West Coast Editor
After an almost year-long respite, Pfizer Inc. is throwing money on the biotech table again, this time entering an agreement to buy privately held Rinat Neuroscience Corp. for an undisclosed sum.
The deal came after "an extensive bidding war between some of the biggest pharmaceutical companies in the world," said David Pritchard, chief business officer for South San Francisco-based Rinat.
"I can tell you it's a big deal," he added, but Pfizer is requiring that all of Rinat's management keep mum on the price. Details likely will be disclosed in SEC filings later.
Last June, New York-based Pfizer made public its plan to take over Vicuron Pharmaceuticals Inc., of King of Prussia, Pa., for about $1.9 billion.
That news followed Pfizer's bid to grab San Diego-based Idun Pharmaceuticals Inc. for an undisclosed amount, a move that came about a month after Pfizer agreed to pay up to $527 million for Angiosyn Inc., of La Jolla, Calif. (See BioWorld Today, Jan. 25, 2005; Feb. 25, 2005; and June 17, 2005.)
The amount paid for Idun - about $298 million - emerged in Pfizer's 2005 annual report, filed with the SEC.
Rinat, with its lead product, RN624, an inhibitor of nerve growth factor in Phase II trials for osteoarthritis pain, also has in Phase I trials RN1219 for Alzheimer's disease. RN1219 is a humanized monoclonal antibody to the amyloid beta peptide that in preclinical models significantly reduced amyloid plaques in the brain.
Focused on neuroscience-based protein therapeutics, Rinat was founded in 2001 when Genentech Inc., also of South San Francisco, granted the firm broad licenses to its neuroscience assets. In late 2004, Genentech liked Rinat's Phase I progress well enough to exercise an option for the worldwide rights to RN624. (See BioWorld Today, Nov. 10, 2004.)
"We went to 10 firms that we thought would make potentially great partners [for the Alzheimer's drug], and we ended up getting nine term sheets," Pritchard said. "That's beyond anything I've seen in the 20 years I've been doing this."
The larger firms "had a tough time getting no for an answer," he added. "At the same time, in the December time frame, Genentech decided they did not want to pursue osteoarthitis pain, and that freed us to partner the drug elsewhere."
After Genentech pulled out, one of the would-be partners made an offer to buy the whole company, with its now unencumbered assets, and the bidding war started in January.
"These are first or best-in-class programs for major unmet medical needs," Pritchard said. "They're all monoclonal antibodies, and pharma companies are realizing that antibodies for things like pain are viable."
Another firm working in the amyloid-beta space is Salt Lake City-based Myriad Genetics Inc., which has Flurizan (R-flurbiprofen) for Alzheimer's disease in a Phase III trial.
Myriad, which licensed Flurizan in December 2000 from Encore Pharmaceuticals Inc., of Riverside, Calif., priced a public offering of its common stock to raise $129.5 million late last year. (See BioWorld Today, Nov. 7, 2005.)
Rinat board member Michael Ross, with SV Life Sciences in Foster City, Calif., said the value of RN624 was underplayed in media reports about the deal. Genentech "is a cancer company, so they're interested in acute pain," or subacute pain, such as post-surgical, he noted.
"Companies like Merck and Pfizer dominate the market in chronic pain, so if you're going to go after anything that remotely looks like chronic pain, [Pfizer is] the right company," he said.
"The big market is [pain that lasts for] years, obviously, and you'd have to go back to the morphine analogues for the last chronic pain drug approved that dealt with pain rather than inflammation," Ross said. "There's been nothing new in chronic pain for a very long time."
As for Alzheimer's, "no one even knows the market," he pointed out. "There's not a drug that treats the thing - just the symptoms right now. But it's tens of billions of dollars, potentially."
Ross said the trend of pharma firms buying out biotech companies with novel and promising, albeit early stage, compounds will continue.
"In the next two years, there may be as many as a dozen companies that will morph themselves into this," he said. Pfizer's acquisition of Rinat is expected to close in late April or early May.