Washington Editor

Biotechs continued rushing to finalize deals before the year-end, with Human Genome Sciences Inc. and Montreal-based Aegera Therapeutics Inc. teaming up in a $315 million agreement to develop and commercialize cancer cell-killing molecules.

Also Thursday, San Carlos, Calif.-based Nektar Therapeutics said it inked a $44 million deal with Baxter International Inc. to develop new pegylated therapies to treat hemophilia.

Under a three-year research agreement, HGS paid Aegera an up-front fee of $15 million in return for exclusive worldwide rights, excluding Japan, to AEG40826, a member of a new class of small-molecule drugs that target a family of naturally occurring proteins called inhibitor of apoptosis proteins (IAP), and related backup compounds.

The deal also could bring Aegera $295 million in future development and commercial milestone payments, including a $5 million milestone payment when AEG40826 gains FDA clearance for clinical trials, which is expected in early 2008, Aegera CEO Michael Berendt told BioWorld Today.

Under the collaboration, Aegera is entitled to receive double-digit royalties from Rockville, Md.-based HGS on product net sales outside of Japan. In addition, Berendt said, Aegera has the option to co-promote products in North America, under which it will share 30 percent of expenses and 30 percent of profits in lieu of its royalties.

The agreement calls for Aegera to retain the non-oncology rights to AEG40826 and other IAP inhibitors that are not selected for development under the HGS agreement, Berendt noted.

HGS also made an equity investment of about $5 million in the Canadian firm.

The deal, Berendt said, provides Aegera with "sufficient capital and a strong partner to control our own destiny."

Berendt said his firm received interest from multiple firms to partner on AEG40826.

"One of the driving forces obviously of any deal is the economics, and HGS was highly competitive," he said. "But the other thing we found is that, for a larger company, and admittedly it started from biotech roots, they still shared much of the aggressive, innovative philosophy that we, a company of 45 people, have. And we found really good compatibility, clearly on the intellectual property front, the preclinical research front, the preclinical development front, the human clinical development expertise and programs and then the potential to commercialize this either as a stand-alone agent or in combination with other cytoreductives and with TRAIL monoclonal antibodies."

IAP proteins are important regulators of apoptosis, or programmed cell death, in cancer cells, explained David Stump, HGS's executive vice president of research and development.

"When IA proteins are overexpressed in cancer cells, they may help those cancer cells resist apoptosis and reserve growth," he said Thursday in a conference call to investors. "The IAP inhibitors are designed to block this activity by rapidly reducing the number of IAP proteins in cancer cells, thus allowing apoptosis to proceed and thus causing the cancer cells to die."

Preclinical studies of AEG40826 in combination with HGS's TRAIL receptor antibodies "have demonstrated dramatic synergistic activity against a number of cancer types, including prostate, breast, esophageal, colorectal and non-small-cell lung cancer," Stump said.

Preclinical data also showed that AEG40826 has significant antitumor activity alone and in combination with other anticancer agents in a broad range of malignancies, he added.

Both the HGS TRAIL receptor antibodies and Aegera's IAP inhibitors are highly targeted in approaches that selectively cause cancer cells to die through apoptosis, Stump said.

HGS's TRAIL receptor antibodies specifically bind to TRAIL receptors 1 or 2, proteins involved in cell death, and directly stimulate those receptors to initiate the apoptosis process, he noted.

"So we now have two different approaches targeting different points in the same pathway, each of which is able selectively to cause cancer cells to die by apoptosis," Stump said. "We plan to pursue these opportunities aggressively by studying our TRAIL receptor antibodies and IAP inhibitors both separately and in combination."

Barry Labinger, HGS's executive vice president and chief commercial officer, noted that the HGS-Aegera deal is not limited to one compound.

HGS scientists will work with Aegera scientists over the next three years to develop additional IAP inhibitors as backup compounds to AEG40826, "and to make sure that we bring the right ones forward," Labinger said.

"We believe that this deal brings the added benefit of strengthening the potential of the products we already have," he added.

HGS's clinical development pipeline includes drugs to treat hepatitis C, lupus, anthrax disease, cancer and other immune-mediated diseases, noted CEO H. Thomas Watkins.

The firm's two lead products, Albuferon (albinterferon alfa-2b), which HGS is developing in collaboration with Novartis AG for the treatment of chronic hepatitis C, and LymphoStat-B (belimumab), which the company is developing in partnership with GlaxoSmithKline plc for the treatment of lupus, currently are in Phase III clinical trials, Watkins added.

Under the Nektar-Baxter deal, the second agreement between the two firms for hemophilia therapies, Nektar will receive up to $44 million in up-front and milestone payments, funding of research and development, and manufacturing revenues during research, clinical development, and commercialization.

Nektar also will receive royalties on end product sales, the firms said in a statement.

Deerfield, Ill.-based Baxter will be responsible for the development and commercialization of the product, and Nektar will be responsible for the technology development used in the compound, including the provision of clinical and commercial PEG reagents, the companies said.

Nektar noted that its PEGylation technology already has been applied successfully to eight marketed products in the U.S. and Europe.

Preclinical development for the new hemophilia program is set to start in 2008.