There were few life sciences deals of note the third week of November, capping several weeks of major activity in the sector. Among the big pharmaceutical players, Bristol-Myers Squibb announced that it would spin off its Mead Johnson Nutrition business, which is best known as a maker of infant formula. Bristol-Myers currently has an 85 percent stake in the company, which had an initial public offering at the beginning of 2009 that raised $828 million. With the planned spinoff, Bristol-Myers is staking its future on biopharmaceuticals, whereas many of its competitors are diversifying into other areas such as animal health, consumer health, eye care, and generics.

 

In one of the major deals of the week, Nabi Biopharmaceuticals and GlaxoSmithKline Biologicals signed a nicotine addiction vaccine agreement. Under the terms of the agreement, GSK will pay Nabi an upfront fee of $40 million for an option to exclusively in-license NicVAX, Nabi's nicotine conjugate candidate vaccine for the treatment of nicotine addiction, on a worldwide basis and a license to develop follow-on next-generation nicotine vaccines using Nabi's intellectual property. Besides the upfront fee, Nabi will be eligible to receive more than $500 million in option fees and regulatory, development and sales milestones for NicVAX and follow-on nicotine vaccines. Nabi will also receive double-digit royalties on global sales of NicVAX should GSK exercise its option as well as royalties on global sales of next generation nicotine vaccines. NicVAX has recently entered the first of two late-stage clinical trials. Nabi will be responsible for the cost for the phase 3 development of this candidate vaccine. Upon successful completion of the the studies, GSK will take responsibility for further development and commercialisation of NicVAX, if it exercises its option. In parallel with the phase 3 studies, and independent of whether it exercises its option to in-license NicVAX, GSK will be developing a next-generation nicotine vaccine based on Nabi's intellectual property together with GSK's own technology.

 

Global contract research organization PPD expanded its horizons in two deals signed during the week. First the company entered into an agreement with Janssen Pharmaceutica to develop and commercialize two phase 2-ready therapeutic compounds, one to treat diarrhea-predominant irritable bowel syndrome and the other to treat complicated skin and skin structure and respiratory infections. PPD in-licensed the two assets and will advance the compounds through phase 2 development whereupon Janssen will have the option to resume development and commercialization of each compound. In exchange, PPD will receive up to $330 million in clinical and sales milestones and royalties on sales of the compounds if approved for marketing. If Janssen does not buy back a program, PPD will have the option to continue developing and commercializing the compound for that program; and Janssen will receive up to $250 million in clinical and sales milestones and royalties on sales of the compounds if approved for marketing.

 

In the second deal, PPD will acquire drug discovery outsourcing company BioDuro to expand its drug development capabilities in China. Headquartered in the United States, BioDuro operates a state-of-the-art, 110,000-square-foot laboratory in Beijing. Most of its approximately 660 employees are based in China, where it provides deep scientific expertise in medicinal chemistry, biology, pharmacology, drug metabolism, pharmacokinetic and safety services.

 

Biotech company ImmunoGen licensed its maytansinoid targeted antibody payload (TAP) technology to Amgen for the second time in two months to develop anticancer therapeutics to an undisclosed target. Amgen will pay ImmunoGen and upfront payment of $1 million. ImmunoGen is also eligible to receive up to $34 million in milestone payments, and royalties on the sale of any resulting products.

 

French biotech NicOx announced plans to raise $149 million through a variety of methods in preparation for the launch of its anti-inflammatory drug naproxcinod. NicOx will raise an initial 20 to 30 million euros through a private placement with a rights issue to follow as soon as the market is favorable. NicOx will also get approximately $37.5 million from the French government's strategic investment fund, created during the economic downturn to back companies in key industries. In a separate statement, NicOx said that the U.S. Food and Drug Administration had accepted its new drug application for the osteoarthritis treatment with a PDUFA date of July 24, 2010. NicOx plans to submit a marketing application to the European Medicines Agency before the end of 2009.

 

Stem cell company Fate Therapeutics closed a $30 million series B financing led by OVP Venture Partners, with participation by Astellas Venture Management, Genzyme Ventures and a third undisclosed corporate investor. They were joined by the company's earlier investors ARCH Venture Partners, Polaris Venture Partners and Venrock. La Jolla, California-based Fate is applying induced pluripotent stem cell technology in the development its lead Stem Cell Modulator, FT1050, to enhance hematopoietic stem cell proliferation and homing. The small molecule is currently undergoing clinical testing in a phase 1b study in adult patients with hematologic malignancies, such as leukemia and lymphoma, who have undergone nonmyeloablative conditioning therapy and are in need of human stem cell support.

 

Finally, another company joined the IPO queue, this time in Europe. Belgian drugmaker Movetis plans to raise up to $167 million in an initial public offering that will run from November 23 to December 2. Movetis was founded in 2006 as a spin-out from Johnson & Johnson. French venture capital firm Sofinnova Partners and Dutch firm Life Sciences Partners are the lead investors in Movetis. Credit Suisse and KBC Securities are acting as joint global coordinators and joint bookrunners for the IPO. Piper Jaffray is acting as co-manager.

 

The company plans to use the proceeds of the offering to fund the European launch of its Resolor treatment for chronic constipation in women, which gained marketing approval in October. Movetis has the right to commercialize Resolor in Europe, while Johnson & Johnson has the rights for the rest of the world which it kept when the group was spun off.