Abbvie, Galapagos in 2nd Deal; $45M Up Front, $360M in Milestones
By Marie Powers
One day after disclosing an $840 million licensing deal with Ghent, Belgium-based Ablynx NV for nanobody technology to treat rheumatoid arthritis and systemic lupus erythematosus, Abbvie Inc. turned to another Belgian biotech – existing partner Galapagos NV – for a global alliance to discover, develop and commercialize potentiator and combination therapies in cystic fibrosis (CF).
Abbvie, of North Chicago, and Mechelen-based Galapagos will collaborate both on technologies and resources to develop and commercialize oral drugs that address primary CF mutations, including F508del – which occurs in 90 percent of CF patients – and G551D.
The partnership will seek to identify compounds known as correctors, which fix defects in the expression of, and potentiators, which increase the activity of the main mutations in, the CF transmembrane regulator (CFTR) protein.
The arrangement is smaller than the blockbuster 2012 deal between the companies for GLPG0634 (‘634), the Galapagos JAK1 inhibitor for rheumatoid arthritis, which was worth $1.35 billion, plus royalties, to Galapagos and included a transformative up-front payment of $150 million. (See BioWorld Today, March 1, 2012.)
Instead, Abbvie will make an up-front payment of $45 million for rights related to the alliance, and Galapagos is eligible to receive another $360 million in developmental and regulatory milestone payments, plus sales milestones upon the achievement of predetermined minimum annual thresholds and double-digit royalty payments.
Still, the ‘634 deal was instrumental in triggering the CF arrangement, according to Galapagos CEO Onno van de Stolpe, since the size of the initial agreement – at the time, said to be the largest Phase II pact in biotech history – facilitated interactions between senior officials at the companies.
“They liked the way we approach discovery and development,” he told BioWorld Today.
Although Galapagos initially planned to develop and commercialize its CF assets internally, “the landscape has changed, with big pharma stepping in,” van de Stolpe added, citing Pfizer as an example. Three years ago this month, the pharma picked up the orphan disease firm Foldrx Pharmaceuticals Inc., whose lead compound, tafamidis meglumine (Vyndaqel), drew a complete response letter from the FDA against the orphan indication transthyretin familial amyloid polyneuropathy. However, Foldrx’s yeast-based target discovery platform encompassed programs aimed at other diseases caused by protein misfolding, including a CFTR modulator that was funded through a $22 million collaboration with the Cystic Fibrosis Foundation (CFF). (See BioWorld Today, Sept. 2, 2010.)
Galapagos also began its CF research in 2005 as part of a CFF collaboration. In 2010, the company decided to pursue CF as the first orphan indication for an internal pipeline, also using a small-molecule approach to restore the function of the defective CF protein. The program was advancing nicely, with the company picking up $71 million in May for CF and for programs in breast cancer and inflammatory bowel disease. (See BioWorld Today, May 6, 2013.)
But given increased competition in the CF space, “we believed this would be a much bigger effort than we currently are able to do,” van de Stolpe explained. About six months into the ‘634 deal, Galapagos and Abbvie began talking about a potential CF collaboration. Abbvie doesn’t have an internal CF program but, like most biotechs, is keenly interested in orphan indications.
“We decided that partnering would probably be the best way forward with the highest prospects of bringing a molecule to the market,” van de Stolpe said.
In contrast to the ‘634 deal, Galapagos will play a bigger role in developing the CF candidates. Instead of Galapagos conducting a Phase II study and, upon meeting study goals, turning development over to Abbvie, “this is a true research collaboration,” van de Stolpe said. The firms will jointly conduct early stage discovery, and Galapagos will move ensuing molecules into preclinical, Phase I and Phase II studies, which will largely be financed through milestone payments. Abbvie will assume management and the lion’s share of resources for Phase III development, with Galapagos contributing some funding.
“In all of the other alliances, we did all the work and the partners paid us milestones,” van de Stolpe said. “This is a completely new experience for us.”
The partnership will seek to advance both potentiators and correctors in the Galapagos portfolio and to expand the range of molecules, with the goal of identifying the first preclinical potentiator candidate this year and moving that compound into human studies at the end of next year. Abbvie will oversee commercial activities, but – similar to the Ablynx deal – Galapagos secured co-promotion rights in Belgium, the Netherlands and Luxembourg. In addition, the biotech retained exclusive rights in China and South Korea.
Abbvie already is assembling a project team to advance candidates through the discovery phase, van de Stolpe said.
The deal drew notice from several analysts with respect to possible competition for Vertex Pharmaceuticals Inc., which is increasingly dependent on CF drug Kalydeco (ivacaftor) as hepatitis C virus drug Incivek (telaprevir) loses market share.
RBC Capital Markets analyst Michael Yee seemed unconcerned, writing in a first glance that Vertex has a head start of four to five years, even if Galapagos and Abbvie successfully develop a potentiator/corrector combination.
“Bottom line is we believe VRTX stock is very attractive longer-term with key catalyst being Phase III ‘combo data’ in late summer 2014,” Yee wrote.
On Tuesday, Galapagos shares (Brussels:GLPG) gained 3.8 percent, closing at €15.80 (US$21.28). Vertex shares (NASDAQ:VRTX) were off $1.06, closing at $74.53.
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