The Burrill Report


Vertex Pharmaceuticals is moving quickly to build on its recent success in obtaining FDA approval for telaprevir, its potential blockbuster drug to treat hepatitis C, now known as Incivek. The company has inked a licensing agreement with Alios BioPharma that it says could help it develop new combination medicines for hepatitis C.

For South San Francisco-based Alios, teaming up with Vertex will put financial muscle and drug development expertise behind its two investigational compounds to fight the hepatitis C virus. “We believe that the Alios nucleotide analogues provide an important opportunity to improve patient care in hepatitis C,” says Lawrence Blatt, founder and CEO of Alios. “Together we have the potential to create an all-oral, interferon-free, combination therapy that could improve the safety, efficacy and ease of administration for patients.”

Under the terms of the agreement, worth potentially $1.5 billion to the privately held biotech, Alios has granted Vertex an exclusive worldwide license to two pre-clinical nucleotide analogues it discovered. The two drug candidates, ALS-2200 and ALS-2158, have been shown to inhibit the hepatitis C virus polymerase, an enzyme essential for replication of the virus. Vertex expects ALS-2200 and ALS-2158 to enter clinical development later this year, both together and in combination with Vertex’s approved and investigational hepatitis C medicines.

Alios gets $60 million upfront and additional research funding while Vertex will assume development costs related to ALS-2200 and ALS-2158. Alios is eligible to receive research and development milestone payments up to $715 million if both compounds are approved. Vertex expects to pay about $35 million in development milestones in 2011. Alios is also eligible to receive up to $750 million in sales milestones on sales of all approved medicines under the collaboration, plus tiered royalties on product sales.

The agreement also includes a research program focused on the discovery of additional nucleotide analogues that act on the hepatitis C polymerase with Vertex retaining the option to select discovered compounds for development. Vertex sees the deal as enabling it to expand its development and commercialization efforts in hepatitis C to areas outside North America in the future.

For Alios BioPharma, the licensing pact with Vertex comes two years after the company closed a $32 million series A financing round by three corporate venture firms: SR One, Novartis Venture, and Roche Venture; and Novo A/S, an independent firm that represents the economic interests of the Novo Nordisk Foundation.

In another notable deal, recently public Danish biotech Zealand Pharma and German biopharma Boehringer Ingelheim entered into an exclusive global license and collaboration agreement for Zealand’s preclinical candidate for the treatment of type-2 diabetes and obesity. Specific financial terms were not disclosed but Zealand is eligible to receive payments of up to $41 million during the first two years of the collaboration and could earn as much as $530 million if all milestones are met.

Boehringer Ingelheim will have global development and commercialization rights to ZP2929, Zealand Pharma's lead glucagon/GLP-1 dual agonist drug candidate. Zealand will be responsible for conducting the first phase 1 study with ZP2929 and Boehringer Ingelheim will fund the research, development and commercialization of products. The companies will also work together on the characterization, identification and development of additional glucagon/GLP-1 dual agonists for the exploration of new indications, formulations and delivery systems. Zealand is entitled to royalties on global sales of products and retains co-promotion rights in Scandinavia.















June 17, 2011
http://www.burrillreport.com/article-startup_snags_big_biotech_partner.html