Continuing its trend started last year, Novartis AG is offering another $500-million-plus total package for biotech innovation, this time licensing development and commercialization rights to BCR-ABL inhibitors from SGX Pharmaceuticals Inc.
The inhibitors are designed to treat drug-resistant chronic myelogenous leukemia and could provide an important alternative to patients who don’t respond to the current standard of care, Gleevec.
The deal calls for San Diego-based SGX to receive $25 million in up-front payments and an equity investment from Novartis. When added to potential milestone payments and a minimum of two years of research funding, SGX could receive more than $515 million total through the collaboration, as well as royalties.
"We felt that a collaboration with a major player was the best way of addressing this market," said Mike Grey, SGX’s president and CEO. "There is no major player, no better player in CML than Novartis, which has had tremendous success with Gleevec."
Approved in 2001, Gleevec quickly has become the standard of care for Philadelphia chromosome-positive (Ph+) CML patients. The drug had sales of $2.1 billion last year. But a subset of patients have developed resistance to the drug, and that’s where SGX’s BCR-ABL inhibitors come into play.
"While there are some other agents in development, we have a compound that addresses all of the significant resistant mutations, including the very challenging T315I, which nobody has been able to address," Grey told BioWorld Today.
New York-based Innovive Pharmaceuticals Inc., is a young start-up company working in the space. It licensed rights to a dual Bcr-ABL/Lyn kinase inhibitor in January from Nippon Shinyaku Co. Ltd., of Kyoto, Japan. Research published about the compound show it demonstrated activity in vitro in 12 of 13 Gleevec-resistant cell lines. (See BioWorld Today, Jan. 6, 2006.)
CML is a malignant cancer of the bone marrow that causes abnormal growth of white blood cells. About 4,600 new cases are diagnosed annually and account for 7 percent to 20 percent of all leukemia cases, according to figures from the National Institutes of Health.
The disease is associated with the abnormal "Philadelphia" chromosome. Gleevec extended life to more than 54 months in 90.3 percent of patients who received the drug in the IRIS study, the largest clinical trial to date for Ph+CML patients. The therapy works by inhibiting the action of the enzyme BCR-ABL tyrosine kinase.
But because patients with the disease live longer, certain patients develop resistance to Gleevec, leaving them with bone marrow transplantation and high-dose chemotherapy and radiation as their only option for further treatment.
SGX said one of its BCR-ABL inhibitors could be used as a monotherapy in second-line treatment of CML, or in combination with Gleevec or another agent in first-line treatment. Lead drug candidates have exhibited activity against wild-type and drug-resistant BCR-ABL mutants, including T315I, which is considered among the most challenging.
The inhibitors were discovered using SGX’s FAST (Fragments of Active Structures) technology, which is based on a library of about 1,000 structurally diverse, low-molecular-weight compounds, and integrates a high-throughput capability.
Of the 26,000 patients living in the U.S. with CML, about 4 percent develop resistance to Gleevec. But the largest market opportunity for a BCR-ABL inhibitor is in its use in combination with Gleevec or other agents to treat high-risk patients, or about 40 percent of those newly diagnosed.
"It certainly has a very significant market potential," Grey said, "and I think the economics of the transaction with Novartis reflect" that they agree with the size of the opportunity. Assuming development goes well, the companies could be filing a new drug application seeking accelerated approval sometime in 2009, he added.
In terms of the financials, Grey said that the milestones include "significant near-term" payments as the company moves into the clinic sometime next year with an inhibitor for relapsed and refractory patients. Most of the up-front money is cash, and the $515 million total value "could be earned with one compound" and additional indications, he said, adding that the royalties are "attractive, given the stage of the program."
Before Novartis takes over development, SGX will complete preclinical studies of the lead candidate, submit an investigational new drug application with the FDA and complete the first Phase I study. Then, Novartis will be responsible for all further clinical development and commercialization.
SGX retains an option to co-commercialize in the U.S. any oncology products, with plans to use a 25-person sales force that it will build to market Troxatyl. That product could be launched in the second half of 2007 if it completes its ongoing Phase II/III trial and receives approval to treat third-line acute myelogenous leukemia.
Novartis has signed three prior deals in the last year worth more than $500 million. The SGX deal marks the fourth.
In June, the Basel, Switzerland-based company partnered with Anadys Pharmaceuticals Inc., of San Diego, in an agreement worth up to $570 million to develop ANA975 and additional Toll-like receptor 7 oral prodrugs for hepatitis B and C and other infectious diseases. The following September, the company signed on with Alnylam Pharmaceuticals Inc., of Cambridge, Mass., in a deal potentially worth a total of $700 million, which is focused on therapeutics based on RNA interference. And in December, Novartis gained rights to Astex Therapeutics Ltd.’s cell-cycle inhibitor AT9311, and an option for AT7519, in an agreement that could mean $520 million for the Cambridge, UK-based company.
Earlier this month, Novartis signed a high-paying agreement with Infinity Pharmaceuticals Inc., also of Cambridge, Mass., to discover and commercialize drugs targeting Bcl-2 protein family members for treating a range of cancers. Total payments to Infinity could exceed $400 million, plus royalties. (See BioWorld Today, March 7, 2006.)
Novartis is a "great collaborator," Grey said, "and we’re looking forward to working with them to rapidly bring forward potential new treatments."