Deals Shaping The Medical Industry, September 2017

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 in August 2017.

IN VITRO DIAGNOSTICS

Financings

Cancer Genetics Inc.

Molecular diagnostics firm Cancer Genetics Inc. entered a financing agreement with Aspire Capital, through which Aspire will purchase, over the next two years, up to $16mm of CGI's common stock. Aspire committed to an immediate tranche of $3mm (1mm shares at $3; a 17% discount), and future tranches will be completed at CGI's discretion. The funding will support CGI's concurrent $12mm purchase of Australian CRO vivoPharm Pty. Ltd. (Aug.)

Natera Inc.

Natera Inc. (genetic testing for reproductive health) entered into a $100mm debt facility with existing investor OrbiMed Advisors. The company immediately drew down $75mm, and has until the end of 2018 to draw on the remaining $25mm. The loan matures in August 2024, carries interest of LIBOR plus 8.75%, and can be paid interest-only until maturity. (Aug.)

Oxford Immunotec Global PLC

Oxford Immunotec Global PLC (developing diagnostics for immune-regulated conditions including tuberculosis, Lyme, and Babesia) netted $39.3mm through a public offering of 2.5mm ordinary shares at $16.05. (Aug.)

Investment Banks/Advisors: BTIG LLC

MEDICAL DEVICES

Mergers & Acquisitions

A&E Medical Corp.

RTI Surgical Inc.

RTI Surgical Inc. (formerly RTI Biologics) is divesting its cardiothoracic closure business to A&E Medical Corp. for $54mm in cash and $6mm in potential earn-outs based on regulatory ($1mm) and sales ($5mm) achievements. (Aug.)

RTI gained the business through its mid-2013 acquisition of Pioneer Surgical Technology. A&E now gets cardiothoracic sternal metal cable and plating systems. As part of the deal, RTI entered into a multi-year agreement with A&E to continue to support the divested business segment by manufacturing existing products and engineering, developing, and manufacturing future products. RTI will use $22mm from the sale to pay down a portion of its term loan as it extends its existing credit facility through September 2019. The acquired products will join A&E's portfolio of electrosurgical instruments, temporary cardiac pacing leads, neurology scalp clips, stainless steel sutures, sternal wires, illuminated vein harvest retractors, surgical punches, manual dissectors, scissors, and industrial wire cables. Investment Banks/Advisors: Stephens Inc. (RTI Surgical Inc.)

Fresenius SE & Co. KGAA

Fresenius Medical Care AG & Co. KGAA

NxStage Medical Inc.

Fresenius Medical Care AG & Co. KGAA will pay $30 per share (a 27% premium; $1.98bn equity value and $1.93bn enterprise value) to acquire renal dialysis device firm NxStage Medical Inc., which develops and sells products for the home and critical care markets. (Aug.)

The deal value is about five times NxStage’s 2016 revenues of $366mm. The company’s flagship product System One is a portable hemodialysis system designed for in-home use, offering patients a convenient alternative to visiting a dialysis center a few times a week, reducing overall cost of care, and improving patient outcomes. Fresenius, which has a name for itself in the dialysis clinic arena (with close to 3.7k clinics globally) attempted to enter the portable dialysis market years ago but was not successful and has since faced competition from NxStage’s success with its offerings. Fresenius now sees strong synergies through the NxStage acquisition, both with the access it gains to System One and NxStage's management team and 3.4k employees. NxStage was formed in 1998 and completed a $58.8mm initial public offering in 2005, after having raised over $90mm through venture funding rounds. Investment Banks/Advisors: Bank of America Merrill Lynch (Fresenius Medical Care AG & Co. KGAA); Piper Jaffray & Co. (NxStage Medical Inc.)

Johnson & Johnson

Johnson & Johnson Vision Care Inc.

TearScience Inc.

Johnson & Johnson Vision Care Inc. is buying ophthalmologic device maker TearScience Inc. for an undisclosed sum. (Aug.)

Founded in 2005, TearScience offers devices for treating meibomian gland dysfunction, which is the leading cause of dry eye disease. Its first product, LipiView, is the first device able to capture images of meibomian glands in the eyelids. The LipiFlow thermal pulsation system is designed to liquefy and evacuate obstructions in meibomian glands. Both devices were introduced in 2012 and two years later TearScience launched the LipiView II, which provides high-definition structural images of the meibomian gland. In 2016, the company released LipiScan, the first high-definition gland imager for use during routine workups by eye care professionals. Nearly one year ago J&J Vision paid $4.3bn to acquire Abbott Medical Optics Inc. TearScience will become a part of AMO. TearScience is backed by investors Essex Woodlands Health Ventures, Investor Growth Capital, General Catalyst, De Novo Ventures, Spray Ventures, and Quaker BioVentures.

MiMedx Group Inc.

Stability Biologics LLC

MiMedx Group Inc. is divesting its Stability Biologics LLC subsidiary to former Stability shareholders. (Aug.)

MiMedx will receive from Stability a $3.5mm promissory note--due in quarterly installments starting in Q4 2018 through October 1, 2010. MiMedx will enter into one-year renewable distributor agreements that allow Stability to distribute certain MiMedx’s products using its sales team. MiMedx bought the company, then known as Stability Inc., back in January 2016 for $6mm in cash, $4mm in stock, plus earn-outs. As a result of the divestiture, those earn-out obligations have been terminated. Closely held Stability specializes in tissue products for surgical, spine, and orthopedics applications. Its offerings include Physio 100% bone tissue for bone grafting, demineralized bone matrix products, structural allografts, and skin products for burns and traumatic wound care. MiMedx divested Stability as it seeks to become primarily a biopharmaceutical company focused on gaining approvals for therapeutics based on its placental technology.

Alliances

InControl Medical LLC

Viveve Medical Inc.

Viveve Medical Inc. licensed exclusive US marketing and distribution rights to InControl Medical LLC's FDA-approved devices for incontinence and improving the strength of pelvic floor muscles. (Aug.)

In exchange for a $2.5mm equity investment in ICM, Viveve will directly market, promote, distribute, and sell to US medical professionals and hospitals all ICM's products. ICM is known for its noninvasive, nonsurgical devices to monitor and treat urinary and fecal incontinence. Its offerings include the InTone (electrical stimulation and exercise program to treat female stress, urge, and mixed urinary incontinence), InToneMV (for male or female urinary or fecal incontinence), ApexM (intravaginal stimulation for female incontinence), and Intensity (female sexual health device) brands. Viveve’s radiofrequency device to improve vaginal laxity, Geneveve, has regulatory clearance in over 50 countries, including the US, where it's sold as Viveve for electrocoagulation and hemostasis in general surgical procedures; US approval is pending for sexual function indications.

Intuitive Surgical Inc.

JustRight Surgical LLC

JustRight Surgical LLC granted Intuitive Surgical Inc. exclusive global rights to IP pertaining to its energy-based vessel sealing and tissue stapling technologies, which are used in the minimally invasive surgical robotics field. (Aug.)

The deal also includes an undisclosed equity investment and joint product development. JustRight’s 3mm vessel sealing system was the first to receive FDA approval for pediatric-specific cases; its 5mm mechanical stapler is also the first in the world with a pediatric indication. Intuitive, whose flagship product is the da Vinci surgical robotic system, specializes in adult-sized patients and devices. Now that Intuitive has access to JustRight’s IP, the deal expands the exposure of JustRight’s technologies from strictly the pediatric market into the adult laparoscopic surgical market.

Financings

EnteroMedics Inc.

EnteroMedics Inc. (devices to treat metabolic and gastrointestinal disorders) netted $18.4mm through the follow-on public sale of 20k units priced at $1k. Each unit consists of one Series B convertible preferred share--convertible into 435 common shares at $2.30--and one seven-year warrant to buy 435 common shares at $2.30 each. (Aug.)

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

iCAD Inc.

ICAD Inc. (computer-aided detection systems for cancer diagnosis) entered into a $13mm credit facility with Silicon Valley Bank (SVB), the proceeds of which will be put towards pipeline expansion. An initial term loan of $6mm and a $4mm revolving line of credit are available immediately, and iCAD has the option to get an additional $3mm term loan in 2018 if the company achieves pre-determined revenue milestones. (Aug.)

Osprey Medical Inc.

Osprey Medical Inc. (medical devices and monitoring systems) received commitments for (A$22mm) $17.5mm in a private placement of 55.5mm CHESS Depository Interests (CDIs; representing 27.7mm common shares) at A$0.40 (slight discount to market average) to investors including existing holders (Brandon Capital Partners, the company's largest shareholder, has committed to 13mm CDIs). The company is also seeking to raise A$10.3mm through the sale of 25.8mm CHESS Depository Interests through a non-renounceable entitlement offer. Osprey intends to use the offering proceeds to: expand its US sales force; to initiate a pilot EU sales program in Germany; for ongoing support for post approval market trials and physician sponsored trials; and for continued R&D. (Aug.)

Investment Banks/Advisors: Bell Potter Securities; Canaccord Genuity Inc.; Evans & Co.; Vesparum Capital

Profound Medical Corp.

Profound Medical Corp. raised $Cdn10mm ($8mm) through a bought deal financing of 10mm units at $Cdn1 apiece. Each unit consisted of one common share and one-half of a three-year warrant; each whole warrant is good for one common share at $1.40. Proceeds will support ongoing development of the Tulsa-Pro magnetic resonance imaging/therapeutic ultrasound system for prostate cancer ablation, and the Sonalleve magnetic resonance high-intensity focused ultrasound system (for uterine fibroids and pain relief from bone metastases) that Profound recently acquired from Philips. (Aug.)

Investment Banks/Advisors: CIBC World Markets Corp.; Echelon Wealth Partners

ProLung Inc.

ProLung Inc. (formerly Fresh Medical Laboratories; cancer diagnostic device) filed for its initial public offering on Nasdaq. (Aug.)

Investment Banks/Advisors: Maxim Group LLC

Senseonics Holdings Inc.

Senseonics Holdings Inc. netted $23.4mm through the follow-on public offering of 11.6mm common shares priced at $2.15. The company will use the funds to launch its Eversense continuous glucose monitoring in the US upon approval and to develop next-generation versions. (Aug.)

Investment Banks/Advisors: National Securities Corp.

PHARMACEUTICALS

Mergers & Acquisitions

Aclaris Therapeutics Inc.

Confluence Life Sciences Inc.

Aclaris Therapeutics Inc. acquired private kinase inhibitor firm Confluence Life Sciences Inc. for $20mm up front ($10mm in cash and $10mm in Aclaris common shares). Confluence shareholders could also get up to $80mm in earn-outs for development, regulatory, and sales achievements, plus low-single-digit royalties. (Aug.)

Confluence develops kinase inhibitors for autoimmune diseases, cancer, and inflammation. Lead candidates include CDD450, a preclinical oral MK-2 pathway inhibitor with potential to treat KRAS/BRAF dependent tumors (in combination with checkpoint inhibitors) and immune-inflammatory conditions including psoriatic arthritis, inflammatory bowel disease, rheumatoid arthritis; soft JAK inhibitors for topical application to treat conditions such as alopecia, vitiligo, and atopic dermatitis; and IL2-inducible T-cell kinase (ITK) inhibitors for autoimmune and inflammatory diseases. Through the acquisition, Aclaris also gains access to Confluence’s KINect kinase-focused computational chemistry drug discovery engine, and the company’s Confluence Discovery Technologies contract research division. Confluence’s activities support and help extend Aclaris’ own work in the JAK inhibitor/dermatology space, expanding on candidates it licensed from Rigel back in 2015. Confluence was founded in 2010 and is headed by former Pfizer execs who were responsible for the co-discovery of tofacitnib (the JAK inhibitor now known as Xeljanz). The company's investor syndicate includes BioGenerator, Missouri Technology Corp., Helix Fund, St. Louis Arch Angels, and others.

Bristol-Myers Squibb Co.

IFM Therapeutics

Bristol-Myers Squibb Co. paid $300mm up front for IFM Therapeutics, a private start-up aiming to treat diseases by targeting the innate immune system. (Aug.)

IFM could receive $2.02bn additionally in earn-outs, $1.01bn for each of the first two products from the company's two programs, if they achieve certain development, regulatory, and sales milestones. IFM is also eligible for other earn-out payments tied to further drugs. IFM was founded in 2015 and officially launched in 2016 with a $27mm Series A financing led by Atlas Venture and Abingworth. Novartis is also an investor. IFM is developing small molecules that are designed to control innate immune responses, or the first lines of defense the body has against pathogens. In treating inflammation, including autoimmune diseases, IFM has created preclinical small-molecule NLR protein (NLRP) antagonists that prevent the immune system from attacking itself. The opposite mechanism is taken regarding oncology, in which IFM's innate system activators prompt immune responses to destroy tumors. The company says it will have candidates ready to enter the clinic in late 2017/early 2018. BMS is only acquiring IFM's oncology assets, including preclinical stimulator of interferon genes (STING) and NLRP3 agonists. Novartis is another Big Pharma already quite active in the STING mechanism, through collaborations with Aduro Biotech. But in the NLRP3 area, IFM appears to be the only developer. The rest of IFM's pipeline, focused on inflammation and including NLRP antagonists in liver fibrosis/NASH, inflammatory bowel disease, and gout, are being spun off into the new company IFM Therapeutics LLC. This entity will also retain 17 employees and related facilities. BMS holds a right of first refusal on IFM Therapeutics LLC's NLRP3 antagonist program. IFM's expertise in innate immunity would complement the existing work BMS has done in anticancer immunotherapy through the targeting of adaptive immunity. IFM says that while there has been great advancement in adaptive immunotherapy drugs, they only have a benefit in small patient populations, who may become resistant over time. The company claims that its molecules can make tumors more susceptive to checkpoint inhibitor therapy, including top-selling drugs such as BMS's Yervoy and Opdivo, by turning cold tumors to hot. The Big Pharma's head of discovery Carl Decicco, PhD, stated that the company will test combinations of both products with IFM's candidates.

Cancer Genetics Inc.

vivoPharm Pty. Ltd.

Cancer Genetics Inc. (CGI) acquired privately held Australian CRO vivoPharm Pty. Ltd. for $12mm ($1.2mm in cash and $10.8mm in CGI shares (3mm shares)). The acquisition was partially funded with a concurrent CGI private financing agreement. (Aug.)

VivoPharm services over 40 clients globally, with estimated 2017 revenues of $5mm. The company’s focus is on oncology and immuno-oncology drug discovery and development study design, including early compound selection, in vivo/in vitro data sets, and xenograft and syngeneic tumor models. The company’s studies have supported over 200 IND submissions for cancer indications including lymphoma, leukemia, GI, liver, non-small cell lung, and pancreatic cancers, as well as rare non-cancer diseases. Dr. Ralf Brandt, vivoPharm’s CEO, will take the position of president, discovery and early development services at CGI, and will lead the integration of vivoPharm’s 32-member staff into CGI. The acquisition boosts CGI’s personalized medicine offerings and expands the company’s global reach with an increased presence in Europe and the Asia-Pacific regions.

Cempra Inc.

Melinta Therapeutics Inc.

Public firm Cempra Inc. and closely held Melinta Therapeutics Inc. are merging to create an industry leading anti-infectives company, which retains the Melinta name and will trade on the Nasdaq. (Aug.)

Post-merger, Cempra and Melinta shareholders will hold a 48.1% and 51.9% equity stake, respectively. The nine-member board will be comprised of four representatives from each firm and a yet-to-be appointed CEO. The combined pipeline will be led by Melinta's FDA-approved IV and oral Baxdela for acute bacterial skin and skin structure infections (ABSSSI), including both gram-positive and gram-negative methicillin-resistant staphylococcus aureus. Baxdela is also being studied in Phase III for community-acquired bacterial pneumonia (CABP) and is expected to enter the clinic for complicated urinary tract infections. Melinta also contributes the next-generation oxazolidinone, radezolid, which is in Phase I for acne vulgaris, as well as its ESKAPE pathogen program (Enterococcus faecium, Staphylococcus aureus, Klebsiella pneumoniae, Acinetobacter baumannii, Pseudomonas aeruginosa, Enterobacter species, and Escherichia coli) for bacterial superbugs. The firm anticipates nominating an ESKAPE clinical candidate in 2018. Cempra brings to the table its Phase III Taksta for ABSSSI and bone infections, and solithromycin for CABP (pre-registration), urethritis/gonorrhea (Phase III), and conjunctivitis (preclinical). Investment Banks/Advisors: JP Morgan & Co. (Melinta Therapeutics Inc.); Morgan Stanley & Co.; Stifel Nicolaus & Co. Inc. (Cempra Inc.)

Charles River Laboratories International Inc.

Brains On-Line

Charles River Laboratories International Inc. agreed to acquire private European contract research organization (CRO) Brains On-Line (BOL) for up to €28mm. (Aug.)

Charles River will pay €18mm ($21mm) in cash, plus potential earn-outs up to €6.7mm ($8mm) related to future performance. BOL is headquartered in the Netherlands with operations in the US. Its Encepharm (acquired in May 2016) and Brainlink (disposable microdialysis probes) subsidiaries are also included in the transaction. With a specialty in the analysis of the in vivo pharmacology and pharmacokinetics of drugs in the brain, BOL offers preclinical CRO services, including microdialysis, bioanalysis, electrophysiology (monitoring neuronal activity), and behavioral profiling services for CNS-focused drugs. It provides clients with the data necessary to advance potential therapeutic compounds for CNS diseases (including anxiety, depression, cognition, schizophrenia, and neurodegeneration). The deal expands Charles River's offerings, enabling them to equip clients with additional early-stage research services within this therapeutic area.

CSL Ltd.

CSL Behring

Calimmune Inc.

CSL Behring paid $91mm up front to acquire privately held gene therapy company Calimmune Inc. The deal also includes up to $325mm in performance-based milestones over a period of at least eight years. (Aug.)

Calimmune designs and develops ex vivo hematopoietic cell (HSC) gene therapies, and it’s lead candidate CAL-H is in preclinical studies for sickle cell diseases and beta-thalassemia. Through the acquisition, CSL also gets access to Calimmune’s two technologies--Select+, which increases engraftment and allows for out-patient treatment, and Cytegrity, a scalable lentiviral vector production platform. CAL-H and the two technologies are highly complementary to CSL’s pipeline projects for hematology and rare diseases. CSL also does work in the immune, cardiovascular, respiratory, organ transplant, and neurological spaces. Investment Banks/Advisors: Piper Jaffray & Co. (Calimmune Inc.)

Galena Biopharma Inc.

Sellas Life Sciences Group

Cancer immunotherapy firms Galena Biopharma Inc. and privately held Sellas Life Sciences Group Ltd. agreed to an all-stock reverse merger in which Sellas will merge into Galena and become a wholly owned subsidiary. The combined company--to be named Sellas Life Science Group Inc.--will be 67.5% owned by Sellas and 32.5% by Galena, and will take over Galena’s Nasdaq stock listing under the new symbol SLS. (Aug.)

Galena chose Sellas as its merger partner due to the firms’ highly complementary pipelines. Sellas brings to the table its lead candidate galinpepimut-S, a Wilms tumor 1 (WT1) targeting therapy that is entering Phase III for acute myeloid leukemia and completed Phase II for malignant pleural mesothelioma. Phase II trials are also underway in multiple myeloma and in combination with BMS’s Opdivo (nivolumab) for ovarian cancer. Galena brings NeuVax (nelipepimut-S), which is in Phase II for breast cancer. It also has two early-stage immunotherapy candidates targeting folate binding protein for ovarian, endometrial, and breast cancer. Sellas’s CEO Dr. Angelos Stergiou, MD, will become CEO of the combined company, and the remaining executive committee at Sellas will remain in place for the newly combined entity. Galena’s board of directors will all step down, and the new BOD will be comprised of five representatives from Sellas and two from Galena. Investment Banks/Advisors: Canaccord Genuity Inc. (Galena Biopharma Inc.); Guggenheim Partners LLC (Sellas Life Sciences Group )

Gilead Sciences Inc.

Kite Pharma Inc.

Gilead Sciences Inc. is paying $11.9bn ($180 per share in cash; a 36% premium) to acquire chimeric antigen receptor T cell (CART) therapy developer Kite Pharma Inc. (Aug.)

Kite was formed in 2009 and is developing engineered cell therapies that express a chimeric antigen receptor or a T-cell receptor (TCR). Lead CART candidate axicabtagene ciloleucel (axi-cel) is awaiting FDA approval for refractory aggressive non-Hodgkin’s lymphoma (PDUFA data is November 29, 2017), and is also under review for an MAA in Europe for relapsed/refractory diffuse large B-cell lymphoma, transformed follicular lymphoma, and primary mediastinal B-cell lymphoma (approval in Europe is expected during 2018). If approved, axi-cel would be the first to market for refractory aggressive NHL; some analysts project over $200mm in sales during its first year on the market, and potentially $1.6bn in 2022. The acquisition thrusts Gilead to the forefront of the cell therapy market, and would give the firm its second marketed drug (once axi-cel is approved), alongside Zydelig (idelalisib; relapsed follicular B-cell lymphoma and relapsed CLL. Kite also brings a pipeline of additional cell therapies to Gilead, including both CART and TCR candidates for a variety of solid and blood cancers. Kite’s California-based R&D and manufacturing operations will remain in Santa Monica and El Segundo, respectively, following the acquisition. Investment Banks/Advisors: Bank of America Merrill Lynch (Gilead Sciences Inc.); Centerview Partners LLC; Cowen & Co. LLC; Jefferies & Co. Inc. (Kite Pharma Inc.)

IFM Therapeutics

IFM Therapeutics LLC

Innate immunity-focused IFM Therapeutics is spinning off its non-oncology assets into the new company IFM Therapeutics LLC. (Aug.)

The spin-off was announced concurrently with Bristol-Myers Squibb's $300mm acquisition of IFM Therapeutics and its oncology candidates, including preclinical stimulator of interferon genes (STING) and NLRP3 agonists. IFM Therapeutics LLC will be left with a 17-person team, related facilities, and a pipeline of preclinical small-molecule NLR protein (NLRP) antagonists, including an NLRP3 antagonist in inflammatory diseases and fibrosis, that prevent the immune system from attacking itself. The indications being targeted including liver fibrosis/NASH, inflammatory bowel disease, and gout. BMS holds a right of first refusal on the NLRP3 program.

Mallinckrodt PLC

InfaCare Pharmaceutical Corp.

Mallinckrodt PLC will pay $80mm up front to acquire privately held InfaCare Pharmaceutical Corp., which is developing therapies for the neonatal and pediatric markets. The deal also includes up to $345mm in regulatory- and sales-based earn-outs. (Aug.)

InfaCare’s lead project stannsoporfin has completed a Phase IIb study for severe neonatal jaundice (hyperbilirubinemia). The heme oxygenase inhibitor was granted Fast Track designation for a rolling NDA submission by the FDA; approval could come as early as 2018. Mallinckrodt plans to market stannsoporfin alongside its own Inomax (nitric oxide gas) for inhalation, which is indicated for oxygenation improvement in neonatal patients with hypoxic respiratory failure associated with pulmonary hypertension. InfaCare was formed in 2001 and its syndicate of investors through the years includes Atlas Venture, HealthCare Ventures, and Longitude Capital.

REGENXBIO Inc.

Dimension Therapeutics Inc.

REGENXBIO Inc. agreed to acquire fellow public biotech Dimension Therapeutics Inc. in an all stock deal for an implied value of $3.41 per share (a slight premium). Each outstanding share of Dimension will be converted into the right to receive 0.1573 shares of REGENXBIO; Dimension shareholders are estimated to own 10.9% of the combined entity. (Aug.)

Dimension's two lead products are DTX301, for ornithine transcarbamylase (OTC) deficiency (being evaluated for a Phase I/II trial; received orphan status in US and EU), and DTX401 for glycogen storage disease type Ia (GSDIa; IND expected to be filed in early 2018; received orphan status in US and EU). DTX301 uses the NAV AAV8 vector to deliver a copy of the OTC gene to liver cells and DTX401 uses the same vector to deliver a copy of glucose-6-phosphatase gene to liver cells. Both boards of directors have already approved the transaction. Through the acquisition, the company also obtains access to various preclinical candidates for phenylketonuria (PKU), Wilson disease, and citrullinemia Type I. Investment Banks/Advisors: Morgan Stanley & Co. (REGENXBIO Inc.); MTS Health Partners (Dimension Therapeutics Inc.)

Alliances

Acella Pharmaceuticals LLC

Catalent Inc.

In a multi-year partnership, spec pharma Acella Pharmaceuticals LLC and Catalent Inc. will use Catalent's OptiGel lock technology to develop new abuse-deterrent pain candidates. (Aug.)

Although specific candidates were not disclosed, Acella will develop, manufacture, and commercialize multiple abuse-deterrent pain compounds created through Catalent's OptiGel platform. The technology converts macromolecule IV drugs to an oral dosage form with enhanced permeability and an enteric coating that enables targeted delivery and prevents gastric degradation to maintain active API. In addition, the softgel dosage form resists grinding, blending, or crushing to avoid abuse. Acella already has a portfolio of non-branded pharmaceuticals in areas including cough and cold, dermatology, pain, and women’s health. Just last month the FDA approved its ANDA for an oral solution generic equivalent to Pernix Therapeutics' Vituz (hydrocodone bitartrate/chlorpheniramine maleate) for cough and cold.

ActiveSite Pharmaceuticals

AntriaBio Inc.

ActiveSite Pharmaceuticals licensed AntriaBio Inc. exclusive worldwide rights to develop, manufacture, and commercialize a portfolio of oral plasma kallikrein inhibitors. (Aug.)

The rights extend to the use in both human and animal health for indications including diabetic macular edema and other plasma kallikrein-mediated diseases such as hereditary angioedema. ActiveSite receives an up-front payment of $750k, up to $9mm in development milestones, $27.5mm in regulatory milestones, $10mm in sales milestones, and 1.75-2% sales royalties. AntriaBio will also pay ActiveSite 20% of all sublicense revenue. The licensed candidates have shown potential to normalize retinal vascular permeability (RVP) in animal models. VEGF-induced RVP and retinal edema can be significantly reduced by inhibition or genetic knockout of plasma kallikrein. Current anti-VEGF therapies including ranibizumab, bevacizumab, and aflibercept are administered via injection. Therefore oral therapies will serve as a much better option for patients. AntriaBio plans to finish up IND-enabling toxicology studies and prepare for clinical trials. The plasma kallikrein inhibitors will join AntriaBio's pipeline consisting of a preclinical and Phase I candidate for diabetes.

Allergan PLC

Famy Care Ltd.

Allergan PLC and Famy Care Ltd. have settled patent litigation surrounding Allergan's Restasis (cyclosporine) ophthalmic emulsion 0.05%. The patents expire on August 27, 2024. As a result of the settlement, Famy Care can market in the US a generic version of Restasis starting in February 27, 2024, or earlier under certain circumstances. (Aug.)

Arcus Biosciences Inc.

Harbin Gloria Pharmaceuticals Co. Ltd.

WuXi PharmaTech Inc.

WuXi Biologics

Wuxi Biologics and partner Harbin Gloria Pharmaceuticals Co. Ltd. granted Arcus Biosciences Inc. exclusive rights to develop and sell the anti-PD-1 antibody GSL010 in North America, Europe, Japan, and other undisclosed territories. (Aug.)

WuXi licensed the OmniRat transgenic platform from Ligand, and used the technology to discover and develop GLS010 with Gloria. (Ligand gets a $2mm milestone payment from WuXi as a result of the deal with Arcus, and is eligible for future milestones and royalties.) The partners brought the immune checkpoint inhibitor into Phase I trials for stomach and esophageal cancers. Arcus paid WuXi and Gloria $18.5mm up front for the rights, and committed to up to $422.5mm in development and regulatory milestones (for up to 11 potential projects that could use GLS010 as a component); $375mm in sales milestones; and high-single- to low-double-digit royalties (Strategic Transactions estimates 7-29%). WuXi and Arcus also stated an intention to enter an exclusive three-year deal for development of Arcus’ portfolio, but specific details were not disclosed. Arcus plans to develop GLS010 as a combination therapy with other candidates in its pipeline, including AB928, an A2aR/A2bR inhibitor, and AB154, a TIGIT checkpoint inhibitor, both in preclinical studies.

Ascletis Inc.

Medivir AB

Medivir AB licensed Ascletis Inc. exclusive rights to develop, manufacture, and commercialize its preclinical hepatitis C candidate MIV802 in China. (Aug.)

Medivir received an undisclosed up-front payment and is eligible for milestones based on development through commercial launch plus tiered sales royalties. MIV802 is a nucleotide polymerase inhibitor, which Ascletis has renamed ASC21. The compound was discovered by Novadex Pharmaceuticals AB and licensed to Medivir in 2012. In August 2016, Medivir granted Trek Therapeutics exclusive rights to develop and commercialize MIV802 worldwide, excluding China, Taiwan, Hong Kong, and Macau. Ascletis currently has two other HCV candidates in its pipeline: danoprevir (ASC08; NDA was filed in China in late-2016) and Phase III ravidasvir (ASC16; in-licensed from Presidio in late 2014).

AstraZeneca PLC

Takeda Pharmaceutical Co. Ltd.

AstraZeneca PLC and Takeda Pharmaceutical Co. Ltd. will jointly develop and sell AZ’s Parkinson’s disease candidate MEDI1341. The project is slated to enter Phase I later this year. (Aug.)

AZ is responsible for Phase I trials, and Takeda will take over development from that point. All development and commercialization costs, as well as revenues, will be shared equally. Specific financial details were not disclosed, except that the potential $400mm deal value includes initial revenue, plus development and sales milestones. MEDI1341 is an alpha-synuclein antibody with high affinity, high selectively, and reduced effector function designed to prevent the formation and spreading of alpha synuclein, an aggregation-prone protein of Lewy bodies, which accumulate in nerve cells of Parkinson’s disease patients. Neurology is one of Takeda’s key therapy areas; its PD pipeline currently includes rasagiline, in-licensed from Teva and awaiting approval in Japan.

BioQ Pharma

Stada Arzneimittel AG

Stada Pharmaceuticals Australia Pty. Ltd.

Stada Arzneimittel AG, through its Australian generics subsidiary Stada Pharmaceuticals Australia Pty. Ltd., will commercialize in Australia and New Zealand BioQ Pharma's ropivacaine ReadyfusOR and two other ready-to-use infusion pharmaceutical candidates. (Aug.)

ReadyfusOR is BioQ's single-use, point-of-care drug infusion device, which is pre-filled with a generic drug by the manufacturer; in this deal, 0.2% ropivacaine, an opioid-free post-surgical pain management therapy. Activated by a single touch, ReadyfusOR is designed to provide safer and more efficient drug delivery (at a lower cost) than fillable pain pumps. Ropivacaine ReadyfusOR was approved by Australia's Therapeutic Goods Administration in March 2017 for post-surgical pain in adults via continuous peripheral nerve block and continuous wound infiltration. Under separate previous deals, ropivacaine ReadyfusOR is already marketed by BioQ partners including Sandoz (US), Cipla (EU and India), Lee’s Pharm (China and Taiwan) and Lunatus (certain Gulf countries). Although the two other product candidates included in the current deal weren’t disclosed, BioQ's post-surgical pain and anesthesia pipeline has the short-acting general anesthetic agent propofol (for which the regulatory process has begun) as well as a pipeline of anesthesia/sedation (AS#2), antibiotic (AB#1), and oncology (OD#1 and OD#2) infusion candidates. The Stada Australia subsidiary, which was established in March 2012, already markets Parkinson's disease drug Movapo (apomorphine hydrochloride), which was launched in Australia and New Zealand last year. The addition of BioQ's ropivacaine and other possible products in anesthesia and sedation will enhance the division's CNS offerings.

Boston Pharmaceuticals Inc.

Daiichi Sankyo Co. Ltd.

Daiichi Sankyo Co. Ltd. granted Boston Pharmaceuticals Inc. global rights to develop, manufacture, and sell its late-preclinical-stage RET inhibitor DS5010 for solid tumors. (Aug.)

Boston Pharmaceutical paid undisclosed money up front and is responsible for development, regulatory, and sales milestones, plus royalties. The partners will work together to complete preclinical studies to support an IND filing, after which point Boston will take over further development activities. The company gains its fifth drug development project through the deal. Established in late 2015 and funded with a $600mm Series A round, the firm’s business model sees it taking on early-stage drug programs, developing from IND through early Phase II, and out-licensing or selling for remaining development and commercialization.

Bristol-Myers Squibb Co.

IFM Therapeutics

IFM Therapeutics LLC

IFM Therapeutics LLC granted Bristol-Myers Squibb Co. a right of first refusal on its preclinical NLR protein 3 (NLRP3) antagonist program in inflammatory diseases and fibrosis. (Aug.)

IFM Therapeutics LLC is a new company to be spun off from IFM Therapeutics, which BMS acquired in a transaction worth $300mm up front, announced concurrently with the licensing agreement. Upon closing that takeover, BMS will pay IFM Therapeutics LLC an up-front fee as part of the alliance, and is also scheduled to make a future investment in IFM Therapeutics LLC. BMS is buying IFM Therapeutics for the biotech's innate immune system-boosting cancer drug candidates, while IFM Therapeutics LLC will retain 17 employees, related facilities, and preclinical small-molecule NLRP antagonists in multiple diseases including liver fibrosis/NASH, inflammatory bowel disease, and gout.

Cardurion Pharmaceuticals LLC

Takeda Pharmaceutical Co. Ltd.

Takeda Pharmaceutical Co. Ltd. and start-up Cardurion Pharmaceuticals LLC teamed up to develop next-generation therapies for heart failure and other cardiovascular diseases. (Aug.)

Cardurion was formed earlier this year by former Merck executives Daniel Bloomingfield, MD (Cardurion's CEO), and Michael Mendelsohn, MD, and through the deal with Takeda takes on a pipeline of preclinical cardiovascular disease candidates. In addition to out-licensing the projects, Takeda is also providing a 12-person research team as well as fully equipped lab space and additional resources. (The research team comes from Takeda’s Shonan, Japan site, which is also where Massachusetts-based Cardurion has set up R&D space.)

CellAct Pharma GMBH

Mundipharma International Corp. Ltd.

Mundipharma EDO GMBH

Mundipharma International Corp. Ltd. licensed global rights to CellAct Pharma GMBH’s etoposide prodrug CAP7.1, which is in Phase II trials for biliary tract cancer. (Aug.)

The companies note that the total potential deal value could exceed $250mm, and that CellAct is eligible for a double-digit up-front payment, milestones, and double-digit sales royalties. CAP7.1 was originally discovered at Charité-Universitätsmedizin Berlin, which will also receive sales-related milestones. Mundipharma’s oncology subsidiary Mundipharma EDO GMBH (EDO) will advance the candidate into Phase III trials and reformulate it for manufacturing scale-up. Biliary tract cancer is the second most common hepatobiliary cancer; CAP7.1 showed efficacy as a second-line treatment for the disease, exhibited through tumor shrinkage and an increase in one-year survival rates. It is metabolized into an active form by enzymes found in the GI tract that are mainly active in tumor cells, resulting in a more focused release of the agent directly to the cancer site. EDO adds CAP7.1 to a pipeline that includes three other projects: EDOS101 for solid and blood tumors; EDOB776, an antibody-drug conjugate for ovarian cancer; and EDOB278, an ADC for various solid cancers.

Cerecor Inc.

Johnson & Johnson

Janssen Pharmaceuticals Inc.

Janssen Pharmaceuticals Inc. acquired Cerecor Inc.'s CERC501 for $25mm up front ($3.75mm was put in a 12-month escrow to secure future indemnification obligations). (Aug.)

Cerecor is also eligible for $20mm in milestones tied to the FDA filing and approval. Janssen will take over clinical development activities and commercialize the drug. CERC501 is a Phase II oral kappa opioid receptor antagonist for major depressive disorder and substance abuse (nicotine, alcohol, and cocaine). The compound was originated at Eli Lilly. Cerecor received exclusive global rights under an early 2015 agreement. Cerecor divested the asset to focus on its other CNS programs--Phase II CERC301 for depression, preclinical CERC611 for epilepsy, and preclinical CERC406 for depression.

Cheplapharm Arzneimittel GMBH

Orexigen Therapeutics Inc.

Orexigen Therapeutics Inc. granted Cheplapharm Arzneimittel GMBH rights to commercialize and distribute the obesity drug Mysimba (naltrexone HCl/bupropion HCl prolonged release) in Germany, France, and Austria. (Aug.)

Cheplapharm is responsible for all commercialization activities and related expenses. Orexigen will supply Mysimba tablets for a negotiated transfer price. The drug is sold in other parts of the world as Contrave. This is Orexigen's third Mysimba out-licensing deal this year. In March Navamedic got rights in Scandinavia and in May Bruno Farmaceutici received rights in Italy.

Dermira Inc.

Roche

Genentech Inc.

Roche and its Genentech Inc. division licensed Dermira Inc. exclusive global development and commercialization rights to their Phase II antibody lebrikizumab. (Aug.)

Dermira is no stranger to Big Pharma's cast-offs. Last year the company received options to license worldwide rights to three Takeda dermatology candidates in exchange for an equity stake. And several months back, in May, Dermira netted $278mm in a convertible debt offering, planning to use the proceeds for a new in-licensing deal, possibly Roche's. In the current alliance, Dermira pays $80mm up front plus $55mm in additional fees in 2018 ($25mm 30 days after September 15, 2018, or when 50% of patients are enrolled in the first Phase II study, whichever comes first; and $30mm 30 days after December 15, 2018, or when enrollment for Phase II reaches 100%, whichever comes first). In addition, the company is responsible for up to $1.275bn milestones: $40mm 30 days after the start of the first Phase III study; $210mm for regulatory and first commercial sale milestones (consisting of $50mm for when regulatory applications are filed in certain territories, and $160mm for the first commercial sale); and $1.025bn in milestones tied to sales reaching $250mm-3bn (except for interstitial lung disease). Further, Dermira will pay royalties ranging in the high single-digits up to the high teens should sales exceed $3bn. In the near-term period, Roche will be in charge of manufacturing and supply. Under the new deal, Dermira grabs ahold of lebrikizumab in the moderate-to-severe atopic dermatitis indication, plus other undisclosed conditions except for interstitial lung diseases, including idiopathic pulmonary fibrosis (to which Roche retains exclusive development and promotion rights). Roche also has certain rights to use lebrikizumab in internal research and for in vitro diagnostic purposes. The Big Pharma had been developing the antibody for asthma but discontinued studies due to mixed results in Phase III. Dermira plans to start a Phase IIb dose-ranging trial, including evaluating a loading dose and higher-dose regimens, in atopic dermatitis in Q1 2018. The company is experienced in dermatology and its pipeline contains several candidates for plaque psoriasis, primary axillary hyperhidrosis, and acne vulgaris. Lebrikizumab targets interleukin 13 and works by preventing bronchial epithelial cells from secreting a protein called periostin, which is believed to correlate with disease severity in conditions such as atopic dermatitis. In terms of competition in the class, Leo Pharma is the only other company with an IL13 antagonist (tralokinumab) in development for atopic dermatitis, and is slightly ahead in the pipeline at Phase III (Leo licensed tralokinumab from AstraZeneca in 2016). Investment Banks/Advisors: Leerink Partners LLC (Dermira Inc.)

Eli Lilly & Co.

Topas Therapeutics GMBH

Topas Therapeutics GMBH and Eli Lilly & Co. Inc. penned a multi-year deal to generate new drug candidates based on antigen-specific tolerance induction. The companies will focus on treatments for autoimmune diseases and/or inflammation. (Aug.)

Financial details were not disclosed except that Topas is eligible for R&D funding, milestones, and royalties. The company spun out of Evotec in early 2016 to develop compounds using its nanoparticle technology, which targets autoimmune and inflammatory diseases through induction of antigen-specific immune tolerance in the liver using peptide-loaded nanoparticles targeted towards liver sinusoidal endothelial cells (LSECs). Topas will conduct preclinical proof-of-principle studies with Lilly, and Lilly has an option to license all resulting candidates.

Encore Dermatology Inc.

Dr. Reddy's Laboratories Ltd.

Promius Pharma LLC

Dr. Reddy’s Laboratories Ltd.'s Promius Pharma LLC licensed Encore Dermatology Inc. US development, manufacturing, and commercialization rights to its DFD06 topical cream for psoriasis. (Aug.)

Encore will provide milestones up to $32.5mm plus fixed royalties on net sales. DFD06, a topical high-potency steroid, is in Phase III for moderate-to-severe plaque psoriasis. Encore expects an NDA filing and approval later this year. DFD06 adds a psoriasis candidate to Encore's portfolio of marketed prescription dermatology therapeutics, including Tridesilon (desonide), a low-potency corticosteroid for inflammation and pruritus associated with dermatoses; HylatopicPlus cream or lotion for various types of dermatoses; and Tetrix nonsteroidal cream for eczema. Encore acquired the Hylatopic and Tetrix brands from Valeant in 2015.

Ethris GMBH

AstraZeneca PLC

MedImmune LLC

AstraZeneca PLC and its MedImmune LLC division joined forces with mRNA firm Ethris GMBH to discover and develop immunogenic modified RNA therapies for respiratory diseases. (Aug.)

Over the course of the five-year deal, MedImmune and its IMED unit will have exclusive access to Ethris’ SNIM RNA technology, a nucleic acid platform based on stabilized non-immunogenic mRNA. SNIM RNAs overcome innate instability of mRNA and evade the innate immune system as a result of chemical modifications. The technology can be targeted to the lungs to replace, inhibit, or supplement proteins involved in disease development and progression. AZ/MedImmune will focus on development of treatments for conditions including asthma, COPD, and idiopathic pulmonary fibrosis. Ethris gets €25mm ($29.4mm) up front, and could receive additional development milestones and sales royalties. AZ and MedImmune retain options for exclusive global rights to therapies discovered under the deal.

Hikma Pharmaceuticals PLC

Takeda Pharmaceutical Co. Ltd.

Takeda Pharmaceutical Co. Ltd. granted Hikma Pharmaceuticals PLC exclusive rights to manufacture and market a selection of its diabetes and cardiovascular products in the MENA (Middle East and North Africa) region. (Aug.)

The deal expands upon an earlier agreement in which Hikma had rights to sell Takeda’s pain and inflammation drug Xefo (lornoxicam) in just Saudi Arabia and Jordan; those rights now expand to the entire MENA area. Hikma also gains the Type II diabetes products Vipedia (alogliptin) (excluding Egypt), Vipdomet (alogliptin/metformin), and Incresync (alogliptin/pioglitazone); hypertension therapies Edarbi (azilsartan) and Edarbyclor (azilsartan/chlorothalidone); and Dexilant (dexlansoprazole) for gastroesophageal reflux disease (GERD). (Dexilant rights exclude Saudi Arabia, the United Arab Emirates, and Egypt).

HitGen Ltd.

Leo Pharma AS

Under a multi-year agreement, HitGen Ltd. and Leo Pharma AS will partner to discover small-molecule leads for multiple dermatology targets. (Aug.)

Using HitGen's drug discovery platform--which is based on compounds screened and synthesized from a DNA-encoded chemically diverse library of more than 85 billion compounds--the partners will pursue multiple therapeutic targets of interest to Leo, which will exclusively license the leads in exchange for an up-front fee and milestone payments to HitGen. Through the deal, Leo enhances it dermatology pipeline, which already includes compounds for inflammatory skin diseases, actinic keratosis, psoriasis, and atopic dermatitis. The company's Kyntheum (brodalumab) for the treatment of moderate-to-severe plaque psoriasis just received EU regulatory clearance last month and is already approved in the US and Japan.

ImmunoGen Inc.

Jazz Pharmaceuticals PLC

ImmunoGen Inc. granted Jazz Pharmaceuticals PLC options to license exclusive global rights to up to three antibody-drug conjugates in development for blood cancers. (Aug.)

Jazz paid $75mm up front, and will pay an additional $100mm in development funding over the next seven years. The company can exercise its opt-in rights up to the filing of a BLA, at which time it will pay an exercise fee ranging from mid-double-digit millions (if exercised prior to a pivotal study) to low-triple-digit millions (prior to BLA filing). It will also be responsible for undisclosed regulatory milestone payments, and tiered sales royalties ranging from the mid-single digits to the low-20s (Strategic Transactions estimates 4-23%). Included in the deal are Phase I CD33-targeting ADC IMGN779 for acute myelogenous leukemia and myelodysplastic syndrome; preclinical IMGN632, targeting CD123 for AML, myelodysplastic syndrome, and B-cell lymphoma; and a third project that will be designated later. After Jazz opts in, the companies will share costs related to development and regulatory activities in the US and EU. ImmunoGen retains the right to co-promote up to two products in the US under a profit sharing agreement that would supersede Jazz’s milestone and royalty obligations.

Isogenica Ltd.

Takeda Pharmaceutical Co. Ltd.

Isogenica Ltd. granted Takeda Pharmaceutical Co. Ltd. rights to use its llamdA (llama domain antibody) libraries of synthetic camelid single-domain antibodies (VHH) in its drug discovery efforts. (Aug.)

Takeda paid money up front, and is responsible for annual license fees. In addition, should any of the antibodies it discovers using Isogenica’s libraries progress into development stages, Isogenica could receive more license fees, milestones, and sales royalties. The llamdA platform is designed using the Colibra library construction system, which enables the examination of libraries in multiple formats, including Isogenica’s cell-free in vitro display technology, for optimal functional diversity.

Metacrine Inc.

Novo Nordisk AS

Metacrine Inc. is partnering its fibroblast growth factor 1 (FGF1) variants with Novo Nordisk AS. (Aug.)

In preclinical studies, FGF1 demonstrated its ability to lower glucose and improve insulin sensitization. Therefore the compounds have potential for treating diabetes and conditions related to insulin resistance. Metacrine will continue developing the FGF1 variants and perform protein engineering activities to enhance its pharmaceutical properties. Metacrine granted Novo Nordisk an option to license the FGF1 program should certain research milestones be attained. Metacrine chose Novo Nordisk as a partner because it is a leading player in the diabetes space.

Mylan NV

Otsuka Holdings Co. Ltd.

Otsuka Pharmaceutical Co. Ltd.

Otsuka Pharmaceutical Co. Ltd. licensed Mylan NV exclusive rights to commercialize Deltyba (delamanid) for adults with pulmonary multidrug-resistant tuberculosis (MDR-TB) in South Africa and India. (Aug.)

The deal could be expanded to including additional low- and middle-income countries where Otsuka isn't currently selling the drug, and the companies may choose to enter into discussions and feasibility studies for a technology transfer plan that would eventually allow Mylan to manufacture and distribute Deltyba in those territories. According to the World Health Organization, South Africa and India have the most cases of MDR-TB and TB/HIV co-infection. Deltyba is already approved in India and registration is in progress in South Africa. Otsuka already sells the drug in Japan. Just last month Otsuka licensed R-Pharm rights to manufacture and distribute Deltyba in Russia and CIS countries.

Novartis AG

Xoma Corp.

Xoma Corp. licensed Novartis AG exclusive worldwide rights to gevokizumab (XOMA052), an anti-interleukin-1 beta (IL-1b) allosteric monoclonal antibody. Novartis also secured nonexclusive rights to Xoma's intellectual property related to IL-1b-targeting antibodies in cardiovascular disease. (Aug.)

In exchange for rights to the gevokizumab program and other IL-1 beta antibodies that arise within cardiovascular diseases, for which Novartis has sole development and commercialization responsibilities, the Big Pharma pays $21mm up front (including $16mm in cash and the purchase of $5mm in Xoma equity (539k shares at $9.27, a 24% premium)); up to $438mm in development, regulatory, and commercialization milestones; plus tiered high-single- to mid-double-digit royalties (Strategic Transactions estimates 7-50%) on net sales of gevokizumab. Novartis also agreed to repay the €12mm ($14mm) in debt owed by Xoma to Servier SA under a separate 2010 loan, which reduces Xoma's outstanding debt by 50%. In addition, Novartis will extend the maturity date from September 2020 to September 2022 on the remaining principal balance ($14.1mm as of December 2016) Xoma owes Novartis under a May 2005 secured note agreement. Xoma's gevokizumab--formerly developed in collaboration with Servier under a 2011 agreement--is a Phase II mAb that binds strongly to the IL-1b cytokine and modulates the activation of the IL-1 receptor, which prevents the cellular signaling that produces inflammation involved in cardiometabolic and inflammatory diseases. The Servier deal, which was worth a potential $885mm, was terminated in late 2015 after a Phase III failure in an orphan eye disease indication. After that, Xoma stopped all development on the compound to shift its focus to other pipeline candidates in metabolic diseases. The current tie-up gives the biotech renewed hope in the gevokizumab program and fits in with Xoma's business strategy to generate substantial milestones and royalty income from its partnered programs. Under the nonexclusive IP license portion of this deal, Novartis pays $10mm up front as well as low-single-digit royalties (assumed to be 1-3%)--which could rise to the mid-single-digit range (4-6%) if Novartis exercises an option to convert to an exclusive license)--on sales of Novartis' own IL-1b mAb Ilaris (canakinumab; ACZ885) within cardiovascular indications. Already sold for cryopirin-associated periodic syndromes, Ilaris is also in Phase III for atherosclerosis, with a 50% likelihood of approval (3% above average), according to Biomedtracker. Under a 2015 collaboration, Novartis has worldwide rights to Xoma's preclinical anti-TGFb cancer antibody XOMA089 (for which it could pay up to $517mm), and through a revamped 2004 deal, a CD40-targeted antibody (HCD122; now in Phase II for blood cancers). Novartis, in fact, accounted for 67% of Xoma's 2015 revenues.

Prometic Life Sciences Inc.

Prometic ChinaCo

Prometic Life Sciences Inc. and Shenzhen Royal Asset Management Co. Ltd. (SRAM) created a joint venture, Prometic ChinaCo, which will develop, manufacture, and sell three of Prometic’s pulmonary and liver fibrosis candidates in China. (Aug.)

The joint venture was formed following a memorandum of understanding originally disclosed in March. Under terms of the arrangement, SRAM will make an initial $23mm investment in the JV for 17% ownership. Another $10mm is payable in 2018 following achievement of undisclosed milestones, after which point SRAM’s stake will increase to 25% and Prometic will hold 75%. Prometic ChinaCo gains control in China of PBI4050, in Phase II for pulmonary and liver fibrosis, though ChinaCo will focus on the candidate’s implications for diabetic kidney disease. It will also develop preclinical PBI4547 for diabetic nephropathy, and preclinical PBI4425 for scleroderma. Prometic and SRAM expect the JV to enter into licensing and development agreements to further the progress of all three candidates.

Samsung Electronics Co. Ltd.

Samsung BioLogics

Samsung Bioepis Co. Ltd.

Takeda Pharmaceutical Co. Ltd.

Samsung Bioepis Co. Ltd., a joint venture formed by Samsung BioLogics and Biogen Inc., and Takeda Pharmaceutical Co. Ltd. entered an agreement to co-fund and co-develop biologics for diseases of unmet need. (Aug.)

The partners will initially focus on severe acute pancreatitis, through development of Takeda’s preclinical TAK671. Additional disease areas and financial details were not disclosed. Samsung Bioepis traditionally develops biosimilars, with six in its coffers for immunology, cancer, and diabetes indications. (It has already launched biosimilars of etanercept and infliximab, while its biosimilar of adalimumab just gained European approval and trastuzumab is pending.) The deal with Takeda helps steer the company in the direction of new drug R&D through joint development, helping Bioepis avoid risk that would otherwise come with an in-licensing partnership.

SePro Corp.

ParaPro LLC

RedHill Biopharma Ltd.

SePro Corp.

ParaPRO LLC licensed RedHill Biopharma Ltd. exclusive rights to promote esomeprazole strontium delayed-release capsules (49.3mg) to gastroenterologists in the US. (Aug.)

The agreement carries an initial term of three years and does not include up-fronts or milestones. Instead, the companies will share any revenues based on an agreed upon split. FDA-approved esomeprazole strontium is a proton pump inhibitor used for treating GI conditions including gastroesophageal reflux disease and gastric ulcer. It's also indicated for H. pylori eradication to reduce the risk of duodenal ulcer and for pathological hypersecretory conditions, including Zollinger-Ellison syndrome. RedHill will promote the drug using its 40-strong sales team which currently sells its other GI treatments Donnatal for irritable bowel syndrome and acute enterocolitis and EnteraGam for chronic diarrhea.

Financings

Aclaris Therapeutics Inc.

Aclaris Therapeutics Inc. (aesthetic dermatology) netted $70.5mm through the public offering of 3.26mm shares at $23.02. The company will use most of the proceeds to fund commercialization activities for its A101 (hydrogen peroxide) 40% topical solution for seborrheic keratosis. Earlier this year, Aclaris submitted an NDA (which has a PDUFA target action date of December 24, 2017) to the FDA and an MAA to the Medicines Product Agency (covering 16 countries in the EU). The company will put some proceeds toward R&D of its other pipeline candidates, which include compounds for warts, alopecia areata, vitiligo, and androgenetic alopecia. Aclaris recently acquired private kinase inhibitor-focused biotech Confluence Life Sciences for up to $100mm to expand its JAK inhibitors in dermatology. (Aug.)

Investment Banks/Advisors: Guggenheim Partners LLC; JMP Securities LLC; Jefferies & Co. Inc.; Leerink Partners LLC; William Blair & Co.

Agile Therapeutics Inc.

Women's health company Agile Therapeutics Inc. (transdermal patch contraceptives) netted $18.8mm through the public offering of 5.33mm shares at $3.75. The company will use the proceeds to pursue regulatory approval, scale-up third party manufacturing operations, and fund commercialization activities for Twirla (ethinyl estradiol/ levonorgestrel), its once-weekly prescription contraceptive patch. Agile received a complete response letter in 2013 with the FDA recommending a new trial for Twirla. The company announced Phase III top-line safety and efficacy data in January 2017, re-submitted an NDA under the 505(b)(2) pathway in June, and expects approval by year-end. (Aug.)

Investment Banks/Advisors: Cantor Fitzgerald & Co.; Janney Montgomery Scott Inc.; Noble Financial Capital Markets; RBC Capital Markets; William Blair & Co.

Altimmune Inc.

Infectious disease-focused Altimmune Inc. netted $13.7mm through the private placement of 15,656 Series B convertible preferred shares (convertible into 5.86 common shares) and five-year warrants to buy 2.35mm common shares at an exercise price of $2.67. The preferred stock and warrants were sold together at $940 to investors including Novartis US, HealthCap, and Truffle Capital. Piper Jaffray was the placement agent. In May, Altimmune completed its reverse merger with PharmAthene. The combined company retained the Altimmune Inc. name and has commenced trading on the Nasdaq. (Aug.)

Investment Banks/Advisors: Piper Jaffray & Co.

Atreca Inc.

Atreca Inc. (cancer immunotherapies) raised $35mm through an oversubscribed Series B round. Wellington Management Co. and an undisclosed returning backer co-led the round and were joined by new investor Cormorant Asset Management and additional first-time and existing buyers. Funds will support development of Atreca's oncology candidates which were designed using the company's Immune Repertoire Capture technology. (Aug.)

Bavarian Nordic AS

Johnson & Johnson's Johnson & Johnson Development Corp. purchased $32.8mm (DKK207.5mm) new Bavarian Nordic AS stock in a private placement of 512,102 shares priced at $64.18. As a result, JJDC now holds 1,844,086 shares in Bavarian Nordic corresponding to 5.77% of the share capital and voting rights. The financing is part of a concurrent deal between Bavarian Nordic and J&J's Janssen Pharmaceuticals Inc. subsidiary in which Janssen received exclusive global rights to use MVA-BN technology to develop vaccines for hepatitis B virus and HIV. (Aug.)

BeiGene (Beijing) Co. Ltd.

BeiGene (Beijing) Co. Ltd. (immuno-oncology) netted $164.5mm through the public sale of 2.47mm American Depositary Shares (representing 32mm ordinary shares) priced at $71 per ADS. Some of the funds will support ongoing and planned global trials with BGB3111 (BTK inhibitor for B-cell lymphomas); BGBA317 (PD-1 inhibitor for solid and blood cancers); and BGB290 (PARP1/PARP2 inhibitor for solid tumors). (Aug.)

Investment Banks/Advisors: Cowen & Co. LLC; Goldman Sachs & Co.; Morgan Stanley & Co.; Robert W. Baird & Co. Inc.; William Blair & Co.

Citius Pharmaceuticals Inc.

Citius Pharmaceuticals Inc. (therapies for cancer and infectious diseases) netted $6.3mm through a public offering of 1.65mm common shares at $4.125 each. The company also sold five-year warrants to buy the same number of shares at the offering price. Citius plans to use the proceeds for Phase III trials of its Mino-Lok for catheter-related bloodstream infections, and a Phase IIb study of hydrocortisone-lidocaine cream for hemorrhoids. (Aug.)

Investment Banks/Advisors: Aegis Capital Corp.; Dawson James Securities Inc.

Clementia Pharmaceuticals Inc.

Canada-based Clementia Pharmaceuticals Inc. netted $128.2mm in its initial public offering of 9.19mm common shares (including the overallotment) priced at $15 each on the Nasdaq. (Aug.)

Investment Banks/Advisors: BTIG LLC; Leerink Partners LLC; Morgan Stanley & Co.; Wedbush PacGrow Life Sciences

Coherus BioSciences Inc.

Coherus Biosciences Inc. (biosimilars) secured a $150mm funding commitment from Temasek Holdings, which provided an initial $75mm tranche up front through the purchase of 6.56mm common shares at $11.44 (a 4% discount). Coherus will use the proceeds to complete development and registration of CHS1701 (a pegfilgrastim (Neulasta) biosimilar awaiting approval for febrile neutropenia) and for continued development of other pipeline candidates. The second $75mm tranche could be realized when the FDA approves CHS1701 for marketing in the US. (Aug.)

Dynavax Technologies Corp.

Dynavax Technologies Corp. (immunotherapies for infectious, autoimmune, and inflammatory diseases, and cancer) netted $81mm through the public sale of 5.75mm common shares (including the overallotment) at $15. Some of the funds will support the anticipated approval and US market launch of the company's hepatitis B vaccine HEPLISAV-B, as well as continued development of cancer immunotherapies in the company's pipeline. (Aug.)

Investment Banks/Advisors: Cantor Fitzgerald & Co.; Cowen & Co. LLC; RBC Capital Markets; William Blair & Co.

Esperion Therapeutics Inc.

Esperion Therapeutics Inc. (cardiovascular disease treatments) netted $142.8mm through the public offering of 3.1mm common shares at $49. The company will use the proceeds to fund the ongoing CLEAR cardiovascular outcomes trial in patients with hypercholesterolemia and with atherosclerotic cardiovascular disease; to support NDA and MAA activities and eventual commercialization of the LDL-C-lowering indications for Phase III candidates bempedoic acid and bempedoic acid with ezetmibe; and to initiate development of a reformulated bempedoic acid tablet for NASH. (Aug.)

Investment Banks/Advisors: JMP Securities LLC; Jefferies & Co. Inc.; Needham & Co. Inc.; Stifel Nicolaus & Co. Inc.; UBS Investment Bank

FibroGen Inc.

FibroGen Inc. (developing therapies for anemia, fibrotic disease, and cancer) netted $309.7mm through a follow-on offering of 8mm common shares at $40.75 each. The company will use some of the funds for ongoing development of its Phase II pamrevlumab for fibrosis and related diseases; R&D activities; manufacturing; and regulatory submissions. (Aug.)

Investment Banks/Advisors: Citigroup Inc.; Goldman Sachs & Co.; Leerink Partners LLC

Innoviva Inc.

Just two weeks after raising $192.5mm through a convertible debt sale, Innoviva Inc. (respiratory therapies) closed a $250mm Term B loan that matures in August 2022, bears interest at a rate equal to LIBOR plus 4.5%, and requires a 10% minimum annual principal repayment. The company will use the proceeds to refinance its 9.0% fixed rate term notes due 2029. (Aug.)

Investment Banks/Advisors: Merrill Lynch Pierce Fenner & Smith Inc.; Morgan Stanley & Co.

Innoviva Inc.

Respiratory-focused Innoviva Inc. (formerly Theravance) raised $192.5mm (including full exercise of the $17.5mm over-allotment option) through the sale of 2.50% convertible senior notes due 2025. The notes convert into common at a rate of 57.9240 shares per $1k principal amount, or $17.26 per share. (The company's stock averaged $13.18 at the time of the sale.) The debt was sold in connection with Innoviva's previously announced plan to fully refinance its 9.0% fixed rate term notes due 2029. The company will use some of the proceeds to redeem on August 15, 2017 a portion of the principal outstanding under the 2029 notes and repurchase $17.5mm in common shares. (Aug.)

Intec Pharma Ltd.

Israeli drug delivery firm Intec Pharma Ltd. netted $46.9mm in a public offering of 10.63mm ordinary shares at $4.70. The company will mostly use the proceeds to support a Phase III clinical trial for lead compound Accordion Pill carbidopa/levodopa to treat symptoms of advanced Parkinson's disease. Using a gastric retention mechanism to increase the time a drug is retained in the stomach, Intec's Accordion Pill delivery system is designed to improve safety, efficacy, and solubility of existing oral drugs and reduce the daily dosage amount. (Aug.)

Investment Banks/Advisors: Maxim Group LLC; Oppenheimer & Co. Inc.; Roth Capital Partners

Jazz Pharmaceuticals PLC

Jazz Pharmaceuticals PLC (neurology and hematology/oncology therapies) sold $500mm of its 1.50% senior notes to qualified institutional investors. The notes mature on August 15, 2024 and convert to common at a rate of 4.5659 shares per $1k principal amount, or $219.02 per share. (The market average was $147.77 at the time of the transaction.) Proceeds will be used to repay existing debt and support general business activities. (Aug.)

Kiadis Pharma Netherlands BV

Kiadis Pharma Netherlands BV (cell-based immunotherapies) entered into a €15mm ($17.6mm) debt facility with Kreos Capital, the proceeds of which will be used to support development of the company's allodepleted T-cell immunotherapy ATIR101 (to prevent graft-vs-host disease in blood cancer patients who undergo allogeneic hematopoietic stem cell transplantation) and repay existing debt. Kiadis drew down a first tranche of €10mm immediately (bears interest at 10% for 45 months), and can draw down the remaining €5mm (interest at 10% for 48 months) if it raises €20mm in additional funds. (Aug.)

Kura Oncology Inc.

Kura Oncology Inc. (precision cancer treatments) netted $47mm through a public offering of 7.7mm common shares at $6.50. The company had originally intended to sell 5.3mm shares. Proceeds will support pipeline development, including Phase II trials of lead candidate tipifarnib for HRAS-mutant solid tumors, peripheral T-cell lymphoma, myelodysplastic syndromes, and chronic myelomonocytic leukemia. (Aug.)

Investment Banks/Advisors: Cowen & Co. LLC; JMP Securities LLC; Leerink Partners LLC; Oppenheimer & Co. Inc.

MyoKardia Inc.

Cardiovascular therapeutics developer MyoKardia Inc. netted $134.3mm through the follow-on sale of 4.03mm common shares (including full exercise of the overallotment) at $35.50 each. The company will use the funds for R&D activities including ongoing development of Phase II mavacamten (formerly MYK461) for hypertrophic cardiomyopathy and Phase I MYK491 for dilated cardiomyopathy. (Aug.)

Investment Banks/Advisors: BMO Financial Group; Cowen & Co. LLC; JP Morgan & Co.; Wedbush PacGrow Life Sciences

NicOx SA

French ophthalmic firm Nicox SA raised €26.25mm ($31mm) from the sale of 3.5mm new ordinary shares priced at €7.50 each (a 33% discount) to undisclosed investors to support R&D activities. (Aug.)

Omeros Corp.

Omeros Corp. netted $63.87mm in a public offering of 3mm shares at $22.75. The company will use some of the proceeds to fund continued R&D for its OMS721 candidate for lectin pathway disorders, including atypical hemolytic uremic syndrome and IgA nephropathy (Phase III) and lupus nephritis, renal diseases, and hematopoietic stem-cell transplant-related thrombotic microangiopathies (Phase II). Omeros will also use some of the money for preclinical studies and clinical trials of other compounds in its pipeline and to fund manufacturing, development, and regulatory costs associated with advancing its candidates. (Aug.)

Investment Banks/Advisors: Cantor Fitzgerald & Co.; HC Wainwright & Co.; Maxim Group LLC

Protalix BioTherapeutics Inc.

Protalix BioTherapeutics Inc. (protein therapies for metabolic conditions) raised $10mm through the private placement of 7.50% senior secured convertible notes due 2021. The initial conversion rate will be 1,176 common shares per $1k principal amount of notes, equivalent to an initial conversion price of $0.85 per share. (Protalix's stock averaged $0.78 at the time of the sale.) The company concurrently entered into an agreement with existing noteholders to exchange $9mm principal amount of Protalix's outstanding 4.50% senior convertible notes due 2018 for $8.55mm in newly issued 4.50% senior secured convertible notes due 2022 and approximately 23.8mm common shares. (Aug.)

Radius Health Inc.

Radius Health Inc. (treatments for osteoporosis, cancer, and endocrine diseases) netted $291mm through a public sale of its 3% senior notes due 2024. The notes covert to common at a rate of 20.4891 shares per $1k principal amount, or $48.81 per share. (The company's stock averaged $42.93 at the time of the sale.) Funds will support US commercial launch of Tymlos (abaloparatide) injection for post-menopausal osteoporosis, and will also be used for ongoing development activities. (Aug.)

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

Spark Therapeutics Inc.

Spark Therapeutics Inc. (gene therapies) netted $380.4mm in a follow on public offering of 5.3mm common shares (including full exercise of the 690k overallotment option) at $76. The company will use the offering proceeds to fund future clinical trials; for manufacturing and commercialization activities; and for potential future acquisitions or licensing opportunities. (Aug.)

Investment Banks/Advisors: Cowen & Co. LLC; Goldman Sachs & Co.; JP Morgan & Co.

Zealand Pharma AS

Zealand Pharma AS (peptide-based medicines focused on metabolic and gastrointestinal diseases) netted $75.3mm in its US initial public offering of 4.5mm American Depository Shares (ADS; representing 4.5mm common shares; includes full exercise of 156.3k over-allotment shares) at $17.87 on the Nasdaq Global Select market. The company will be listed under the ticker symbol ZEAL. (Aug.)

Investment Banks/Advisors: Goldman Sachs & Co.; Guggenheim Partners LLC; Morgan Stanley & Co.; Needham & Co. Inc.

RESEARCH, ANALYTICAL EQUIPMENT & SUPPLIES

Financings

Thermo Fisher Scientific Inc.

Thermo Fisher Scientific Inc. netted $1.5bn in a follow-on public offering through the sale of 8.8mm common shares at $171. The company will use the offering proceeds to pay for a portion of its acquisition of Patheon NV. (Aug.)

Investment Banks/Advisors: BNP Paribas Securities Corp.; BNY Associates; BTIG LLC; Bank of America Merrill Lynch; Barclays Bank PLC; Citigroup Inc.; Credit Suisse Group; Deutsche Bank AG; Goldman Sachs & Co.; HSBC; ING Bank NV; KeyBanc Capital Markets; SMBC Nikko Securities Inc.; Wells Fargo Securities LLC