in India for breast and gastric cancers. (Jan.)

NeuVax is in Phase III breast cancer trials, and Phase II for gastric cancer. Following approval by the FDA or EMA for breast cancer, Dr. Reddy’s will file for approval in India; it will also conduct its own Phase II trial for gastric cancer. Galena gets development and sales milestones, plus double-digit royalties. NeuVax is an immunodominant nonapeptide from the extracellular domain of the HER2 protein, and stimulates an immune response through CD8+ cytotoxic T lymphocytes. It is also in Phase II breast cancer studies in combination with Herceptin (trastuzumab). The collaboration is the first for Dr. Reddy’s in over a year. The last time the company did business in the cancer space was in December 2012, when it licensed exclusive Indian rights to sell Debiopharm Group's prostate cancer therapy Pamorelin LA Depot (triptorelin).

Eli Lilly & Co.

ImClone Systems Inc.

Zymeworks Inc.

Zymeworks Inc. (antibodies and antibody-drug conjugates for cancer, autoimmune, and inflammatory diseases) granted Eli Lilly & Co. and its ImClone Systems Inc. division worldwide rights to use its Azymetric bi-specific antibody production platform to discover an undisclosed number of new therapies against Lilly’s cancer targets. (Jan.)

Zymeworks gets money up front as well as research funding, development and commercialization milestones, and tiered royalties. Azymetric produces antibodies made up of two distinct heavy and light chain pairs engineered into a single molecule, allowing the antibody to bind to two different tumor antigens or drug targets at the same time, enhancing serum half-life and inducing effector function. Lilly gets exclusive worldwide rights to antibodies discovered under the deal, and adds them to an already established bi-specifics cancer program. A year ago, the Big Pharma expanded upon a 2010 alliance with Adimab; Adimab had been using its production platform to select antibodies for Lilly, and in January 2013 the companies amended the deal to include the discovery and optimization of multiple bi-specific antibodies. Lilly is Zymeworks’ second major partner; the biotech is also involved with Merck & Co. Inc. under a similar 2011 deal that has been active lately with newly reached milestones and payments from Merck.

Epirus Biopharmaceuticals Inc.

Epirus Switzerland GMBH

Daiichi Sankyo Co. Ltd.

Ranbaxy Laboratories Ltd.

Epirus Biopharmaceuticals Inc.’s Epirus Switzerland GMBH (developing biosimilar mAbs and proteins) signed on Daiichi Sankyo Co. Ltd.’s Ranbaxy Laboratories Ltd. to help commercialize its lead asset BOW015 for rheumatoid arthritis in India, certain Southeast Asian countries, North Africa, and several other markets. (Dec.)

Ranbaxy pays money up front, milestones, and royalties. Epirus will develop and supply the therapeutic. Both firms will initially pursue commercialization in India, with the other territories to follow. In January 2013, Epirus announced that BOW015 achieved bioequivalence in a single-dose comparator trial with Johnson & Johnson’s blockbuster drug Remicade (infliximab), the tumor necrosis factor inhibitor which generated 2012 sales of $6.1bn. Phase III trials of BOW015 have been completed, showing no meaningful differences from Remicade, and Epirus filed for marketing approval in November 2013. Several companies have been capitalizing on India’s progressing market for biosimilars; this year Biocon plans to co-launch a Herceptin (trastuzumab) biosimilar there with Mylan, and Dr. Reddy's is already marketing a biosimilar of Roche’s MabThera (rituximab). In the next year, Epirus intends to submit regulatory filings for BOW015 in emerging markets not covered under the Ranbaxy agreement.

GW Pharmaceuticals PLC

Ipsen

Ipsen licensed exclusive promotion and distribution rights to GW Pharmaceuticals PLC’s (cannabinoid therapeutics) Sativex (cannabidiol/tetrahydrocannabinol) in Latin America. The deal excludes Mexico and the Caribbean. (Jan.)

Ipsen will provide money up front, regulatory and commercial milestones, and a long-term supply price (GW will manufacture the product). Sativex is a sublingual spray that has already been approved in 24 countries (mainly in Europe) as an add-on treatment for MS patients with moderate-to-severe spasticity who have not responded to other therapies. GW and Ipsen intend to initiate regulatory filings this year for the MS indication; Ipsen also has rights to the drug as a potential treatment for cancer pain (it is in Phase III for this indication). Sativex is an endocannabinoid modulator derived from THC (delta-9-tetrahydrocannabinol) and CBD (cannabidiol). THC is a partial agonist aimed at the cannabinoid receptors CB1 and CB2, which can imitate the effects of neurotransmitters. The transaction is a nice fit for Ipsen, which already has a direct presence in Brazil and Mexico and indirectly in Colombia, Argentina, Venezuela, Chile, and Peru where it markets Dysport for movement disorders and muscle spasticity (the drug is also sold for aesthetic indications). GW has already partnered Sativex with Otsuka Pharmaceutical (in the US); Almirall (Europe); Bayer (the UK and Canada); Novartis (Australia, Asia (excluding China and Japan), the Middle East, and Africa); and Neopharm (Israel).

Helsinn Group

Italfarmaco SPA

Long-time partners Italfarmaco SPA (cardiovascular, oncology, and CNS therapeutics) and the Helsinn Group teamed up again, with Helsinn granting Italfarmaco exclusive rights to sell its cachexia therapy anamorelin in Italy. (Dec.)

The pair first allied in 2003, when Italfarmaco licensed exclusive Italian rights to Helsinn’s Onicit (palonosetron) for chemotherapy-induced nausea and vomiting; the deal was expanded in 2004 to include rights in Spain. Under the current deal, Helsinn will complete development and regulatory activities for anamorelin, an orally active ghrelin receptor agonist that is in Phase III trials for anorexia-cachexia syndrome in patients with non-small cell lung cancer. Helsinn will supply the resulting product to Italfarmaco, which is responsible for commercialization in Italy, San Marino, and Vatican City. In November, Helsinn granted Chugai rights to sell anamorelin in Germany, France, Benelux, the UK, and Ireland.

Hospira Inc.

Orion Corp.

Novartis AG

Sandoz

Hospira Inc. and Orion Corp. settled patent litigation and granted Novartis AG’s Sandoz International GMBH the right to launch in the US a generic version of Precedex (dexmedetomidine) on December 26, 2014, or sooner under certain circumstances. The legal proceeding pertained to Hospira’s US Patent No. 6,716,867 and Orion’s US Patent No. 4,910,214. Precedex is approved for the sedation of intubated and mechanically ventilated patients for up to 24 hours in the intensive care unit. (Dec.)

Immunocore Ltd.

AstraZeneca PLC

MedImmune LLC

Immunocore Ltd. (develops bi-functional proteins) will work with AstraZeneca PLC’s MedImmune LLC to develop new cancer candidates based on Immunocore’s Immune Mobilising Monoclonal T-Cell Receptor Against Cancer (ImmTAC) platform. (Jan.)

ImmTACs are bi-specific proteins made up of a high affinity T-cell receptor linked to an anti-CD3 antibody fragment, and are designed to stimulate the body’s immune system to find and kill targeted cancer cells. MedImmune and Immunocore will work together to generate ImmTACS against selected targets, with each company retaining the right to select candidates for further development and commercialization. Immunocore gets $20mm up front for each program selected by AZ, and up to $300mm in development and sales milestones per candidate, plus significant tiered royalties. MedImmune is the third major partner Immunocore has signed since it spun off of Medigene in 2008. Roche’s Genentech penned a collaboration, with similar terms to the MedImmune deal, in June 2013, and shortly after, GlaxoSmithKline licensed rights to ImmTACs. In November, Glaxo announced that the first lead candidate was identified, triggering a milestone payment to Immunocore. For MedImmune’s parent AZ, the Immunocore partnership is the Big Pharma’s third oncology alliance in just the first ten days of 2014. AZ bought a preclinical CDK9 inhibitor program from Probiodrug AG right after the New Year, and a few days later, AZ announced a cancer drug screening and research deal with Horizon Discovery.

Intrexon Corp.

Johnson & Johnson

Johnson & Johnson Consumer Cos. Inc.

Johnson & Johnson Consumer & Personal Products WW

Intrexon Corp. signed an alliance with Johnson & Johnson’s Innovation Center and Johnson & Johnson Consumer & Personal Products WW (part of Johnson & Johnson Consumer Inc.) for the creation of skin and hair care products. (Dec.)

Intrexon will combine its synthetic biology technologies with J&J’s consumer products expertise. The companies will jointly research and develop the products. While Intrexon has partnered with numerous companies for the development of therapeutics including those for cancer, infectious diseases, and ocular diseases, this appears to be its second dermatology-focused relationship. The other is with Fibrocell Science for a remedy for recessive dystrophicepidermolysis bullosa, a rare blistering disorder, and psoriasis.

Intrexon Corp.

OvaScience Inc.

OvaXon

OvaScience Inc. (infertility treatments) allied with Intrexon Corp. (synthetic biology platforms) to further develop its infertility technology. (Dec.)

Intrexon gets $2.5mm in OvaScience stock up front (it received 273k common shares), plus another $2.5mm technology access cash payment in one year. Intrexon is also eligible for commercial milestones and royalties. In addition, once Intrexon delivers lab and animal data, the company gets a mid single-digit royalty. OvaScience will have access to Intrexon’s industrialized synthetic biology technologies, including the proprietary Cell Systems Informatics, UltraVector, RheoSwitch, AttSite, and LEAP, to create methodologies that will speed up the scalable development of OvaScience’s OvaTure platform. Without the need for hormone injections, OvaTure uses techniques to identify, isolate, and mature egg precursor cells (EggPCs; immature eggs found on the outside of the ovaries) into high-quality eggs. The companies also created the joint venture, OvaXon, which will combine OvaScience and Intrexon’s technologies for use in human and animal health treatments. The companies will equally share R&D expenses and are each investing $1.5mm for their 50/50 stake. OvaXon has IP rights for inherited diseases, but excluding human fertility. This is one of three alliances Intrexon penned this month; the others involve Agilis (Friedreich’s ataxia) and Johnson & Johnson (consumer health products).

Johnson & Johnson

Janssen Biotech Inc.

Nodality Inc.

Nodality Inc. (cancer and immune disorder therapeutics) agreed to apply its Single Cell Network Profiling (SCNP) platform to Johnson & Johnson’s Janssen Biotech Inc.’s immunology programs. (Jan.)

Nodality gets money up front and research funding. The transaction is designed to improve the development and increase the success rates of rheumatoid arthritis and inflammatory bowel disease drug candidates by more closely examining their biological function and single cell level activity, thus predicting patients' responses to various treatments. J&J has an option to develop companion diagnostics for compounds covered by the Nodality arrangement. This is Nodality’s third partnership under which it is applying its SCNP technology (in-licensed from Stanford University) to drug development. The other arrangements were made with UCB and Pfizer.

Johnson & Johnson

Janssen Biotech Inc.

Scholar Rock Inc.

Johnson & Johnson’s Janssen Biotech Inc. teamed up with Scholar Rock Inc. (focused on niche activators) to discover and develop autoimmune disease and cancer immunotherapies that regulate immune system signaling by targeting TGF-beta1. (Jan.)

Janssen gets an exclusive global option to license, develop, and market resulting therapeutics for any immune-modulated indication. Scholar Rock is free to pursue the modulators in areas that include wound healing, fibrosis, and non-immunomodulated cancer. Janssen will provide research support; option payments; and preclinical, clinical, regulatory, and commercialization milestones. Scholar Rock is also eligible for royalties. Other companies have tried to work on TGF-beta 1 as a drug target, but have triggered systemic side effects including infection and increased risk of cancer; Scholar Rock’s IP is designed to target TGF-beta 1 niche activators locally. The technology was developed by Timothy Springer, PhD, and Leonard Zon, MD, in their labs at Harvard Medical School and Boston Children’s Hospital, respectively. Scholar Rock, which raised seed money from Polaris Venture Partners, has a pipeline of niche activators for autoimmune and musculoskeletal diseases and fibrosis.

Kirin Holdings Co. Ltd.

Kyowa Hakko Kirin Co. Ltd.

Leo Pharma AS

Leo Pharma KK

Kyowa Hakko Kirin Co. Ltd. licensed Japanese co-promotion and distribution rights to dermatology-focused Leo Pharma KK’s (a division of Leo Pharma AS) topical calcipotriol/betamethasone dipropionate combination therapy for psoriasis vulgaris. (Dec.)

Leo Pharma filed for approval of the drug in Japan this past August. It was originally launched in Denmark in 2001 and is now sold in over 97 countries. Leo, which gets money up front and milestones, will supply the drug while Kyowa is in charge of distributing it and providing reps to promote it. The firms will jointly conduct marketing activities. The transaction marks the first time Leo will directly market an in-house drug in Japan.

NovaMedica LLC

Nuvo Research Inc.

Drug delivery firm Nuvo Research Inc. licensed Russian start-up NovaMedica LLC exclusive rights to commercialize the analgesic Pennsaid (diclofenac) 1.5% and the follow-on 2% version in Russia and some CIS territories. (Dec.)

Pennsaid 1.5% is sold in the US, Canada, and certain European countries for treating pain associated with knee osteoarthritis. An NDA has been submitted for Pennsaid 2% and a response is expected in early February 2014. Pennsaid 2%, which is more viscous than original Pennsaid, is supplied in a metered dose pump bottle and applied twice daily compared to four times a day for the 1.5% formulation. NovaMedica will conduct any clinical trials necessary to gain approval in the licensed territories. The 1.5% formulation should be launched in Russia during 2015. Nuvo chose NovaMedica as a partner because of its extensive network and strong sales team in Russia. Nuvo’s other marketers for Pennsaid include Mallinckrodt (US), Paladin (Canada), and Italchimici (Italy and Malta). Earlier this month, NovaMedica received Russian rights to Aptalis Pharma’s gastrointestinal drugs Pylera, Lacteol, and Panzytrat.

Novartis AG

Sandoz

Taiwan Liposome Co. Ltd.

Novartis AG’s Sandoz International GMBH division will market Taiwan Liposome Co. Ltd.’s (TLC; liposome drug delivery technology) amphotericin B in Europe and the US. (Dec.)

TLC sells amphotericin B as AmBiL for systemic fungal infections. The drug employs TLC’s NanoX drug delivery technology, which encapsulates the compound in liposomes so it can be injected, increases circulation time, prevents enzymes or pH from interfering with the delivery, and decreases side effects. Sandoz joins TLC’s other marketing partners for the drug, including Yungshin Pharmaceutical (Taiwan) and SamChunDang Pharmaceuticals (Korea).

Novartis AG

Nuevolution AS

Nuevolution AS (small molecule lead discovery) granted Novartis AG a nonexclusive license to use its Chemetics technology in its own drug discovery efforts. (Jan.)

Novartis will provide money up front, research funding, and milestones as technology transfer progresses. Novartis will practice with Chemetics for its own internal use, and the companies will jointly work on the production of screening libraries. Chemetics uses DNA labeling to screen fragment libraries. This is the second time Novartis and Nuevolution have paired up; the first arrangement was signed in 2009, when Nuevolution agreed to use Chemetics for a limited number of drug candidates of interest to Novartis. Nuevolution has other Chemetics alliances, including ones with GSK, Merck, Boehringer Ingelheim, and Lexicon Pharmaceuticals.

R-Pharm

TaiGen Biotechnology Co. Ltd.

TaiGen Biotechnology Co. Ltd. (therapeutics for cancer, infectious diseases, and diabetic complications) licensed Russian pharmaco R-Pharm CJSC exclusive rights to develop, register, and commercialize its Taigexyn (nemonoxacin) quinolone antibiotic in the Russian Federation, Turkey, and other CIS countries. (Jan.)

R-Pharm assumes all future costs for nemonoxacin in its territories and pays TaiGen money up front, regulatory and commercial milestones, and sales royalties. Available in both IV and oral formulations, nemonoxacin is a DNA topoisomerase inhibitor designed to treat bacterial infections and those caused by drug-resistant bacteria such as methicillin-resistant Staphylococcus aureus and quinolone-resistant MRSA and Streptococcus pneumoniae. (Oral nemonoxacin is most advanced for community-acquired pneumonia in Taiwan and China, where TaiGen completed a Phase II/III trial and submitted an NDA.) The alliance will capitalize on R-Pharm’s infectious disease expertise and network in the licensed territories. Procter & Gamble (now part of Warner Chilcott) originated the drug and licensed TaiGen certain rights in 2004; those rights were expanded to worldwide in late 2011.

Roche

Santaris Pharma AS

Danish drug discovery company Roche Innovation Center Copenhagen AS licensed Roche worldwide rights to oligonucleotide candidates against many RNA disease targets. (Jan.)

Santaris receives $10mm up front; $138mm in preclinical, clinical, regulatory, and sales milestones per product; and royalties. Both partners will conduct discovery work (funded by Roche), with the Big Pharma taking over global development and marketing. The companies will use Santaris’ Locked Nucleic Acid (LNA) technology to generate single-stranded oligonucleotides against mRNA and microRNA. With high-affinity to their targets and shorter length, Santaris says its molecules overcome limitations of antisense and siRNA therapeutics. A day before the current deal was announced, Santaris granted Isarna Therapeutics a license to use LNA to develop oligonucleotides interacting with cytokine transforming growth factor beta targets in oncology. Roche exited the RNAi space, another type of oligonucleotide technology, in 2011 when it divested its business to Arrowhead Research. However, Roche is still involved in other types of oligonucleotide techniques. Last year the company received options to license Isis Pharmaceuticals’ antisense therapeutics for Huntington’s disease.

Sirona Biochem Corp.

In somewhat of an untraditional arrangement, Sirona Biochem Corp. (uses fluorine chemistry to improve carbohydrate-based drugs) is teaming up with investment bank Bloom Burton & Co. to research, develop, and commercialize therapeutics for inflammation and infectious diseases. (Dec.)

Both firms will identify and design the compounds. Using its fluorination technology, Sirona will handle the chemical synthesis and scale-up, while Bloom Burton will fund the work and perform clinical validation and commercialization activities. The companies will share in any resulting profits. Using their respective strengths, Sirona and Bloom Burton seek to create therapies for rare or inflammatory diseases and bacterial resistance.

Sirona Biochem Corp.

Fosun International Ltd.

Shanghai Fosun Pharmaceutical Group Co. Ltd.

Wanbang Biopharmaceuticals Ltd.

Sirona Biochem Corp. (fluorine chemistry) licensed Fosun International Ltd.’s Wanbang Biopharmaceuticals Ltd. exclusive rights to develop, manufacture, and commercialize its preclinical anti-diabetic sodium glucose co-transporter (SGLT) inhibitor SBMTFC039 in China, where Type II diabetes is growing at a rapid rate. (Jan.)

Sirona Biochem receives up to $9.5mm in up-front and milestone payments, plus sales royalties. Wanbang will fund and handle all future activities for the SGLT2 inhibitor in China, and share with Sirona Biochem any clinical data for use in partnerships in other countries. SGLT inhibitors are a new class of compounds designed for diabetes patients who may not get adequate relief from currently marketed drugs. In preclinical studies, SBMTFC039 performed better than Johnson & Johnson’s Invokana (canagliflozin), which in March 2013 became the first SGLT inhibitor to receive FDA approval. Due to the great need for diabetes therapeutics, the Asian market for SGLT2 inhibitors is competitive. Novartis has Japanese co-promotion rights to Taisho Pharmaceutical’s Phase III TS071 (luseogliflozin), Bristol-Myers Squibb and AstraZeneca are working on dapagliflozin, Sanofi and Kowa hold Japanese co-promote rights to Roche/Chugai’s tofogliflozin, Astellas has Phase III ipragliflozin (in-licensed from Kotobuki Pharmaceutical), and Mitsubishi Tanabe’s canagliflozin is partnered with Daiichi Sankyo. This is Sirona’s second agreement in as many months; it is allying with investment bank Bloom Burton & Co. to research, develop, and commercialize inflammation and infectious disease therapeutics.

Financings

Acceleron Pharma Inc.

Three months after completing its $89mm IPO and receiving a concurrent $10mm investment from partner Celgene, Acceleron Pharma Inc. (protein therapeutics targeting the transforming growth factor-beta (TGF-B) superfamily) netted $130mm by publicly selling 2.8mm shares (including the overallotment) at $50. (Jan.)

Acceleron will spend the majority of the proceeds (approximately $57mm) on dalantercept, including initiation of Phase II studies in combination with either an approved anti-angiogenesis agent or chemotherapy for advanced solid tumors; and to obtain product supply for Phase III. In addition, the company plans to start human testing for ACE083 in diseases involving muscle loss including inclusion body myositis, facioscapulohumeral dystrophy, and disuse atrophy. Some other funds will support development of preclinical candidates. Investment Banks/Advisors: Citigroup Inc.; JMP Securities LLC; Leerink Partners LLC; Piper Jaffray & Co.

Acura Pharmaceuticals Inc.

Abuse-deterring medication developer Acura Pharmaceuticals Inc. raised $10mm via a nonconvertible debt financing from Oxford Finance. The five-year 8.35% loan requires the company to pay back interest only for the first 15 months, followed by repayment of principal plus interest. (The interest-only repayment period may be extended by one-to-two-years should the biotech achieve certain cash receipt goals for its marketed products.) Acura is also required to make a $795k one-time interest payment to Oxford at maturity or if the loan is terminated early. (Dec.)

The new funds will support Acura’s pipeline of tamper-resistant opioids, led by an acetaminophen combination with hydrocodone (formerly Vycavert). The timing of the NDA will depend on the FDA’s decision to allow in the regulatory filing data from a recent Phase II study; BioMedTracker predicts a 10% likelihood of approval for the treatment, due to lack of statistical significance in Phase II primary endpoint of maximum drug liking. The candidate was designed using Acura's Aversion technology, which transforms the active ingredient into a gel when dissolved (Aversion is also incorporated into Oxecta, Acura’s marketed version of oxycodone, partnered with King (now part of Pfizer) in 2007). In addition, Acura hopes to expand its Nexafed franchise--the abuse-resistant form of the decongestant pseudoephedrine, which is sold “behind the counter,” was launched a year ago. The product deters misuse via the Impede polymer matrix, which prevents pseudoephedrine from being converted into methamphetamine.

Adamis Pharmaceuticals Corp.

Adamis Pharmaceuticals Corp. (therapies for respiratory disease, cancer, allergy, and immune disorders) netted $23.7mm through the public sale of 4.3mm common shares (including the overallotment) at $5.95. The company will use $7mm of the proceeds to complete the purchase of 3M's Taper dry powder inhaler; in August, Adamis paid $3mm up front for an exclusive license, with terms calling for an additional $7mm due by the end of the year in order for Adamis to acquire the technology outright. (Dec.)

Investment Banks/Advisors: CRT Capital Group LLC

Aldexa Therapeutics Inc.

Aldeyra Therapeutics Inc., which is working on drug candidates that trap and help dispose of free aldehydes, filed for its initial public offering. (Jan.)

Formed in 2004 as Neuron Systems, the company changed names in late 2012. Aldexa’s lead drug candidate is NS2 for Sjogren-Larsson syndrome, which is caused by mutations in an enzyme that metabolizes fat and results in severe skin disease, mental delay, spasticity, and retinal dysfunction. Aldexa is planning to start Phase II/III testing of the topically applied compound later this year along with a Phase I study of the drug candidate for discoid lupus erythematosis. The company also has an eye drop formulation of ready to enter Phase II for acute anterior uveitis and ocular rosacea with meibomian gland dysfunction. Aldexa brought in almost $18mm through two venture rounds from investors that include Domain Associates and Johnson & Johnson Development Corp. Investment Banks/Advisors: Aegis Capital Corp.

Alkermes PLC

Alkermes PLC (drug delivery technologies incorporated into multiple marketed products; pipeline is focused on neurological diseases, led by major depressive disorder and schizophrenia) netted $248mm by selling 5.9mm ordinary shares at $42.25 (a 2% premium) to Invesco Asset Management, via its Invesco Perpetual Income Fund and Invesco Perpetual High Income Fund. Following the transaction, Invesco has a 4% stake in Alkermes. (Jan.)

Ampio Pharmaceuticals Inc.

Vyrix Pharmaceuticals Inc.

Ampio Pharmaceuticals Inc. (drugs for inflammatory conditions) spun off its sexual dysfunction business into Vyrix Pharmaceuticals Inc. (Dec.)

Vyrix, which is expected to be funded through an IPO within the next year, will have assets that include late-stage Zertane (tramadol) and Zertane-ED, which were gained through Ampio’s 2010 purchase of DMI Biosciences. Zertane is a tablet taken as needed for premature ejaculation (PE); the drug is approved for over 30 other indications including pain and arthritis. Zertane-ED combines Zertane with a PDE-5 inhibitor to treat PE and erectile dysfunction. Zertane has already undergone two Phase I, two Phase II, and two Phase III European studies. Vyrix has the necessary funding required to finish two registration trials; two international licensing deals (Daewoong Pharmaceutical, which has South Korean rights to Zertane under a 2011 deal, will perform the first trial of Zertane-ED); and a ten-year supply agreement with Daewoong. A marketing application for Zertane has already been submitted in Australia and Vyrix expects the approval to come in 2014. The divesture will enable Ampio to focus on its inflammation assets, including Ampion, which may be suitable as a non-steroidal injection for arthritis, allergic conjunctivitis and rhinitis, inflammatory respiratory disease,, and neurodegenerative CNS diseases.

Argos Therapeutics Inc.

A month after completing a $60mm Series E round, cancer and infectious disease immunotherapy company Argos Therapeutics Inc. filed for an initial public offering on Nasdaq. Argos first attempted to go public in July 2011--even going as far as setting terms at 5.25mm shares with a $13-15 price range--but withdrew the offering in March 2012 due to poor market conditions. (Dec.)

Founded as Dendritix in 1997, and also known as Merix Bioscience before changing its name to Argos in 2004, the company privately raised over $160mm through five venture rounds. Using the Arcelis platform, a technology it licensed from Duke University, Argos takes dendritic cells (known to activate an immune response) directly from a patient’s white blood cells and loads them with biological components (that encode selected viral antigens) from the patient’s tumor cells or virus to create a personalized immunotherapeutic specific to that person’s disease. Through Arcelis, Argos developed AGS003, Phase III-ready for metastatic renal cell carcinoma (mRCC) and other cancers. Its second candidate is AGS004, currently in a Phase IIb trial for HIV funded by the National Institutes of Health under a $39.3mm contract. It also has a Phase I lupus candidate, and hopes to develop additional therapies with potential applications in transplantation rejection and inflammatory and autoimmune disorders. Concurrent with its Series E round (began in August and completed in November), Argos forged royalty-bearing collaborations with Pharmstandard International--which took a license to AGS003 in Russia in exchange for equity in Argos--and Green Cross Corp., which also bought Argos Series E shares and gained an exclusive license to AGS003 in South Korea. Both Pharmstandard and Green Cross also have a right of first negotiation for development and commercialization in their respective territories to specified additional Argos candidates. Argos will allocate most of the IPO proceeds to fund a Phase III trial of AGS003 in mRCC in combination with Sutent (sunitinib), for which it’s currently enrolling patients; Phase II trials of AGS003 in non-clear cell mRCC and early-stage RCC prior to and following nephrectomy and other solid tumors; two additional Phase II trials of AGS004 in HIV eradication and long-term viral control in pediatric patients; and the construction and outfitting of a new commercial manufacturing facility. UPDATE January 2014: Argos plans to sell 4.25mm shares at a $13-15 range. Investment Banks/Advisors: JMP Securities LLC; Needham & Co. Inc.; Piper Jaffray & Co.; Stifel Nicolaus & Co. Inc.

Auspex Pharmaceuticals Inc.

Orphan disease medicines developer Auspex Pharmaceuticals Inc. (focused on CNS, respiratory, cardiovascular, and immunological disorders) filed for its IPO. (Dec.)

Founded in 2001, the company has brought in over $50mm from three known financing rounds over the past five years, the most recent of which was a $25mm Series D round a year ago. It also just announced the closing of concurrent financings (a Series E round and a venture debt transaction) that together totaled approximately $35mm. Auspex is building a pipeline of therapeutics that improves on existing drugs. The company’s lead compound, SD809 (dutetrabenazine), is in a Phase III trial for chorea (abnormal involuntary movements) associated with Huntington’s disease. Tetrabenazine (marketed in the US as Xenazine by Valeant Pharmaceuticals) is currently the only FDA-approved therapy for this condition. To make SD809, Auspex substitutes deuterium (a non-toxic, naturally occurring form of hydrogen) for the hydrogen molecule in tetrabenazine, decreasing the breakdown of the drug’s active metabolites and resulting in an increased half-life and an enhanced profile that enables a less frequent dosing schedule, improved tolerability, reduced variability in drug metabolism from patient to patient, and fewer side effects compared to tetrabenazine. Auspex expects to submit an NDA for SD809 to the FDA by Q4 2014. Also in Auspex’s pipeline is SD254, a deuterium-substituted version of venlafaxine, in Phase I for neuropathic pain, and the preclinical SD560, a deuterium-substituted pirfenidone for idiopathic pulmonary fibrosis. Additionally the company is working on several preclinical compounds focused on other hyperkinetic movement disorders including tardive dyskinesia and Tourette syndrome. UPDATE January 2014: Auspex plans to sell 5.5mm shares at a $10-12 range. Investment Banks/Advisors: BMO Financial Group; Ladenburg Thalmann & Co. Inc.; Robert W. Baird & Co. Inc.; Stifel Nicolaus & Co. Inc.; William Blair & Co.

Celsion Corp.

Celsion Corp. (heat-activated liposome therapy for cancer) netted $13.9mm through the registered direct sale of 3.6mm units at $4.16 (a slight premium). Each unit consisted of one common share, a five-year Series A warrant to purchase 0.25 of a share at $4.10, and a one-year Series B warrant to buy 0.25 of a share at $4.10. An unnamed health care fund led the offering, and HC Wainwright was the placement agent. (Jan.)

Investment Banks/Advisors: HC Wainwright & Co.

Concert Pharmaceuticals Inc.

Concert Pharmaceuticals Inc., an eight-year-old biotech specializing in deuterium substitution, filed for a $75mm initial public offering on Nasdaq. (Jan.)

The company’s DCE Platform (Deuterated Chemical Entity) is designed to improve the molecular stability of existing therapeutic compounds (mostly approved or advanced-stage), resulting in their enhanced clinical safety, tolerability, or efficacy. It accomplishes this by swapping hydrogen molecules for deuterium, a heavy hydrogen isotope found in sea water, which forms a more stable bond with carbon. Concert’s own pipeline is funded primarily through its DCE collaborations with other drug developers. In its January S-1 the company reported that by the end of Q3 2013, it had brought in an aggregate of $105mm in partnership-related income (e.g., up-front, milestone and R&D payments, and equity investments), and had a cash position of $42.6mm. The company has raised $95mm through venture financings, its most recent a 2008 Series C round worth $37mm. Concert’s pipeline includes CTP354, in Phase I for multiple sclerosis- and spinal cord injury-related spasticity, and CTP499, a Phase II compound for diabetic kidney disease. The biotech had licensed CTP499 to GSK in 2009, but subject to a later amendment the deal expired in 2012 and rights to the compound reverted back to Concert. Should Concert ultimately commercialize CTP499, or transfers rights to it prior to a specified date in 2018, the company owes GSK up to $2.75mm. Under terms of the 2009 deal, GSK provided Concert with $18.5mm up front and a $16.7mm equity investment. Concert has since had three other deuterium collaborations. In February 2012, Avanir Pharmaceuticals Inc. licensed exclusive global rights to several Concert dextromethorphan analogs incorporating deuterium, including CTP786 (then preclinical, now known as AVP786 and in Phase I) for neurologic and psychiatric disorders. The deal provided $2mm up front; includes over $200mm in milestones tied to resulting multiple products’ clinical, regulatory, and commercial successes; plus royalties. In February 2013 Concert licensed a deuterium-modified narcolepsy program to Jazz Pharmaceuticals PLC, including Phase I JZP386 (then preclinical, now in Phase I) for $4mm up front, up to about $113mm in milestones, plus royalties. Concert most recently allied in May 2013 with Celgene Corp. to which it licensed several potential deuterated therapies for cancer and inflammation in exchange for $35mm up front, up to $300mm in milestones, and royalties. Investment Banks/Advisors: JMP Securities LLC; Roth Capital Partners; UBS Investment Bank; Wells Fargo Securities LLC

Derma Sciences Inc.

Wound care company Derma Sciences Inc. netted $70.5mm through the public sale of 6.5mm common shares at $11.50. A portion of the proceeds will fund continued trials of DSC127, an angiotensin analog in Phase III to speed healing of diabetic foot ulcers. (Jan.)

Investment Banks/Advisors: Canaccord Genuity Inc.; Oppenheimer & Co. Inc.; Piper Jaffray & Co.; Roth Capital Partners

Dicerna Pharmaceuticals Inc.

Less than five months after raising $60mm in Series C funds from its venture backers, Dicerna Pharmaceuticals Inc. (gene silencing in rare liver diseases and genetically defined cancers) filed for an initial public offering. (Dec.)

Dicerna was founded in 2007 around IP (licensed from City of Hope) pertaining to its core Dicer Substrate Technology. The company’s approach is to use Dicer substrate siRNAs (DsiRNAs) for RNA interference (RNAi), a gene silencing technique. DsiRNAs are double-stranded asymmetric RNA molecules that are structured so that they are processed by the Dicer enzyme--the natural starting point in the human cell cytoplasm for RNAi. DsiRNAs are delivered subcutaneously and directly to tissues via Dicerna’s EnCore lipid nanoparticles (the DsiRNA strands are conjugated to both a targeting and endosomal escape agent, allowing the therapeutic to enter the interior cell). The biotech plans to start Phase I trials for its lead candidate DCRM1711 in the first half of 2014; DCRM1711 will address tumors overexpressing the MYC oncogene, initially for hepatocellular carcinoma. Dicerna is also working on DCRPH1, which prevents production of glycolate oxidase, a liver metabolic enzyme, to treat primary hyperoxaluria 1. By disrupting the metabolic pathway, DCRPH1 is expected to prevent oxalate build-up, which leads to kidney function loss and eventually failure. Human testing is slated to begin in 2015 for this candidate as well as other liver-targeting programs. Dicerna is using Dicer Substrate Technology in deals with Kyowa Hakko Kirin (for KRAS-mutated solid tumors, immune diseases, and inflammation) and Ipsen (oncology and endocrinology indications). UPDATE January 2014: Dicerna announced terms: 5mm shares for $11-13.Investment Banks/Advisors: Jefferies & Co. Inc.; Leerink Partners LLC; Stifel Nicolaus & Co. Inc.

Eagle Pharmaceuticals Inc.

Eagle Pharmaceuticals Inc. (injectable drugs for cancer and the critical care area) filed for its IPO. (Dec.)

Eagle was founded in 2007 and has brought in about $86mm through preferred stock offerings. Its business model is to develop improved versions of existing FDA-approved branded injectable drugs. With these products, Eagle aims to offer advantages over generic counterparts--such as reduced pricing, extended IP protection, and expanded indications--by entering the market before or at the same time as the generic competitor. Eagle brought in FYE 2013 revenues of $13.7mm. Its EP1101 is a ready-to-use IV formulation of argatroban (a synthetic direct thrombin inhibitor) that was approved in 2011 in the US, where it’s marketed by The Medicines Co. under a 2009 agreement. EP1101 is used as an anticoagulant in heparin-induced thrombocytopenia (HIT) patients or at-risk HIT patients undergoing percutaneous coronary intervention. EP-1101 was launched prior to the first generic version and has a 28% share of the overall argatroban market. Eagle’s lead pipeline projects include two versions of Teva’a Treanda (bendamustine) chemotherapeutic for chronic lymphocytic leukemia and indolent non-Hodgkin’s lymphoma: EP3101 a ready-to-dilute form, for which an NDA was submitted in September 2013, and EP3102, a short-infusion-time bendamustine in Phase I (both compounds treat the same indications as Treanda, but don’t require reconstitution prior to administration); NDA-ready Ryanodex, a lyophilized powder form of dantrolene currently marketed by JHP Pharmaceuticals as Dantrium (and a generic sold by US WorldMeds as Revonto), a muscle relaxant for malignant hyperthermia; and EP4104 (dantrolene), which completed Phase I for exertional heat stroke, a condition for which no drug is yet approved. Eagle has gained orphan drug designation for both dantrolene compounds in their respective indications. Eagle’s pipeline also has several preclinical candidates including a hydrogel depot formulation of tigecycline--a twice-daily IV antibiotic for various infections. Under a 2011 collaboration, Eagle is working on a once-daily subcutaneous injection version of tigecycline using Flamel Technologies’ Medusa platform. UPDATE January 2014: IEagle announced it plans to sell 3.3mm shares at a $14-16 range. Investment Banks/Advisors: Cantor Fitzgerald & Co.; Piper Jaffray & Co.; William Blair & Co.

Eleven Biotherapeutics Inc.

Ophthalmology-focused Eleven Biotherapeutics Inc. filed for its initial public offering. (Dec.)

Three-year-old Eleven’s lead drug candidate is Phase III-ready EBI005 for the topical treatment of moderate-to-severe dry eye disease; the compound is in Phase I for allergic conjunctivitis. The company is also working on several preclinical therapeutics, including EBI029 for diabetic macular edema (DME) and EBI028 for uveitis. Eleven uses its AMP-Rx platform to design, engineer, and generate protein therapies to hit key targets that are linked to the onset or continuation of ocular conditions. Earlier this year the company agreed to use AMP-Rx to optimize one of ThromboGenics’ therapeutics for back-of-the-eye diseases, including DME. Eleven has raised close to $60mm through two venture rounds (its Series B closed right before the IPO filing) from investors that include Third Rock Ventures, Flagship Ventures, and JAFCO. UPDATE January 2014: Eleven plans to sell 4.3mm common shares between $13-15 each. Investment Banks/Advisors: Citigroup Inc.; Cowen & Co. LLC; Leerink Partners LLC

Emergent BioSolutions Inc.

To fund its recently announced acquisition of Apotex Inc.’s Cangene Corp., vaccines developer Emergent BioSolutions Inc. raised $250mm (including the overallotment) through the sale of 2.875% seven-year convertible senior notes. Emergent originally thought it would sell $200mm in debt. The debt converts at 30.8821 common per $1k principal amount of notes, equating to $32.38 per share. (The company's stock is averaging $25.50.) (Jan.)

Exelixis Inc.

Cancer therapeutics company Exelixis Inc. netted $76mm through the public sale of 10mm common shares at $8. (Jan.)

Investment Banks/Advisors: Cowen & Co. LLC

Flexion Therapeutics Inc.

Drug development firm Flexion Therapeutics Inc. filed for its initial public offering, hoping to sell 5mm shares between $12 and $14 each. (Jan.)

Flexion’s business model is based on Lilly Research Laboratories’ Chorus division, aiming to bring candidates through proof-of-concept faster and more cost effectively than the traditional development process. The company was founded in late-2007 and is working on three candidates. Leading the pipeline is FX006, an injectable, intra-articular, sustained-release therapy in Phase IIb for moderate to severe osteoarthritis (OA) pain. Next in line is Phase IIa FX005, a sustained-release p38 inhibitor with analgesic and anti-inflammatory properties aimed at end-stage OA pain. It also has the TrkA receptor antagonist FX007 in preclinical studies for post-operative pain. Flexion licensed exclusive rights to FX005 and FX007 from AstraZeneca in 2009 and 2010, respectively. The company is backed by founding investors Versant Ventures, 5AM Ventures, and Sofinnova Partners, as well as Pfizer Venture Investments and Novo Ventures. It has raised a total of $78mm and as of September 30, 2013, Flexion had $21mm in cash on hand. Investment Banks/Advisors: BMO Financial Group; Wells Fargo Securities LLC

Genmab AS

Genmab AS (therapeutic antibodies for cancer) grossed DKK998mm ($183mm) through the private sale of 4.6mm shares at DKK217 (an 8% discount) to undisclosed investors. Funds will be used for a variety of activities, including clinical trials of Hu-Max-TF-ADC (in Phase I for eight different tumor types); advancing preclinical projects into clinical trials; further development of the DuoBody and HexaBody antibody technologies; and potential acquisitions of new products or businesses. (Jan.)

Glycomimetics Inc.

Two months after postponing its IPO, GlycoMimetics Inc. (diseases associated with carbohydrate biology) succeeded in going public, netting $60mm by selling 8.1mm shares (including the overallotment; and more than the 5.75mm announced days before the offering closed) for $8. The company first filed an S-1 in October 2013, setting terms of 4mm shares at $14-16. (Jan.)

The biotech develops small molecules that mimic the structure of carbohydrates involved in key biological processes, in particular those complex carbohydrates that attach to the surface of proteins, altering their function and interactions with other molecules. GlycoMimetics’ first target is selectin, an adhesion protein involved in inflammation in multiple diseases. Lead compound GMI1070 (rivipansel), an E-, P-, and L-selectin antagonist, is in Phase II for painful vaso-occlusive crisis (VOC), a severe complication of sickle cell disease. If GMI1070 is approved (it has US and EU orphan drug status), the company claims it would be the first drug on the market to interrupt the underlying cause of VOC, which is currently treated by just managing the symptoms. Pfizer holds exclusive worldwide rights to GMI1070 under a 2011 deal. GlycoMimetics’ next project is preclinical GMI1271 in combination with chemotherapy for acute myeloid leukemia and other hematological cancers. The candidate inhibits E-selectin, which binds to cancer cells in the bone marrow, preventing them from entering circulation where they could become more sensitive to the chemo. An IND is planned for Q1 2014. GlycoMimetics also has early-stage programs against the following targets: E-selectin for cardiovascular diseases; E-selectin plus the chemokine receptor CXCR4 for cancers with significant bone marrow involvement, including myeloma; and PA-IL/PA-IIL virulence factors for antibiotic-resistant Pseudomonas infections. Since GlycoMimetics’ creation in 2003, it has raised nearly $63mm; the company’s principal shareholders are New Enterprise Associates, Genzyme Ventures, Anthem Capital, Alliance Technology Ventures, and Rosetta Capital. Investment Banks/Advisors: Barclays Bank PLC; Canaccord Genuity Inc.; Jefferies & Co. Inc.; Stifel Nicolaus & Co. Inc.

Lorus Therapeutics Inc.

Lorus Therapeutics Inc. (oncology) publicly sold 14.6mm shares (including the overallotment) at $Cdn0.55 ($0.50), for gross proceeds of $Cdn8mm. (Dec.)

Investment Banks/Advisors: Canaccord Genuity Inc.

NanoViricides Inc.

NanoViricides Inc. (influenza therapies) netted $18.8mm through the registered direct offering of 3.8mm units at $5.25 (market average) to institutional investors and returning shareholders. Each unit consists of one common share and 0.65 of a five-year warrant; whole warrants are exercisable at $6.05 per share. Midtown Partners and Chardan Capital Markets were the placement agents. Some of the funds will be used to bring its FluCide through Phase II and move DengueCide into the clinic. (Jan.)

Investment Banks/Advisors: Chardan Capital Markets; Midtown Partners & Co.

Nektar Therapeutics Inc.

Nektar Therapeutics (drug delivery technologies for oncology, pain, infectious disease, and immune disorder treatments) netted $101.9mm through the public sale of 8.5mm common shares at $12.75. (Jan.)

Investment Banks/Advisors: Brean Capital LLC; Cowen & Co. LLC; JP Morgan Chase & Co.; Jefferies & Co. Inc.; Piper Jaffray & Co.; Roth Capital Partners; William Blair & Co.

NephroGenex Inc.

NephroGenex Inc. (renal therapeutics) filed for its initial public offering. It expects to sell common shares between $12-14 apiece. (Dec.)

The nine-year-old company is working on Phase III-ready Pyridorin (pyridoxamine) as an oral treatment to slow the progression of diabetic nephropathy, and examining the use of an IV formulation of the therapeutic for acute kidney injury. It licensed Pyridorin patents from Vanderbilt University and BioStratum in mid-2006, and a year later it out-right acquired them. NephroGenex raised $22.5mm through one venture round, its Series A, which was announced in 2008. The firm has $202k in cash and equivalents as of September 2013. UPDATE January 2014: The company plans to offer 3.1mm common shares between $12-14 each. Investment Banks/Advisors: Aegis Capital Corp.

Neuralstem Inc.

Accredited and institutional health care investors participated in an $18.8mm registered direct offering by Neuralstem Inc. (commercial production and differentiation of neural stem cells derived from the brain and spinal cord). The company sold 6.9mm shares (a slight increase from the 6.8mm originally expected) for $2.91, a 9% premium. Backers also received five-year warrants to buy 3.4mm shares at $3.64. TR Winston was the placement agent. The new funding will support Neuralstem’s ongoing clinical trials; in Q1 2014, the biotech plans to start a Phase I safety trial of its lead candidate NSI566 in chronic spinal cord injury. (NSI566 is already in Phase II for ALS.) (Jan.)

Investment Banks/Advisors: TR Winston Capital Inc.

Receptos Inc.

Receptos Inc. (developing therapies for immune and metabolic diseases) netted $110.4mm in a follow-on public offering of 3.82mm common shares at $30.75 each. Some of the money will support ongoing development of its Phase II/III RPC1063 for relapsing multiple sclerosis and ulcerative colitis, Phase II-ready RPC4046 for eosinophilic esophagitis, and early-stage programs. (Jan.)

Investment Banks/Advisors: BMO Financial Group; Credit Suisse Group; Leerink Partners LLC; Wedbush PacGrow Life Sciences

Retrophin Inc.

Retrophin Inc. (primarily focused on rare disease treatments) netted $37.4mm in its initial public offering of 4.7mm shares for $8.50. (Jan.)

The 2011 start-up gained public status in December 2012 when it reverse merged with the OTC-traded shell Desert Gateway. But the biotech never offered shares or raised money. Retrophin now has fulfilled certain requirements needed to trade on Nasdaq. The company recently finalized a deal with Novartis, gaining exclusive US rights to the Big Pharma’s Syntocinon (oxytocin) nasal spray. Retrophin has asked the FDA to reactivate Syntocinon’s NDA and in Q2 2014 plans to re-launch the product, which Novartis discontinued because of commercial reasons, for its original indication of aiding milk let-down (initial postpartum milk ejection). In addition, Retrophin will develop intranasal oxytocin for autism and schizophrenia. In the autism area, Retrophin is also working on an intranasal formulation of carbetocin, an oxytocin analog. This candidate came from Retrophin’s acquisition of Kyalin Biosciences late last year. On the rare disease front, Retrophin is enrolling patients in a Phase II study of sparsentan (formerly RE021 and PS433540) for focal segmental glomerulosclerosis, which is scar tissue that forms in part of the kidney, and is the primary cause of end-stage renal disease and nephrotic syndrome. Sparsentan is an angiotensin/endothelin dual-acting receptor antagonist (DARA) originally developed by BMS and licensed from Ligand Pharmaceuticals. Further down the pipeline, Retrophin has earlier-stage candidates for infantile spasms (West syndrome)/nephrotic syndrome (RE034), pantothenate kinase-associated neurodegeneration (RE024), Duchenne muscular dystrophy (RE001), and spinal muscular atrophy (RE003). In September 2013, the company tried to get its hands on the marketed insomnia medication Intermezzo (low-dose zolpidem) by acquiring Transcept Pharmaceuticals, but Transcept’s board rejected the proposal, and a couple months later Retrophin withdrew its offer. Investment Banks/Advisors: Jefferies & Co. Inc.; Ladenburg Thalmann & Co. Inc.; Roth Capital Partners; Summer Street Research Partners

ReVance Therapeutics Inc.

Revance Therapeutics Inc. (aesthetic drugs) filed for its initial public offering. (Dec.)

The company was formed in 1999 as Essentia Biosytems to focus on botulinum toxin type A products for the aesthetic dermatology market and changed names in 2009. Revance is working on topical RT001 for Crow’s feet (Phase III), hyperhidrosis (Phase II), and migraine headache (Phase II), and injectable RT002 for glabellar lines (Phase I). In late 2007, Medicis invested $20mm for a 10% stake in Revance in exchange for the option to buy the company or exclusively license North American rights to the two therapeutics. About two years later the deal was terminated--with Revance gaining full rights to the compounds--as a result of Medicis being acquired by Valeant. (Medicis retained its equity stake.) Revance has raised over $160mm from investors that include Essex Woodlands Health Ventures, NovaQuest, Vivo Ventures, Technology Partners, Shepherd Ventures, Palo Alto Investors, Pac-Link Ventures, Essex Capital Corp., and CNF Investments. UPDATE January 2014: Revance plans to sell 5mm common shares between $14-16 apiece. Investment Banks/Advisors: Cowen & Co. LLC; Piper Jaffray & Co.

Rexahn Pharmaceuticals Inc.

Rexahn Pharmaceuticals Inc. (oncology) netted $18.8mm through a registered direct offering of 19mm common shares at $1.05 (a 33% premium) to undisclosed investors. The company also issued five-year warrants to buy 4.8mm shares at $1.28. Proceeds will fund ongoing trials of Rexahn's lead solid tumor projects Archexin (Phase II), RX3117 (just entered Phase Ib), and Supinoxin (RX5902, Phase I). Roth Capital and HC Wainwright were the placement agents. (Jan.)

Investment Banks/Advisors: HC Wainwright & Co.; Roth Capital Partners

XenoPort Inc.

XenoPort Inc. (developing therapies for neurological, musculoskeletal, and dermatological conditions) netted $67.9mm through the follow-on public sale of 12mm common shares at $6 each. The company originally planned to sell 10mm shares. (Jan.)

Investment Banks/Advisors: Credit Suisse Group; RBC Capital Markets; Wells Fargo Securities LLC

RESEARCH, ANALYTICAL EQUIPMENT & SUPPLIES

Mergers & Acquisitions

General Electric Co.

GE Healthcare

Thermo Fisher Scientific Inc.

Thermo Fisher Scientific Inc. is selling to GE Healthcare its HyClone cell culture media and sera, gene modulation technologies, and the Sera-Mag magnetic beads business for $1.06bn. The divestiture was a condition of Thermo’s pending $15.2bn takeover of Life Technologies Corp. disclosed last April. (Jan.)

The products, which have combined 2013 revenues of about $250mm, will be incorporated into GE Healthcare’s life sciences business, broadening the company’s available platforms used to discover and manufacture drugs, vaccines, and diagnostics. The HyClone cell culture and bioprocessing line supports the development and manufacturing of therapeutic proteins and antibodies, cell therapies, and vaccines. It includes fetal bovine and other serum products; media; buffers and process liquids; large-scale cell culture bags; and single-use technologies. GE’s newly acquired gene modulation technologies include siRNAs, shRNAs, and purification kits to isolate DNA and RNA. Sera-Mag magnetic beads have applications in molecular biology, nucleic acid isolation, and clinical diagnostic immunoassays. According to GE Healthcare president and CEO John Dineen, life sciences is one of the company’s fastest-growing business areas (now worth $4bn annually), and this agreement will help it satisfy a global demand for better diagnostics and novel, safe drugs.