West Coast Editor
In what's hailed as the largest vaccine adjuvant deal ever, Merck & Co. Inc. has pledged $30 million up front and as much as $425 million in potential milestone payments to Idera Pharmaceuticals Inc. for the broad use of Toll-like receptor agonists.
Whitehouse Station, N.J.-based Merck is providing $20 million in cash and buying $10 million worth of Idera stock at $5.50 per share, giving the pharma firm just less than 10 percent ownership. Idera gets milestone payments of up to $165 million if Merck makes successful vaccines in oncology, infectious disease and Alzheimer's, and $260 million more for follow-on indications in cancer.
Idera's stock (NYSE:IDP) closed Monday at $5.61, unchanged.
The exclusive worldwide rights granted to Merck include agonists for TLR7, TLR8 and TLR9. "We'll also be involved in a research collaboration with them for two years, and that's quite significant to us," said Sudhir Agrawal, CEO and chief scientific officer of Idera, which will double its research capacity as a result.
Work at Idera already has yielded the TLR9 agonists IMO-2055, in Phase II trials as a monotherapy for renal-cell carcinoma, and IMO-2125 for hepatitis C virus, soon to enter the clinic.
Robert Karr, president of Idera, said preliminary data from the Phase II study are expected in mid-2007, and he noted the non-dilutive cash from Merck will provide "great support for this large number of internal programs." Agrawal estimated Idera has about two years of cash in hand.
Money had not become a problem yet for Idera, but the day was coming. At the end of September, the Cambridge, Mass.-based firm had cash and cash equivalents of about $8 million. The following month, Idera drew down $4 million from $9.8 million in committed capital, which put the pro-forma cash position at $11.4 million, enough to operate through the second half of next year. Ren Benjamin, analyst with Rodman & Renshaw, predicted in a research report last month that the firm would need to raise capital or find a partner before then.
"The concept was that this asset can be explored properly with a pharma player who was sitting on the largest [number] of antigens," Agrawal told BioWorld Today. "We just found each other," he added, regarding Merck, and initial experiments were done under material transfer agreements.
Idera, formerly known as Hybridon Inc., also has a potential $136 million deal with Basel, Switzerland-based Novartis AG for TLR9 agonists to treat asthma and allergy. (See BioWorld Today, June 2, 2005.)
Along with the RCC trial, Idera has IMO-2055 in a dose-escalating Phase I/II trial at the Lombardi Comprehensive Cancer Center at Georgetown University Medical Center, where the Phase I part is evaluating the IMO-2055 in combination with gemcitabine and carboplatin in solid-tumor patients. The Phase II aspect will test the same combo as front-line therapy in non-small-cell lung cancer patients, after an optimal dosage regimen is chosen in the first part of the study.
In the journal Cancer Clinical Research, Idera scientists published work showing that its TLR9 agonist seems to impair the signaling pathway of epidermal growth factor receptor, thus boosting the anticancer activity of Erbitux (cetuximab), the compound for colorectal cancer from ImClone Systems Inc. and Bristol-Myers Squibb Co., both of New York.
Combo therapy might ultimately be the way to go for RCC, given the competitive landscape. Idera's drug would go up against the likes of Sutent (sunitinib), from New York-based Pfizer Inc., and Nexavar (sorafenib), from Onyx Pharmaceuticals Inc., of Emeryville, Calif., and West Haven, Conn.-based Bayer AG, both of which are indicated in kidney cancer and are undergoing trials in other tumor types. Approved for kidney cancer last December, Nexavar recently missed in a Phase III trial testing the compound against melanoma. The drug failed to improve progression-free survival when compared with placebo, and Onyx's shares took a 30 percent hit on the news. (See BioWorld Today, Dec. 5, 2006.)