The Checklist

Annals of Medicine: The Checklist: Reporting & Essays: The New Yorker: If something so simple can transform intensive care, what else can it do? by Atul Gawande"

New Trends in Biotech - Pharma Alliance Agreements at the LES Annual Meeting in Vancouver

The New Deal: Competing in a Global Economy

Licensing Executives Society

October 14-18, 2007
Pan Pacific Hotel and Fairmont Waterfront Hotel
Vancouver, Canada

Wednesday, 2:00 p.m. - 3:15 p.m.

5-E NEW TRENDS IN BIOTECH - PHARMA ALLIANCE AGREEMENTS
Intermediate/Advanced
Market pressures are driving biotechs and pharmas to stretch the bounds of traditional licenses in their strategic alliances. The creative approaches these companies have brought to bear can be extracted from publicly filed alliance agreements. Alliance partners seeking to maximise value for themselves and each other are extending the traditional structure of the alliance. Some examples: Alliances are allowing maturing biotechs to retain more of the value of the opportunity by bearing more of the expense and risk of development. More alliances are arising early in the development process. In order to maximise each party’s flexibility, alliances are structured to give each party multiple opportunities to opt in or opt out of development and commercialisation. Biotechs are retaining more rights, including co-promotion rights, and obtaining other quids to help grow their businesses as part of these collaborations. All trends discussed will be detailed with multiple examples.
James Hatton, Partner, Farris, Vaughan, Wills & Murphy LLP

My “Definitive” List of Alliances of 2006

I have about 100 alliance agreements collected here. Of that group, around 25 I consider to be noteworthy.

To create a subset for further analysis, I collected the list of licenses and alliances nominated for either Recombinant Capital's Breakthrough Alliance of the Year or the Scrip Awards for 2006. From those lists, nine agreements have been publicly disclosed:

• Affymax Takeda Collaboration And License Agreement of June 27, 2006
• Alnylam Novartis Research Collaboration and License Agreement of October 12, 2005
• AtheroGenics IPR Astrazeneca License and Collaboration Agreement of December 21, 2005
• HGS Novartis Collaboration Agreement of June 5, 2006
• MedImmune Infinity Collaboration Agreement of August 25, 2006
• Nastech P&G Product Development and License Agreement of January 27, 2006
• Protherics AstraZeneca Patent and Know-How License Agreement of December 7, 2005
• Trubion Wyeth Collaboration and License Agreement of December 19, 2005
• Vertex Janssen Collaboration Agreement dated June 30, 2006

Alnylam Novartis Collaboration and License Agreement

defined number of selected targets to discover and develop therapeutics based on RNA interference (“RNAi”)
up-front payments totaling M$10
Novartis will provide research funding and milestone payments as well as royalties
Novartis with a non-exclusive option to integrate the Company’s intellectual property relating to certain RNAi technology into Novartis’ operations under certain circumstances (the “Integration Option”) for additional payments
Alnylam retains the right to commercialize compounds not selected by Novartis, provided that Novartis has a right of first offer with respect to any such target.

Alnylam recognized $5.5 million and $14.3 million in revenues during the three and nine months ended September 30, 2006 and has $10.2 million of deferred revenue on its balance sheet related to such agreements at September 30, 2006.

Affymax Takeda Collaboration and License Agreement

Phase 2b for anemia in dialysis, pre-dialysis and cancer chemotherapy patients

Structure:

• Co-commercialize with equal profit sharing in the US
• Takeda commercializes outside the US
• Affymax supplies drug substance

Financial:

• Affymax to receive M$105 upfront
• development and regulatory milestones to M$280
• commercial milestones to M$150
• jointly responsible for U.S. development costs; majority borne by Takeda
• outside US, Takeda bears development costs and pays a royalty on sales

Recombinant Capital's Breakthrough Alliance Award for 2006

Today Recombinant Capital has announced its nominees for the 11th Annual Breakthrough Alliance Award.

This makes for another third party source of the most important alliances of 2006. Recombinant Capital's nominees are:

• GSK Epix Drug Discovery and Co-Development Alliance of 12/06 (not yet disclosed)
  
• Janssen Vertex Co-Development Agreement of 6/06
• MedImmune Infinity Co-Development and Commercialization Alliance of 8/06
• Novartis Human Genome Sciences Co-Development Agreement of 6/06
• Takeda Affymax Co-Development Agreement of 6/06

Sources of Biotech Alliances for 2006

I monitor the public release of biotech collaboration agreements during the year, but I am sure I miss as many as I find. I keep a list of the ones that I think are interesting.

In preparing for a presentation last year at BPN 2006, in addition to my own watching, I used three sources of agreements to consider: Burrill and Company's quarterly reports, the Biotech CEO's conference, and the Scrip Awards.

This year, Burrill has not published the quarterly reports past April, 2006. I don't see anything posted about the Biotech CEO's conference.

That leaves the Scrip Awards. Here are the nominees for Best Partnership Alliance of the Year and for the Best Licensing Deal of the Year:




































The winner of the Best Partnership Alliance was: Atherogenics and AstraZeneca, and the Licensing Deal of the Year was Protherics and AstraZeneca.

Links to a growing list of the full text of the nominated agreements which have been publicly disclosed are posted to my agreement collection here: ScripAwards 2006 Agreements.

Update: Recombinant Capital has released its nominees for Breakthrough Alliance of 2006.

February 12, 2007: Abiomed; ImmunoGen; Palatin AstraZeneca; &c.

• Abiomed Medix Distribution Agreement for Japan of November 4, 2006
• ImmunoGen Sanofi-aventis License Agreement of October 5, 2006
• ImmunoGen Sanofi-aventis Option and License Agreement of December 21, 2006
• ImmunoGen Genentech License Agreement of July 22, 2005
• Palatin AstraZeneca Research Collaboration and License Agreement of January 30, 2007
• Neurobiological Technologies Merz Children’s Medical Center Corporation License and Cooperation Agreement of April 16, 1998
• Quick-Med HanesBrands Development and Exclusive Option Agreement of February 1, 2007

VaxGen; Optimer; Sun; Accuray agreements

• VaxGen Nexol KT&G Amended and Restated Joint Venture Agreement of December 30, 2004
• VaxGen Celltrion Termination Agreement of December 30 , 2004
• VaxGen Celltrion Surrender Agreement of December 30 , 2004
• VaxGen Celltrion Technical Support and Services Agreement of December 30 , 2004
• Sloan-Kettering Optimer Amended License Agreement of December 22, 2005
• Sun Caraco Generics Distribution Agreement of January 19, 2007
• Accuray Schonberg Manufacturing License and Technology Transfer Agreement of January 28, 1991
• Accuray Forte Automation Systems Patent and Trademark License Agreement of November 29, 2006

Links for 2007-02-07

• Altus Lonza Manufacturing and Supply Agreement of November 16, 2006
• Altus Genentech Collaboration and License Agreement of December 19, 2006
• ArQule Chiang Scientific Advisory Board Agreement of January 26, 2007
• CytoDyn CBRI Exclusive License Agreement of January 1, 2007
• SurgiCount A Plus International Exclusive License and Supply Agreement of January 26, 2007
• Praecis Specialty European Pharma Asset Purchase Agreement of January 27, 2007
• Valentis Medarex Asset Purchase Agreement of January 26, 2007
• Brainstorm FIMA Collaboration Agreement of December 26, 2006
• Boston Life Sciences BioAxone Therapeutic License Agreement of December 28, 2006
• Synova Allendale License Agreement, of January 12, 2007
• Valentis Althea Non-Exclusive License Agreement of January 8, 2007
• NuVasive Radius Asset Purchase Agreement of January 23, 2007
• Carrington Mannatech Trademark License and Supply Agreement of January 25, 2007
• Endo Penwest Amended and Restated Strategic Alliance Agreement Amendment of 2007
  Royalty rates from 22% to 30% in the US
• Grant Life Sciences Intellectual Property Security Agreement of December 27, 2006
• Chemokine Salari Development Termination and Asset Purchase Agreement of December 29, 2006
• Critical Therapeutics Innovative Metabolics License Agreement of January 29, 2007

Some presentations on alliances by others

• Strategic Alliances by Alison Freeman Gleason (pdf)
• Licensing and Intellectual Property Concerns Relative to Pharmaceutical & Biotechnology Collaborations
  by Patricia A. Schreck and Michele M. Simkin (pdf)
• Biotech and Pharma M&A and Collaborations: Protecting the Deal and Preserving Your Upside by Linda Hogan, Clearview Projects (ppt)
• Quid Pro Quo Deals by Turner C., . PharmaDeals Review 39, August/September 2003 (pdf)

AtheroGenics IPR Astrazeneca License and Collaboration Agreement of December 21, 2005

AtheroGenics IPR Astrazeneca License and Collaboration Agreement of December 21, 2005 won the 2006 Scrip Awards for Best Partnership Alliance.

From the press release:

• upfront fee of $50 million
• development and regulatory milestones of up to $300 million
• progressively demanding sales performance related milestones of up to a further $650 million
• if successfully commercialized, AtheroGenics will be eligible for fees and milestones of up to $1 billion
• stepped royalties on product sales
  

Commercialization of AGI-1067 would also provide AtheroGenics with additional resources to begin its transition from a research and development organization to a commercial enterprise.

AstraZeneca will fund for a minimum of three years a 125-person AtheroGenics specialty sales force focused on the cardiology field in the U.S., which will co-promote both AGI-1067 and one other of AstraZeneca’s key cardiovascular drugs during that time.

AtheroGenics will retain responsibility for the ongoing ARISE Phase III clinical trial and for regulatory filings in the U.S.

AstraZeneca will have full responsibility for pre-commercialization activities involving the compound and oversee all aspects of the marketing, sales and distribution of AGI-1067 on a worldwide basis.

AstraZeneca will also be responsible for all non-U.S. regulatory filings.

Protherics AstraZeneca Patent and Know-How License Agreement of December 7, 2005

Protherics AstraZeneca Patent and Know-How License Agreement of December 7, 2005 won the Scrip Awards Licensing Deal of the Year for 2006.

From the Form 6-K of December 8, 2005:

• currently being prepared for a single phase III registration study in severe sepsis in line with guidance received at an end of phase II meeting with the FDA
• the initial target indication is severe sepsis
• AstraZeneca will be responsible for development
• Protherics will be primarily responsible for manufacturing, including the supply for clinical trials
• initial payment of GBP16.3 million
• potential total deal value, excluding royalties, of approximately GBP195 million
• GBP7.5 million equity investment in Protherics at a30 percent premium
• AstraZeneca will own approximately 4.3 percent of Protherics
• GBP171 million payable upon the achievement of milestones
• no milestone s related to sales performance
• royalties on global product sales of 20 percent of net sales
• additional payments for the commercial supply of the product and will invest to expand its manufacturing capacity accordingly.

Sucampo Takeda Collaboration; related Supply Agreement with R-Tech; Sucampo Contract Sales with Ventiv

• Sucampo Takeda Collaboration and License of October 29, 2004
• SucampoTakeda R-Tech Supply and Purchase Agreement of January 25, 2006
• Sucampo Ventiv Contract Sales Services Agreement of February 9, 2006
  Ventiv is providing a contract specialty sales force of 38 field sales representatives to market AMITIZA

Burrill and Company's Quarterly Report for Q1 2006

From Burrill and Company: Quarterly Reports: "Biotech Turns in Mixed Performance in Q1 2006 - San Francisco, CA - April 11, 2006". Too bad they seem to have stopped issuing these.

Where I have a link to the full text of these agreements in my agreement collection, I have added the link below. In the cases where the agreement has not been disclosed, I will link to a press release.

Company	Pharma/Biotech	Description	Est. Value ($M)
Trubion	Wyeth	Deal involves biopharmaceutical products to treat inflammatory disease and cancer.	800
Nastech Pharmaceuticals	Procter & Gamble Pharmaceuticals	Joint development of Nastech's parathyroid hormone (PTH1-34) nasal spray for the treatment of osteoporosis.	577
Idenix Pharmaceuticals	Novartis	Novartis licensed valopicitabine (NM283) Idenix’s lead compound for the treatment of hepatitis C.	525
SGX Pharma	Novartis	Research collaboration to develop inhibitors for chronic myelogenous leukemia.	515
Infinity Pharmaceuticals	Novartis	Alliance covers drugs targeting Bcl-2 protein family members for the treatment of a broad range of cancer indications.	400
Nuvelo	Bayer	Commercialization of alfimeprase, Nuvelo's lead Phase III product candidate, a thrombolytic.	385
Kai Pharma	Daichii Sankyo	Development of KAI-9803, with an initial focus on cardiovascular disease. KAI-9803, a delta Protein Kinase C (delta PKC) inhibitor, is a first-in-class agent for the prevention of myocardial tissue.	340
NicOx	Merck & Co.	Companies will collaborate on the development of new antihypertensive drugs.	340
Amira Pharmaceuticals	Roche	Roche will screen its compound repository against three targets and will transfer any hits to Amira. In exchange, Roche will have opt-in rights on two of the programs.	287
MethylGene	Pharmion	Development and commercialization of histone deacetylase inhibitors in North America, Europe, Middle East and certain other markets.	170

Vascular Solutions and King; Pharmacopeia and BMS; Pharmacopeia and GSK

• Sucampo Takeda Supplemental Agreement of February 1, 2006
• VascularSolutions King Thrombin Supply Agreement of January 9, 2007
• VascularSolutions King Device Supply Agreement of January 9, 2007
• VascularSolutions King License Agreement of January 9, 2007
• Pharmacopeia Bristol-Myers Squibb License Agreement of March 27, 2006
• Pharmacopeia GSK Product Development and Commercialization Agreement of March 24, 2006

Curis Genentech Collaboration; Army and Iomai; Army and VaxGen

• Curis Genentech Collaborative Research, Developement and License Agreement of June 11, 2003
• Walter Reed Army Institute of Research Iomai License Agreement of December 15, 1997
• U. S. Army Medical Research Institute of Infectious Diseases VaxGen License Agreement of October 7, 2003

Pharmacopeia GSK Product Development and Commercialization Agreement

From the March 31, 2006 10-Q:

GSK has an exclusive option, exercisable at defined points during the development process for each program (up to the point of clinical proof of concept), to license that program for a specified payment amount.

Upon licensing a program, GSK is obligated to conduct preclinical development and/or clinical trials and commercialize pharmaceutical products resulting from such licensed programs on a worldwide basis

If GSK does not exercise its option to license a program, the Company will retain all rights to that program and may continue to develop the program and commercialize any products resulting from the program, or it may elect to cease progressing the program and/or seek other partners for the further development and commercialization.

Under the terms of the GSK Agreement, the Company will receive up to $15.0 million in cash payments from GSK, including $5.0 million received in April 2006.

Up to the remaining $10.0 million will be payable to the Company upon its fulfillment of certain conditions related to the initial discovery activities to be conducted by the Company.

The Company’s role in the alliance is to (i) identify and (ii) advance molecules in chosen therapeutic programs into development candidates and (iii) subject to certain provisions in the agreement, further develop the candidates to clinical “proof of concept” (a demonstration of efficacy in man).

In addition the cash payments above, the Company is entitled to receive success-based milestone payments from GSK for each drug development program pursued under the alliance and the potential for double-digit royalties upon the successful commercialization by GSK of any product resulting therefrom.

The Company and GSK each have the right to terminate the GSK Agreement in its sole discretion under certain specified circumstances at any time during the term of the GSK Agreement. If the Company exercises its discretionary termination right at any time during the first five years of the term, under certain circumstances, it could be required to refund to GSK a portion of the up to $15.0 million referred to above.

In connection with the GSK Agreement, the Company issued two warrants to GSK for the purchase of common stock at a 25% premium.

Revenue will be recognized on a proportional performance basis as work progresses.

Current Trends and Provisions in Pharma-Biotech Strategic Alliances

Current Trends and Provisions in Pharma-Biotech Strategic Alliances (pdf)

by Randy Sunberg of Morgan Lewis

Indevus Valera Copromotion and Marketing Services Agreement

• Indevus Valera Copromotion and Marketing Services Agreement of December 11, 2006