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J&J Paying $650M Cash for Aragon -- AND -- SCOTUS Refuses to Sink Pay-for-Delay Settlements

By Randy Osborne
Staff Writer

Aragon Pharmaceuticals Inc.’s positive Phase II data with ARN-509 for castration-resistant prostate cancer (CRPC) was enough to lure Johnson & Johnson (J&J) to the table with an up-front cash payment of $650 million to take over the company, along with contingent money of up to $350 million, if unspecified milestones are reached.

Before the deal closes, which is expected to happen in the third quarter of this year, Aragon will transfer all assets other than its androgen receptor antagonist program (of which ARN-509 is part) to a newly formed company that will be spun off. J&J will not have an ownership stake in the new firm.

San Diego-based Aragon in October raised $50 million on the strength of favorable Phase II results with ARN-509, which will nicely complement J&J’s approved Zytiga (abiraterone acetate), used with prednisone to treat metastatic CRPC patients who are asymptomatic or mildly symptomatic after failure of androgen deprivation therapy.

ARN-509, in contrast to the older anti-androgen compound, bicalutamide, does not act as an agonist in prostate cancer cells that overexpress the androgen receptor. Aragon found that the compound tested in an open-label study involving 93 patients yielded durable prostate-specific antigen (PSA) responses as well as some objective responses, and was well tolerated. The patient group included those who had high risk nonmetastatic CRPC, treatment-naïve metastatic CRPC, and metastatic CRPC that progressed after treatment with Zytiga.

Aragon said at the time of the Series D financing that plans for a Phase III trial were in the works.

At the start of this year, the firm cleared up a dispute over anti-androgen compounds with Medivation Inc., of San Francisco, which had claimed breach of contract against the Regents of the University of California. San Francisco County Superior Court granted summary adjudication in Aragon’s favor, regarding an intervention complaint, and decreed that Aragon’s owns exclusive right to the drug candidates, including ARN-509.

Medivation would have found the compound useful in its drug lineup, too. The FDA approved the company’s androgen receptor signaling inhibitor Xtandi (enzalutamide) for metastatic CRPC four months ahead of schedule last September. Phase III results from the AFFIRM trial in a group of pretreated patients showed a median survival of 18.4 months for Xtandi, compared to 13.6 months for the placebo group.

Aragon’s platform is based on the work of Charles Sawyers, director of human oncology and pathogenesis at Memorial Sloan-Kettering Cancer Center and co-founder of the company, who determined that men with prostate cancer eventually become resistant to hormone therapy due to an elevated level of androgen receptors.


SCOTUS Refuses to Sink Pay-for-Delay Settlements

By Mari Serebrov
Washington Editor

Tacking toward the middle, the Supreme Court gave the FTC some berth this morning in challenging pay-for-delay settlements between generic and brand drugmakers, but it closed the hatch on a “quick look” approach that would presume all such agreements are unlawful.

In a 5-3 opinion written by Justice Stephen Breyer, the court ruled that the U.S. Court of Appeals for the 11th Circuit was wrong when it affirmed a lower court’s dismissal of the FTC’s antitrust challenge of Actavis Inc.’s settlement with Solvay Pharmaceuticals Inc. The FTC should have been given a chance to prove its case in court, Breyer wrote for the majority. (Justice Samuel Alito recused.)

“There may be justifications for reverse payment that are not the result of having sought or brought about anticompetitive consequences, but that does not justify dismissing the FTC’s complaint without examining the potential justifications,” the Supreme Court ruled.

In reviewing future settlements, courts should apply the “rule of reason” rather than settling for a quick look, it added.

See Tuesday's BioWorld Today for More on These Stories.