AstraZeneca Paying Record $240M Upfront in mRNA Deal With Moderna
By Randy Osborne
Facing the patent cliff and beset by trial failures, AstraZeneca plc slid a tall pile of chips across the table to Moderna Therapeutics Inc. – $240 million – in what’s probably the biggest upfront deal ever for research that has yet to reach the clinic.
Disclosure of the agreement topped off an investor meeting in New York, at which hopeful backers of the London-based firm got acquainted with AstraZeneca’s new CEO, Pascal Soriot, and heard about strategies for surviving, if not thriving, in what may be some difficult years ahead. Earlier this week, London-based AstraZeneca said it would cut the payroll by 1,600 employees. (See BioWorld Today, March 19, 2013.)
Also in the works: relocating 2,500 jobs, adding up to a one-time restructuring tab of $1.4 billion, along with a $500 million capital investment in Cambridge, UK. The idea is to save about $190 million per year, though this will not be adequate if research and development does not yield more therapeutically viable fruit.
Enter Moderna, of Cambridge, Mass. Founded in July 2011 on a platform technology for delivery of messenger RNA (mRNA) to stimulate production of therapeutic proteins in the cells, the company showed up on the radar in December with a $40 million financing led by Flagship Ventures and a consortium of private investors. (See BioWorld Today, Dec. 6, 2012.)
Leerink Swann analyst Seamus Fernandez “came away [from the AstraZeneca investor meeting] more constructive on prospects for the mid-stage pipeline than expected,” he wrote in a research report, published while word was still circulating of the deal with Moderna, which pundits in the U.S. likely will spend the day digesting.
The wager is considerable for AstraZeneca, given Moderna’s still-nascent research. The only agreement that comes anywhere near the hefty upfront was Summit, N.J.-based Celgene Corp.’s $130 million payout in 2010 to Agios Pharmaceuticals Inc., of Cambridge, Mass., for rights to license drug candidates from the latter’s cancer metabolism research platform at the end of Phase I trials. (See BioWorld Today, April 16, 2010.)
Moderna's mRNA therapeutics, intended to trigger cells to make therapeutic proteins without causing an immune response, could do away with the need to make such proteins in the lab and could allow for targeting diseases once believed unreachable. What’s more, the company believes it can trim the gap between preclinical experiments and trials down to just a few weeks.
AstraZeneca, with a set of Phase III programs of its own already under way, bought the idea. Fernandez noted that the company’s R&D leadership was “enthusiastic” about the efforts with lesinurad (an inhibitor of the URAT1 transporter in the kidney for gout), olaparib (a PARP inhibitor for BRCA1/BRCA2-mutant ovarian cancer), and – “perhaps in contrast to CEO Soriot” – selumetinib (a MEK inhibitor for lung cancer). “When asked about fostamatinib (a SYK inhibitor for rheumatoid arthritis), management conviction was less clear to us,” Fernandez wrote, though AstraZeneca could file for approval of olaparib in Europe this year, based on subset analyses that regulators there may find acceptable.
Meanwhile, terms of the Moderna deal give AstraZeneca exclusive access to select any target of its choice in cardiometabolic diseases, as well as selected targets in oncology, over a period of up to five years. Moderna could also get $180 million for achieving three technical milestones.
AstraZeneca has an option to select up to 40 drug products for clinical development, paying development and commercial milestone rewards along the way, as well as royalties on drug sales ranging from high single digits to low double digits for each product. The London firm will lead the preclinical, clinical development and commercialization of therapeutics, with Moderna responsible for coming up with mRNA against selected targets. See Friday's BioWorld Today for More on This Story.
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