LONDON – Allergan plc has bounced back from the severing of its $160 billion betrothal to Pfizer Inc., to announce a $3.3 billion collaboration in Alzheimer's disease and other neurological disorders, with G protein-coupled receptor (GPCR) specialist Heptares Therapeutics.

The agreement gives Allergan exclusive rights to a number of selective muscarinic receptor agonists discovered by Heptares, amongst which are two phase I programs.

Heptares will receive $125 million up front, with development milestones of up to $665 million payable up to the launch of the first of three products, followed by $2.5 billion in sales milestones. The Welwyn Garden City, U.K.-based company also will be in line for double-digit royalties on sales.

In addition, Allergan is putting in $50 million to pay for phase II development, with the lead program expected to advance to that stage early in 2017. Once products reach phase IIb Allergan will take over development and will be responsible for manufacturing and commercialization.

If that seems small fry for Dublin-based Allergan in comparison to the failed $160 billion tie-up with Pfizer, it is a very big deal indeed for Heptares.

"It's transformative for us really," CEO Malcolm Weir told BioWorld Today. "It has such great potential for delivering new medicines that are really important. It was always a program we said we would look to partner."

The price ticket reflects the fact that Heptares has taken the lead products HTL9936 and HTL18318, both M1 agonists, into phase I, providing evidence that the selectivity designed into those molecules avoids the gastrointestinal side effects seen with compounds that simultaneously activate M2 and M3 receptors.

"The stage of the program is part of the reason we are moving into a different zone of value. The other reasons are the quality of the data and the potential for these new medicines," Weir said. "They are uniquely selective and efficacious agonists."

The M1 selective compounds are in development for the treatment of symptomatic cognitive deficits in Alzheimer's disease. Allergan also has taken rights to M4 selective agonists that are being developed for the treatment of psychoses associated with both Alzheimer's and schizophrenia. That mechanism of action is different from currently available antipsychotics.

It is also planned to advance combined M1/M4 agonists, which are expected to be effective in treating both cognitive impairment and neurobehavioral symptoms.

Demonstrating the selective action of the lead compounds leaves the development pathway clear. "It has been textbook translation from hypothesis to sophisticated molecular science to clinical result," said Weir. From hypothesizing selective agonists that would avoid the problems associated with M2 and M3 activation, Heptares designed the molecules with its GPCR structure-based technology. "Then in the initial phase I, we see there are none of the usual side effects attributed to M2 and M3 at a dose where evidence from EEG [electroencephalogram] measurements tells us the drug should be active. We have a therapeutic window," he said.

NON-SUSTAINABLE MODEL

While Pfizer CEO Ian Read retired to lick wounds on Wednesday, Brent Saunders, CEO of Allergan was in expansive mode, taking to the air to declaim that focusing on M&A at the expense of R&D, "is a non-sustainable model." (See BioWorld Today, April 6, 2016.)

From Weir's perspective, Saunders is as good as his word. Despite the fact that a great deal of heavy lifting was going on to clear the furniture for the now-terminated Pfizer merger, it was not evident in negotiations. "As far as I was concerned, I was just dealing with Allergan. It shows they were continuing to focus on the business and to make decisions in spite of the merger process," said Weir.

As it happens, Heptares' previous biggest deal, in December 2015, was with Pfizer. In the potential $1.89 billion plus royalties agreement covering multiple indications, Heptares is to be handed 10 GPCR targets from which to produce high-resolution crystal structures for use in Pfizer's in-house discovery efforts. In return, Heptares is eligible to receive research, development and commercial milestones of up to $189 million per target, plus royalties on the sale of any products. No details of the indications were disclosed.

At the same time, Pfizer's Japanese subsidiary, Pfizer Seiyaku KK, invested $33 million in new shares of Heptares' parent, Sosei Group Corp., for about 3.02 percent of the share capital.

That deal with Pfizer was the third to be signed by Heptares following its acquisition in February 2015 by Sosei for up to $400 million. (See BioWorld Today, Feb. 24, 2015.)

The others were a $410 million deal with Teva Pharmaceutical Industries Ltd., in which Heptares out-licensed a preclinical small-molecule calcitonin gene-related peptide antagonist program for treating migraine, and a potential $510 million deal in immuno-oncology with Astrazeneca plc, for an A2A adenosine receptor antagonist.

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