The last week of October was appropriately marked by treats and tricks. The stock market gyrated from investor ebullience over numbers showing a 3.5 percent growth of the U.S. GDP in the third quarter of 2009, to investor dismay over worries that a drop in consumer spending signals an unsustainable recovery. Meanwhile, life science companies were busy raising money and striking deals. Durham, North Carolina-based Aldagen (ALDH) took its place in a growing queue of companies hoping to go public in the coming months as the IPO window begins to open. The company, which develops regenerative cell therapies, had initially filed to go public in May of 2008 but withdrew those plans last October when the stock market crashed.
Now that the markets have strengthened, the company hopes to raise an estimated $80.5 million in an initial public offering to fund a phase 3 trial of its most advanced therapy for the treatment of critical limb ischemia, which can happen when a limb becomes damaged due to lack of blood flow. Aldagen also has a drug in a pivotal phase 3 trial for improving umbilical cord blood transplants used to treat inherited metabolic diseases in pediatric patients. Aldagen plans to list the shares on the NASDAQ Global Market under the symbol ALDH.
The world market for IPOs got a boost with the inauguration of the ChiNext exchange, a new Chinese stock exchange for small, high-tech enterprises, which started trading on Friday. All of the 28 listed companies, which included six involved in biotech and pharmaceuticals, soared in price on the first day of trading.
In the biggest deal of the week, Medivation (MDVN) will collaborate with Astellas Pharma (ALPMF.PK) to develop and commercialize MDV3100, a new generation of oral anti-androgen that is currently being evaluated in a phase 3 trial for the treatment of prostate cancer. In a deal similar to last year’s partnership between Medivation and Pfizer (PFE) for Dimebon in Alzheimer’s disease, the deal involves a significant amount of cash upfront and the option to co-promote the drug in the United States. Astellas will pay Medivation $110 million upfront and milestone payments up to $335 million as the candidate reaches certain development and regulatory milestones plus up to an additional $320 million in commercial milestone payments. The companies will collaborate on a comprehensive development program that will include additional studies to develop MDV3100 for both late- and early-stage prostate cancer. If and when the drug is approved, the companies will jointly commercialize MDV3100 in the United States, sharing equally in all U.S. development costs, commercialization costs, and profits. Astellas will have responsibility for developing and commercializing MDV3100 outside the United States and will pay Medivation tiered double-digit royalties on ex-U.S. sales.
Bay Area biotech SuperGen (SUPG) entered into a multi-year collaboration with GlaxoSmithKline (GSK) to discover and develop cancer therapeutics based on epigenetic targets in a deal that could be worth as much as $375 million for the epigenetics company. The deal is seen as validation for Supergen’s in-silico drug discovery platform. Under the terms of the deal, SuperGen will progress candidate compounds through to early clinical proof of concept. GlaxoSmithKline will then have the right to exercise an option to develop further and commercialize resulting products on a global basis. GSK will pay SuperGen $5 million upfront, which includes a $3 million common stock investment, priced at a premium to market. The deal includes the potential for development and commercial milestones, and double-tiered royalties.
Micromet (MITI) scored another hit on its BiTE antibody technology platform in a deal with Sanofi-Aventis (SNY). The companies entered a global collaboration and license agreement to develop a BiTE antibody against an antigen present at the surface of carcinoma cells. BiTE antibodies are novel therapeutic antibodies that activate a patient’s T cells to seek out and destroy cancer cells. Under this agreement, Bethesda, Maryland-based Micromet will be mainly responsible for the discovery, research and development of the BiTE antibody through the completion of phase 1 clinical trials after which Sanofi-Aventis will have full responsibility for the further development, as well as for the worldwide commercialization. Micromet gets $12 million cash upfront and is eligible for development and regulatory milestone payments of up to $241 million, plus performance-based sales milestones of up to $224 million and royalties on worldwide product sales.
Global contract research organization PPD (PPDI) is investing $100 million in Celtic Therapeutics Holdings, an investment partnership organized to acquire and develop novel mid-stage therapeutic candidates that address unmet medical needs, and advance development of these candidates to the next key product milestone, usually the beginning or end of phase 3. PPD’s investment is intended to set the stage for a strategic alliance between the companies with the goal of bringing the best products to market more quickly to meet unmet needs of patients.
Finally, Ligand Pharmaceuticals (LGND) is buying struggling Metabasis Therapeutics (MBRX) for the fire sale price of $3.2 million and contingent value rights. The La Jolla, California biotech, which has a pipeline of drugs to treat metabolic diseases, went public in June 2004 at $7 a share. Today its stock trades below 50 cents. The company burned through more than $200 million without getting any drugs to market and cut its staff down to seven people earlier this year as it ran low on cash. Under the agreement, Ligand will pay Metabasis’ shareholders $1.8 million and take over more than $1.3 million in liabilities. Metabasis shareholders will receive contingent value rights that entitle them to cash payments as frequently as every six months as cash is received by Ligand from proceeds from the sale or partnering of any of the Metabasis drug development programs, among other triggering events. Ligand has committed to spend at least $8 million in new research and development funding on the Metabasis programs within 42 months following the closing of the transaction.
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