East Coast Biotech Roundup: ASH, Proteostasis, Retrophin, & More
[Updated, 8:35 am ET] 2013 is winding down, and with it, a lot of the biotech news flow. But there was still a flurry of dealmaking this week, even with many of the sector’s top names busy at one of the year’s biggest medical meetings. Those stories and more below:
—Much of the biotech world descended on New Orleans for the American Society of Hematology’s annual meeting earlier this week, and while there weren’t really any major stories coming out of the meeting, some East Coast companies—including Infinity Pharmaceuticals (NASDAQ: INFI)—updated investors on early studies for their cancer drugs. Xconomy’s National Biotech Editor, Luke Timmerman, put together a roundup highlighting some of the more intriguing stories coming out of ASH this year.
—Cambridge, MA-based Proteostasis Therapeutics has struck a deal with Biogen Idec (NASDAQ: BIIB) to develop a group of drugs to treat neurodegenerative disorders like Alzheimer’s and Parkinson’s. Proteostasis didn’t disclose the size of the upfront payment it received from Biogen, or the equity investment from the big firm that went along with it, but Proteostasis could get as much as $200 million from Biogen in various payments if things ultimately break right. The drug candidates will be based on Proteostasis’ work in the emerging field of protein homeostasis, or the ability of cells to properly manufacture or deactivate proteins.
—Martin Shkreli’s New York-based rare disease startup, Retrophin, took an unusual gamble this week, using two separate transactions to buy up rights to different formulations of oxytocin, a hormone released in childbirth. In one deal, Retrophin paid Novartis $5 million up front for the rights to an oxytocin nasal spray known as Syntocinon—a drug sold to mothers with trouble breastfeeding that the Swiss company shelved several years ago. In the other, it acquired privately-held, San Diego-based Kyalin Biosciences, which is developing a synthetic form of the hormone. Shkreli’s plan: first, generate cash immediately by reintroducing the Novartis drug. But the bigger goal is to test oxytocin as a potential treatment for schizophrenia and autism. The hurdles are substantial here. Oxytocin is generic, and could easily be sold off-label for cheap. Shkreli discussed his plans in greater detail with Forbes’ Matthew Herper here.
—[Updated with new item] The hits keep on coming for Aveo Oncology (NASDAQ: AVEO). On Friday, Aveo disclosed that a mid-stage clinical trial testing cancer drug tivozanib in patients with colorectal cancer isn’t likely to succeed. The 252-patient study is one of the two trials Aveo desperately looked to for hope following the disastrous FDA advisory panel in May that crushed the company’s hopes of having tivozanib approved as a kidney cancer treatment.
– Crealta Pharmaceuticals, a recently-created specialty pharmaceutical company backed by private equity firm GTCR, has agreed to buy Bridgewater, NJ-based Savient Pharmaceuticals out of Chapter 11 in a deal worth about $120.4 million. Crealta prevailed in a bankruptcy auction that saw Savient’s price more than double. The company filed for bankruptcy in October with a $55 million “stalking horse,” or lead bid, in place from US World Meds that was easily topped during the bidding. Crealta, however, will now have the task of turning around the sales trajectory of pegloticase (Krystexxa), a gout drug that never took off in the market the way Savient first hoped and ultimately caused it to plummet into bankruptcy.
—Bedford, MA-based Hologic (NASDAQ: HOLX) won’t have to deal with a proxy fight anytime soon. The company cut a deal with activist investor Carl Icahn this week, allowing the billionaire financier to place two independent directors on its board in return for his support of Hologic’s existing nominees. Hologic, which has been struggling financially in the wake of a series of big acquisitions, also named a new CEO: Stephen MacMillan, the former longtime head of Stryker (NYSE: SYK), who abruptly left the company in February 2012.
—Cambridge-based Agios Pharmaceuticals (NASDAQ: AGIO) extended its big partnership with Summit, NJ-based Celgene (NASDAQ: CELG) this week. Celgene exercised an option to add an additional year to the pact, which gives it an exclusive option to all of the drugs coming out of Agios’ cancer metabolism research through April 2015. Agios banked a $20 million payment as a result. Celgene has another option to extend the deal by another year, which would trigger another payment to Agios. The Cambridge biotech got a big $130 million check from Celgene back in April 2010 when the two first signed the deal.
—The hepatitis C drug Watertown, MA-based Enanta Pharmaceuticals (NASDAQ: ENTA) is developing with AbbVie (NYSE: ABBV) cleared another hurdle this week as the company announced positive results from the latest in a series of late-stage clinical trials testing the drug in a swath of patients with the disease. AbbVie is running a bunch of studies using Enanta’s protease inhibitor, ABT-450, as part of a cocktail regimen of all-oral treatments for hepatitis C.