Last week we learned which 10 deals – five biopharma licensing and five M&A deals negotiated in 2013 – made the cut as candidates for the Breakthrough Alliance Awards. It was a tough choice with Thomson Reuters deals analysts examining hundreds of eligible transactions in order to arrive at the final contenders. Now industry has a chance to weigh in and record their votes that will determine the “deal of the year” in each category. The winners will be announced at the Allicense conference in April.

In a webinar to announce the list of nominees, Thomson Reuters analysts said they were looking for innovation and creativity among the wide array of transactions that were concluded last year.

To arrive at the final M&A candidate deals list Laura Vitez, senior deals analyst at Thomson Reuters Recap, said that from the outset she and her colleagues weren’t looking for the largest deal in terms of dollar size. As a result, the top 10 percent of deals were excluded, and selection was made from among the 50 to 90 percentile total deal size involving therapeutic assets in all development stages. In all, a pool of 35 M&A deals, ranging in size from $203 million to $1.285 billion, were sent to an external nominating committee to choose the final list.

M&A NOMINEES

The largest dollar size acquisition to be chosen was Johnson & Johnson’s (J&J) takeover of Aragon Pharmaceuticals Inc. for $650 million in cash and $350 million more in contingent milestone payments that captured phase III-ready ARN-509 for castration-resistant prostate cancer (CRPC) to support J&J’s approved androgen inhibitor Zytiga (abiraterone acetate) for the same indication. (See BioWorld Today, June 18, 2013.)

The only deal involving the acquisition of a public company was Cubist Pharmaceuticals Inc.’s $818 million acquisition of Trius Therapeutics Inc. The antibiotics space has heated up recently and Cubist padded its pipeline with Trius’ tedizolid phosphate (TR-701) for acute bacterial skin and skin structure infections (ABSSSIs) and its new class of broad-spectrum, gram-negative antibacterial agents that are directed against novel targets Gyrase B (GyrB) and ParE.

Another deal in the infectious diseases space also made the cut – London-based Glaxosmithkline plc paying approximately $325 million for Swiss firm Okairos AG. That deal strengthened GSK’s vaccine franchise by giving it access to a next-generation T-cell vaccine platform for infectious diseases, including hepatitis C, malaria, respiratory syncytial virus and influenza, as well as cancer, and several promising early stage candidates. The committee was impressed with that deal because it represented a greater-than-10x return for Okairos’ investors, which had put a mere €23.2 million (US$31.9 million) into the firm since it spun out of Merck & Co. Inc. in 2007. The firm’s cash-efficient model was helped substantially by its grant haul over the years. The firm obtained roughly €25 million from the likes of the National Institutes of Health, the European Union, the Medical Research Council and the Bill and Melinda Gates Foundation. (See BioWorld Today, May 30, 2013.)

The white hot immunotherapy space was recognized with Astrazeneca plc’s (Medimmune) buyout of Amplimmune Inc. for $225 million making the list. It is a deal that could put the pipeline-strapped pharma giant high on the short list of leaders in combination immunotherapy, if Amplimmune’s early stage candidates pan out. This is why, like many of today’s deal structures, the deal carries with it another $275 million in continent milestone payments. (See BioWorld Today, Aug. 28, 2013.)

Founded in 2007, Amplimmune has developed three biologic product candidates: AMP-224 in Phase Ib trials in cancer (partnered with GSK), AMP-110 for autoimmune diseases (partnered with Daiichi Sankyo Inc., of Parsippany, N.J.) and AMP-514 for cancer.

Rounding out the candidate list was a deal involving Lotus Tissue Repair Inc., of Cambridge, Mass., that was acquired by Shire plc, of Dublin, for a $49.3 million up-front payment and $275 million in contingent payments based on the achievement of certain safety and development milestones. Lotus, which was founded in 2011, is developing a protein replacement therapy for dystrophic epidermolysis bullosa (DEB), an orphan disease characterized by the presence of extremely fragile skin and recurrent blister formation resulting from minor mechanical friction or trauma. Upon completion of the acquisition, Shire’s Human Genetic Therapies business will take over further development of the lead candidate, a recombinant form of human collagen Type VII, which is in late preclinical development for DEB. (See BioWorld Today, Jan. 9, 2013.)

PARTNERING DEAL CANDIDATES

Getting to the final list of partnering deal nominees started from licensing deals in 2013 with a value greater than $100 million (total or up front), said Vinay Singh, Thomson Reuters Recap senior deals analyst. Creatively structured deals that uniquely positioned partners in new or intriguing therapeutic spaces were among the selection criteria for the deals in that range. In the end, a pool of 44 licensing/joint venture deals were examined involving deal sizes ranging from $100 million to $3.3 billion.

Emerging from that pool was the partnership deal involving Biogen Idec Inc. and Isis Pharmaceuticals Inc. with the goal of applying antisense technology to the discovery and development of therapies for neurological diseases. The financial terms call for $100 million up front to Isis, $220 million in potential milestones for each antisense candidate and additional funding for clinical trials conducted by Isis under the collaboration.

The creative deal raised the firms’ relationship from the level of one-off collaborations to a broad strategic partnership that will fully exploit the role of antisense technology in multiple neurology applications, potentially including peripheral nerve disease.

The six-year research agreement, which provides both partners with flexibility to move discoveries forward, is designed to leverage Biogen’s expertise in neurology with Isis’ prowess in antisense technology. By creating a joint working team to select and validate disease targets and conduct drug discovery activities, Biogen and Isis are aiming to validate at least a dozen targets over the term of the agreement. (See BioWorld Today, Sept. 10, 2013.)

Isis will be responsible primarily for drug discovery and early development of antisense therapies, while Biogen will be responsible for the creation and development of small-molecule treatments and biologics.

Messenger RNA therapeutics was a hallmark of Moderna Therapeutics Inc.’s $240 million up-front licensing deal with Astrazeneca for the technology still at the preclinical stage. Under the terms, London-based Astrazeneca gets exclusive access to select targets of its choice in cardiometabolic diseases, as well as selected targets in oncology, over a period of up to five years, and Moderna, of Cambridge, Mass., could get as much as $180 million more if three unspecified technical milestones are reached. The pharma has the option to pick as many as 40 drug products for clinical development, and Moderna stands to gain milestone payments related to clinical and commercial progress, along with royalties on drug sales ranging from high single digits to low double digits for each product.

The largest dollar deal value encompasses the cancer stem cell (CSC) space, with the $177.25 million up-front deal between Oncomed Pharmaceuticals Inc. and Celgene Corp., which included $22.25 million as an equity investment and gives the latter options to as many as six candidates.

At the forefront is demcizumab, undergoing phase Ib testing in non-small-cell lung cancer (NSCLC) and pancreatic cancer. Demcizumab targets Delta-like ligand 4 (DLL4), an activator of Notch signaling. (See BioWorld Today, Dec. 4, 2013.)

If all the contingent payments are made under this deal it will be worth a total of $3.3 billion.

Also making the ballot form was Ablynx NV, which signed an $840 million licensing deal with Abbvie Inc. for its ALX-0061 nanobody targeted against the cytokine interleukin-6 receptor (IL-6R), in the treatment of rheumatoid arthritis and systemic lupus erythematosus.

Of that amount, $175 million is to be paid up front, helping to fund completion of phase II development by Ablynx, with $665 million in potential milestones up to commercialization to be followed by double-digit royalties on sales of any products to reach market.

A pharma-pharma deal rounds out the nominees. It is an interesting one that involves Pfizer Inc.’s pact with Eli Lilly and Co., which will pay $200 million up front for tanezumab, a human MAb antinerve growth factor for osteoarthritis and pain, once the FDA addresses its hold on the program, and another $350 million in regulatory milestones and $1.23 billion in sales milestones.

It will be a tough choice to make a selection because all of the candidate deals have merit.

Editor’s note: To cast your vote go to: http://www.allicense.com/next/deal-of-the-year. Winners will be announced at Allicense 2014: The Next Generation of Dealmaking, which will be held in San Francisco, April 29-30. Visit Allicense.com to register or to learn more information about this year’s meeting.