As mental illness continues to grow at alarming rates, causing severe economic and social burdens on society, Boehringer Ingelheim GmbH (BI) validated Arena Pharmaceuticals Inc.'s G protein-coupled receptors (GPCR) technology with an exclusive drug research collaboration focused initially on schizophrenia and worth a potential $262 million. The deal falls in line with San Diego-based Arena's new strategy, announced last October, of forging strategic collaborations for its earlier-stage programs, all part of a cost-savings effort that included a U.S. work force reduction of 80 employees.
Arena's technology resulted in the 2012 FDA approval of obesity drug Belviq (lorcaserin), its only marketed product, which brought in $16 million in net sales for all of 2014, its first full year on the U.S. market. Arena reported net sales of $4.9 million in the third quarter of 2015, an amount down by 14.4 percent from the previous quarter.
"We've had Belviq on the market for a couple of years now for obesity. That market has not expanded as quickly as we predicted it would," said Craig Audet, Arena's senior vice president of operations and head of global regulatory affairs. "We believe in the compound, its efficacy. It has a safety profile second to none. But we need to get some other products across the finish line."
BI, of Ingelheim, Germany, and Arena will jointly research and identify drugs that target an undisclosed orphan GPCR in the central nervous system (CNS). Orphan GPCRs have no known ligand, but are transmembrane proteins on a cell surface that can interact with the environment. With mental disorders, GPCRs are known to regulate behavior and mood, although they also have been linked to inflammation through receptors in the immune system, as well as metabolic processes.
The partnership joins Arena's expertise in GPCR-focused drug discovery and development with BI's approach to CNS research and development, as well as its ability to reach markets in areas of high unmet need. Together, the companies will conduct research to identify more candidates to advance for a variety of indications. BI will hold exclusive worldwide rights to develop, manufacture and commercialize products that result.
"We're going more back to our roots now," Audet said, explaining Arena's strategy toward collaborations for early stage compounds. While pharmaceutical companies tend to limit their risk by waiting for proof-of-concept data among clinical candidates, the deal with BI helps accelerate Arena's preclinical work. "We have limited resources. We can't do everything. It allows us to carry products forward."
Terms call for Arena to receive up to $262 million, including a $7.5 million up-front payment, research funding and commercial success milestone payments for multiple products.
"The sky's the limit in terms of products and indications," Audet told BioWorld Today.
Arena also is eligible for tiered royalties on eventual sales of potential products. BI gains exclusive rights to Arena's internally discovered compounds and intellectual property for the orphan CNS receptor. The German company works with research partners in neuroscience to target brain circuits involved in untreated symptoms of Alzheimer's disease, schizophrenia and depression.
FOCUSING ON THE PIPELINE
Mental illness inflicts at least 450 million people worldwide, according to the World Health Organization, causing a growing global economic burden larger than it is for cancer, cardiovascular disease or diabetes. The National Alliance on Mental Illness estimates that one in five adults in the U.S. experiences mental illness in a given year, and one in 25 experiences a serious mental illness that interferes with life.
GPCRs play an important role in receiving chemical signals from other cells and can therefore activate certain cellular responses. Ligands bind to the GPCR and activate it into binding with a G protein. Arena's Constitutively Activated Receptor Technology (CART) involves a technique that activates GPCRs without the presence of a natural ligand, making it applicable to both orphan and known GPCRs. The company's Melanophore high-throughput screen technology also can be used for orphan receptors. It uses frog skin cells to signal when GPCRs couple with their G protein to determine when a receptor is inhibited or stimulated.
Arena has three compounds in the clinic: APD334, a modulator of the sphingosine 1-phosphate subtype 1 receptor, which is in a phase II trial for ulcerative colitis; ralinepag, an agonist of the prostacyclin receptor, which is in a phase II trial for pulmonary arterial hypertension; and APD371, an agonist of the cannabinoid-2 receptor, which is in a phase I trial for pain.
"It all depends on patient recruitment, but the CROs we're working with on the two phase II programs project potential data by the end of this year, but we'll see," Audet said, adding that data for APD371 should be available in the first half of this year.
In addition to its deal with BI, Arena has a marketing partnership with Eisai Inc., of Woodcliff Lake, N.J., and Eisai Co. Ltd., of Tokyo, for Belviq, covering worldwide rights, except for South Korea, Taiwan, Australia, Israel and New Zealand. The companies are awaiting results from a cardiovascular outcomes trial (CAMELLIA) that could lead to an additional cardiovascular disease indication, opening the product's market potential. Earlier-stage deals include a South Korean partnership with Ildong Pharmaceutical Co. Ltd. for temanogrel, an orally available inverse agonist of the serotonin 2A receptor, which has completed phase I trials in healthy volunteers; and a collaboration with Axovant Science Ltd., of Hamilton, Bermuda, for nelotanserin, an inverse agonist of the 5-HT2A receptor, expected to enter phase II trials this year to treat dementia.
"Those partnerships allow us to change or progress those compounds where we wouldn't have the wherewithal to do it alone," Audet said.
In October, Arena announced plans to reduce its U.S. employee base by 80 people, or 35 percent, lowering expenditures by $11 million. It anticipated more cuts at its Swiss manufacturing facility, Arena Pharmaceuticals GmbH. The U.S. cuts were expected to cost $3.3M in restructuring charges one-time employee termination costs, including severance and other benefits.
Arena's stock (NASDAQ:ARNA) closed Wednesday at $1.62, up 5 cents.