Forma Reels In J&J With $700M Deal; 2nd Cancer Drug Discovery Partner in a Week
Forma Therapeutics has the hot hand among biotech startups in the early days of 2012. Today, it is announcing it has struck its second alliance with a Big Pharma company that wants Forma’s help discovering cancer drugs.
The Watertown, MA-based biotech company is announcing today that Janssen Biotech, a unit of New Brunswick, NJ-based Johnson & Johnson (NYSE: JNJ) has agreed to collaborate with Forma to find drugs that can throw a wrench into the overactive metabolic pathways of cancer cells. Forma isn’t disclosing how much upfront or ongoing research support it will get from Janssen, but did say it could get as much as $700 million over the years in development, regulatory, and commercial milestone payments if the discovery effort generates real drugs.
The new alliance comes less than a week after Forma struck a partnership with Germany-based Boehringer Ingelheim, which agreed to pay Forma $65 million over the next four years, plus milestones, to discover cancer drugs against certain hard molecular targets known as protein/protein interactions. The latest deal means that Forma has now secured four partnerships in the past 14 months, with large organizations throwing their support behind Forma’s 100-person drug discovery crew. Taken together, those deals have provided Forma with $175 million of upfront cash and research support over the next four years, and made the startup eligible for up to $2.5 billion in milestone payments. Even if none of the big milestone checks arrive, the upfront and research support has enabled Forma to build a discovery team with enough capability to rival what some Big Pharma companies devote to the earliest stages of cancer R&D, CEO Steve Tregay has said.
“It’s been a good 14 months for us,” Tregay says.
The field of cancer metabolism, in which researchers seek to fight tumors by essentially starving them of essential nutrients, has become one of the hot niches in cancer biology. Cambridge, MA-based Agios Pharmaceuticals has staked out a position as an early leader in the field, with backing from Summit, NJ-based Celgene (NASDAQ: CELG). This also isn’t the first deal Forma has done in the field—it agreed back in June with South San Francisco-based Genentech to collaborate on a program to develop a drug that fights the overactive metabolism of cancer cells. That deal also had an unusual twist, in which Forma agreed that if Genentech exercises an option to acquire full rights to a new drug candidate, then Forma will be able to deliver the proceeds as returns to its investors—without getting acquired or attempting to go public.
This latest transaction with Janssen Biotech has its own twist. Forma’s strength is mainly in the early-stage discovery, but in this case it has retained the potentially lucrative opportunity to co-develop and keep North American product rights to one of the drugs it discovers. And the two parties both have the option to expand the drug discovery effort beyond the realm of cancer cell metabolism.
Holding onto North American product rights is a key part of Forma’s strategy to evolve over time from a pure discovery-based organization into more of a diversified operation that does early and late-stage R&D. And there could be a lot more money for Forma and its shareholders if even one of the many molecules it discovers turns out to be a big hit for cancer. Keeping some North American commercial rights “is a key element of our strategy to create long-term shareholder value,” Tregay said in a statement.