Mersana Therapeutics has snagged its first big partnership. The Cambridge, MA-based company that makes drugs last longer in the bloodstream has formed an alliance with Israel-based Teva Pharmaceutical Industries that could be worth as much as $334 million over time for developing a new polymer-based drug for cancer and other diseases.
Mersana isn’t saying how much money it is getting up front from Teva, although the smaller company could receive as much as $334 million over time if its compound, XMT-1107, reaches every development, regulatory, and sales goal in the deal. Teva has also agreed to pay all the development expenses, except in Japan, where Mersana retains full commercial rights to the drug. If the compound wins regulatory approval elsewhere in the world, Mersana stands to get royalties that are worth a percentage of total sales.
“It’s a validation of our work to have this partnership,” says Julie Olson, Mersana’s CEO. “Despite what people may say, Teva is a smart company.”
Teva is best known as the world’s largest maker of generic drugs, not for work in discovering or developing groundbreaking new therapies. The big company doesn’t even have an internal discovery operation, so for it to become a developer of novel therapies, it truly has to look outside its own walls. Teva’s vision is to morph into something more diversified than it is today, a company with $30 billion in annual revenue by 2015, and about one-third of that cash coming from brand-name pharmaceuticals, Olson says.
As Olson mentioned, not everyone in the pharma and biotech world is a big fan or believer in this vision of a new Teva. Bothell, WA-based OncoGenex Pharmaceuticals (NASDAQ: OGXI) found that out in December, when it trumpeted a new deal with Teva, which left investors so unimpressed, they drove down OncoGenex shares by more than 20 percent the next day. Olson, a former dealmaker at Pfizer, said she noticed that, and that she was satisfied that Teva had done solid homework on Mersana, and vice versa, before the deal was done. “We looked at them very carefully and came away impressed,” Olson says.
What is Teva getting its hands on? The drug, XMT-1107, is designed to modify a fumagillin molecule that’s supposed to fight tumors by cutting off their blood supply. This is similar in concept to drugs like Roche’s bevacizumab (Avastin) or Pfizer sunitinib (Sutent), although the fumagillin drug isn’t made to hit the same target as the others, known as VEGF.
Other companies, notably Takeda Pharmaceutical and Abbott Laboratories, have tried to develop fumagillin molecules for cancer. Those programs showed some anti-tumor activity, but they sputtered because they didn’t last long enough in the bloodstream, and crossed over the blood-brain barrier and caused nervous system side effects like insomnia, agitation, and severe loss of balance, Olson says. So Mersana sought to apply its platform technology to the problem. The idea was to take a fumagillin molecule similar to the others that have been tested, and then attach it to a proprietary biodegradable polymer which Mersana calls a “Fleximer.” This polymer, attached to the fumagillin with a strong covalent chemical bond, is supposed to keep the drug stable in the bloodstream much longer than the drug by itself, and keep it from crossing the blood-brain barrier where it can cause nervous-system side effects, Olson says.
Data to prove this concept is still quite preliminary. The Teva folks bought in after they reviewed tests from mice and rats, which showed the Mersana drug was better at suppressing tumor growth than the other anti-VEGF compounds. The Mersana drug is thought to last long enough in the bloodstream that it can be given via IV every three weeks, Olson says. The compound is ready for its first clinical trial to begin before the end of June, which will assess safety at a variety of escalating doses. Results should be ready in 18 to 24 months, Olson says.
The deal provides enough financial support that Mersana will be in position to grow a bit, from 20 employees now to about 25 or 26, Olson says. The company will look to add some development expertise as it enters clinical trials, but also some research talent to help accelerate its plan to apply the Fleximer technology to the tricky problem of RNA interference drug delivery. Plus, the company still has 100 percent ownership rights to its lead compound, a polymer-enhanced version of camptothecin chemotherapy, which it calls XMT-1001.