Galapagos Scores $1.35B Deal With Abbott for Arthritis Drug
By Nuala Moran
LONDON – Galapagos NV landed a deal with Abbott last week worth $1.35 billion, plus royalties, for its JAK1 inhibitor for rheumatoid arthritis, in an agreement the company said is the largest for a Phase II compound in the history of the industry.
Under the terms, Galapagos will take a company-transforming fee of $150 million up front, with a further $200 million to follow by the end of 2014 if the compound, GLPG0634, shows positive results in a Phase IIb study to be carried out by the Mechelen, Belgium-based biotech.
"This is a different magnitude to previous deals; the near-term numbers are much higher," said Onno van de Stolpe, CEO.
"From 2006 to date we've taken €180 million (US$242.4 million) up front across a number of deals. Now we are getting $150 million in one go," he told BioWorld International.
Shares in the company (Brussels:GLPG) gained 21 percent, or €2.25, to close Feb. 29 at €13.09.
The deal marked a turning point for Galapagos, not only because of the financial impact, but also as a validation of the company's discovery platform.
"We identified the target and brought the program through to a massive deal after proof of concept in the clinic," van de Stolpe said.
For Abbott, GLPG0634 presents a possible successor to Humira (adalimumab), its blockbuster anti-TNF alpha monoclonal antibody, if the results from the Phase IIa study play out in subsequent trials.
To date, JAK inhibitors have been touted as potential treatments for patients who have failed on, or become resistant to, anti-TNF antibodies. However, JAK inhibitors are orally available and have shown modest side-effect profiles in clinical studies, suggesting that given time and appropriate efficacy, they could replace injected antibodies altogether.
GLPG0634 offers the potential for "an improved patient experience," said John Leonard, senior vice president of global R&D at Abbott.
If Abbott Park, Illinois-based Abbott decides to take up the license when Galapagos presents the complete Phase II rheumatoid arthritis data file in 2014, the U.S. pharma also will develop GLPG0634 in psoriasis, irritable bowel syndrome and lupus. That will mirror the way in which the label on Humira has been expanded beyond the initial indication of rheumatoid arthritis.
Galapagos has retained co-promotion rights to GLPG0634 in Belgium, the Netherlands and Luxembourg. Van de Stolpe said that in addition to the significant cash infusion from the deal, that will pave the way for the company to start to build the sales and marketing infrastructure that will enable it to take its cystic fibrosis program through to commercialization on its own.
"We will bring this all the way under the Galapagos label – we couldn't do that in rheumatoid arthritis because it's so big you need a partner," he said.
Van de Stolpe claimed Galapagos' Abbott agreement is the largest Phase II deal in the history of the industry.
Analyst Jan de Kerpel, at KBC Securities in Belgium, agreed that the terms set a precedent for a compound at that development stage – and with a data package based on only four weeks dosing in a chronic disease.
"Not only is the up front double our base-case scenario, it is much more than any other oral compound in rheumatoid arthritis," de Kerpel said in a note.
The deal also is an important milestone in translating the biology of Janus kinases – an enzyme family that plays a key role in signaling pathways used by cytokines and growth factors involved in autoimmune diseases and cancer – into therapies.
The only JAK inhibitor to have made it to market, Incyte Inc.'s Jakafi (ruxolitinib), was approved by the FDA in November 2011 .
As well as being the first JAK inhibitor to be commercialized, Jakafi is the first registered treatment for the bone marrow cancer myelofibrosis.
Other companies, including Sanofi SA, S*Bio Ltd. and YM Biosciences Inc., have JAK inhibitors in development for hematological cancers.
In rheumatoid arthritis, the lead JAK inhibitor, Pfizer Inc's tofacitinib, has been filed for FDA approval, while Vertex Inc.'s VX509 is in Phase II.
Each member of the Janus kinase family associates with different cytokine and growth factor receptors.
While Pfizer's tofacitinib inhibits JAK3, it also binds JAK1 and JAK2. GLPG0634, on the other hand, inhibits only JAK1 .
Van de Stolpe has been keen to emphasize that, in the Phase IIa trial in 36 patients, GLPG0634 demonstrated a better safety profile than other JAK inhibitors. In particular, there was no anemia and no increases in LDL/cholesterol levels. Van de Stolpe ascribed GLP0634's better side-effect profile to the fact it is a selective inhibitor.
In terms of its clinical impact, the Phase IIa trial of GLPG0634 delivered positive results on ACR20, the standard measure of disease activity, and also on the standard test for inflammation, serum levels of C-reactive protein.
Having signed the deal with Abbott, Galapagos next needs to do a Phase IIa dose-ranging study before progressing to the Phase IIb. If Abbott picks up the program after Phase II is complete, it will be responsible for all onward development.
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