Global IPOs and several big partnering deals highlighted the first week of December.

Belgian specialty pharma Movetis raised $128 million in a successful IPO on the Euronext Brussels exchange. It ended a two year drought of IPOs in Europe by venture backed companies. Movetis had gained EU approval for its lead compound Resolor in October 2009 for symptomatic treatment of chronic constipation in women in whom laxatives fail to provide adequate relief. Two other companies also announced upcoming IPOs. Russia's Human Stem Cell Institute plans to raise about $4.8 million in an initial offering priced at the lower end of its range, according to the company. The Moscow-based company will offer 15 million shares, or 20 percent of the company. And Brazilian medical services company Fleury said that it plans sell 34.25 million to raise up to $334 million through an IPO. The stock is expected to start trading on the Sao Paulo stock exchange in mid-December under the ticker FLRY3.SA.

 

Vertex Pharmaceuticals completed a secondary offering of 13 million shares, netting the company $500.5 million. The deal was underwritten by Goldman Sachs, Bank of America/Merrill Lynch, JP Morgan Securities, and Morgan Stanley, all of whom exercised their options to buy another 1.5 million shares at the same terms. Vertex has spent the year raising money to beef up its cash reserves as it gets closer to approval and commercialization of telaprevir for hepatitis C. Vertex noted in a regulatory filing that it had $856 million in cash and investments at the end of September.

 

In the biggest deal of the week, long time partners AstraZeneca and Targacept entered into collaboration and license agreement potentially worth $1.24 billion for the global development and commercialization of TC-5214, Targacept’s late-stage investigational product for major depressive disorder (MDD). The drug, which recently completed a phase 2b clinical trial, is a nicotinic channel blocker that is thought to treat depression by modulating the activity of various neuronal nicotinic receptor (NNR) subtypes.

 

Under the terms of the agreement, AstraZeneca will make an upfront payment to Targacept of $200 million upon effectiveness and up to an additional $540 million if specified development, regulatory and first commercial sale milestones are achieved. Targacept will also be eligible to receive up to $500 million if specified sales related milestones are achieved as well as significant stepped double-digit royalties on net sales worldwide. Targacept has retained an option for a co-promotion of TC-5214 to a limited target physician audience in the United States. Burrill & Company, the owner of the Burrill report, is an investor in Targacept.

 

The companies will jointly design a global phase 3 clinical program anticipated to begin in mid 2010 with the goal of filing a new drug application with the U.S. Food and Drug Administration in 2012. AstraZeneca will be responsible for 80 percent of the cost of the initial global development program, with Targacept responsible for the remaining 20 percent. AstraZeneca will fund the costs of global commercialization of TC-5214. The agreement also allows for the possibility of a multi-year research program that would be conducted by Targacept to identify and develop additional NNR Therapeutics for MDD and possibly other indications.

 

Targacept and AstraZeneca previously entered into a global collaboration focused on cognitive disorders in 2005 with three product candidates currently in clinical development; including AZD3480 for attention deficit/hyperactivity disorder, AZD1446 planned for Alzheimer’s disease, and TC-5619, for cognitive dysfunction in schizophrenia.

 

Trellis Bioscience, a privately-held biotech based in South San Francisco, granted MedImmune a worldwide exclusive license to develop and commercialize Trellis' antibodies directed against the respiratory syncytial virus (RSV).
 

Under the terms of the agreement, MedImmune will pay Trellis an upfront cash payment upon signing, as well as additional payments for potential development, regulatory, and commercial milestones. The total payments have the potential to reach $338 million should a product resulting from this licensing agreement reach the market. MedImmune will be responsible for all preclinical and clinical development and commercialization of Trellis’s RSV antibodies worldwide. MedImmune will also pay Trellis royalty payments based on worldwide product sales.

 

The RSV antibodies were discovered using Trellis’ proprietary CellSpot discovery platform, which allows high throughput screening of human B-cells in a multiplexed format, thus enabling rapid identification and isolation of extremely rare human antibodies produced from the B-cells of RSV infected patients.

 

San Diego-based Phenomix granted Italian pharmaceutical company Chiesi rights to develop and commercialize dutogliptin in Europe and additional territories including Brazil, Russia and all other members of the Commonwealth of Independent States, Turkey and Northern Africa. Dutogliptin is Phenomix' proprietary orally administered, small molecule dipeptidyl-peptidase-4 (DPP-4) inhibitor currently undergoing phase 3 clinical development in type 2 diabetes mellitus.

 

Under the terms of the agreement, Chiesi will provide Phenomix with up to $28 million in near-term cash and equity payments and up to $163 million in total payments upon completion of certain development, regulatory and commercialization milestones. Phenomix will also be eligible for royalties on dutogliptin sales. Chiesi will be responsible for product development, regulatory approval and commercialization in its territories.

 

In October 2008, Phenomix and Forest Laboratories entered into a collaboration to co-develop and co-promote dutogliptin in the United States. Forest also has exclusive rights to develop and commercialize dutogliptin in Canada and Mexico.

 

Incyte entered into a potential $1 billion collaboration and license agreement with Novartis for two of its investigational hematology-oncology therapies, and oral JAK1/JAK2 inhibitor in phase 3 development for myelofibrosis, and an oral cMET inhibitor that is about to enter phase 1 development as a potential treatment for several cancers. The deal includes $150 million upfront for Incyte plus an immediate $60 million development milestone to initiate European phase 3 trials of the JAK inhibitor.

 

Finally, Pfizer entered into an agreement with Israeli biotech Protalix Biotherapeutics to develop and commercialize taliglucerase alfa, an enzyme replacement therapy for Gaucher's disease that is derived from genetically engineered carrot cells. Protalix has just successfully completed phase 3 clinical studies and is preparing to file a New Drug Application with the U.S. Food and Drug Administration. The drug has been granted Orphan Drug designation and Fast Track Status.

 

Under the terms of the agreement potentially worth $115 million, Pfizer will receive exclusive worldwide licensing rights for the commercialization of taliglucerase alfa, while Protalix will retain the exclusive commercialization rights in Israel. Pfizer will make an upfront payment of $60 million to Protalix, which will also be eligible to receive additional regulatory milestone payments of up to $55 million. Pfizer and Protalix will share future revenues and expenses for the development and commercialization of taliglucerase alfa on a 60 percent/40 percent basis respectively.