Neu­rode­gen­er­a­tion star De­nali nabs a cash-rich, $1B-plus Alzheimer’s part­ner­ship with Take­da

Take­da is on a roll this morn­ing.

Right along­side its $630 mil­lion ac­qui­si­tion deal for TiGenix, Take­da is an­nounc­ing that it has set out to build up its port­fo­lio of ex­per­i­men­tal Alzheimer’s drugs with a high-pro­file team at De­nali Ther­a­peu­tics that’s work­ing on some new ap­proach­es to neu­rode­gen­er­a­tion.

De­nali, fresh off its big $280 mil­lion biotech IPO $DNLI from last De­cem­ber, will put its tech to work in an un­usu­al­ly rich pre­clin­i­cal deal for three pro­grams that Take­da can op­tion for shared clin­i­cal de­vel­op­ment and mar­ket­ing rights. And Take­da will pay $155 mil­lion in cash — part up­front and part eq­ui­ty buy — to get De­nali start­ed while com­mit­ting up to $85 mil­lion for near term pre­clin­i­cal mile­stones.

In an ex­clu­sive pre­view to to­day’s news, De­nali ex­ecs told me that they can dis­close that the deal with Take­da cov­ers their two list­ed Alzheimer’s projects in the pre­clin­i­cal pipeline, which us­es new an­ti­body trans­port ve­hi­cles — or ATVs — for a BACE1 ap­proach to tau and an­oth­er on TREM2. The third pro­gram, and the dis­ease it in­volves, hasn’t sur­faced yet and isn’t be­ing dis­closed now.

“De­liv­er­ing suf­fi­cient con­cen­tra­tion of drug to the brain has been a ma­jor chal­lenge” in Alzheimer’s re­search, says De­nali CEO Ryan Watts. And it’s been “one of the key rea­sons for fail­ure in the past.” The ATVs they’ve built can do just that, he adds, slip­ping through the blood brain bar­ri­er and giv­ing De­nali’s tar­get­ed drugs a leg up over a host of ri­vals.

With an ag­gres­sive team out of near­by Genen­tech, De­nali has been build­ing a pipeline of neu­rode­gen­er­a­tion drugs that are look­ing to treat ge­net­i­cal­ly de­fined pa­tient pop­u­la­tions, look­ing to con­struct new ther­a­pies on the rub­ble of more than a decade’s worth of re­peat fail­ures.

This is their first big li­cens­ing pact with a ma­jor phar­ma play­er with a glob­al mar­ket­ing reach. And it’s not like­ly to be their last.

Here’s the full break­down on the num­bers:

Take­da is pay­ing $40 mil­lion up­front, with an added $5 mil­lion mile­stone sweet­en­er and $110 mil­lion for a chunk of stock at $26.10 a share.

If Take­da takes all three op­tions, which costs $5 mil­lion in an op­tion fee on each, there’s up to $707.5 mil­lion in reg­u­la­to­ry and clin­i­cal mile­stones and $225 mil­lion in sales mile­stones.

Any­thing go­ing for­ward in­to Phase I will be joint­ly paid for and joint­ly re­ward­ed by any prod­ucts that reach the mar­ket­place.

Dan Cur­ran

Reach­ing the mar­ket­place, though, has proved to be a near im­pos­si­ble task in Alzheimer’s over the past 15 years. Alzheimer’s has de­feat­ed a multi­bil­lion-dol­lar ef­fort by a mix of the world’s biggest and small­est com­pa­nies, build­ing hopes that have come crash­ing down af­ter each new round of Phase III da­ta.

So why is Take­da will­ing to bet large sums at the be­gin­ning like this?

“We’ve been look­ing at tar­gets we think are high­ly amenable if you have the right set of tools,” says Dan Cur­ran, who heads Take­da’s Cen­ter for Ex­ter­nal In­no­va­tion. And that led them to a deep ap­pre­ci­a­tion of the De­nali team. “We talked for some time. This tech plat­form looks like it has legs, and that led us to make the leap.”

The an­swer, in part, al­so lies in De­nali’s suc­cess­ful IPO (though the stock price has since waned), with am­ple back­ing for an out­ing for a biotech that still has a long way to go to prove that its ge­net­ic ap­proach in defin­ing spe­cif­ic groups of pa­tients can pave the way to suc­cess af­ter so much fail­ure.

Alex Schuth

So why Take­da?

They earned it, says the De­nali team, with plen­ty of di­rect in­volve­ment from R&D chief Andy Plump down to un­der­score their will­ing­ness to pitch in.

“We have set a high bar on struc­ture and the terms, with re­spect to the part­ner with whom we team up,” says COO Alex Schuth. “This is our first deal with a ma­jor phar­ma com­pa­ny,” and if it all works out, they’ll al­so be com­mer­cial­iz­ing these drugs to­geth­er.

“We aim to build a ful­ly in­te­grat­ed com­pa­ny,” says CFO Steve Krognes, and this deal was built with that in mind. It is a “true part­ner­ship,” shar­ing costs, de­vel­op­ment work and a sales force — if it comes to that.

Take­da chief sci­en­tist “Andy Plump is very in­volved and has been from day 1,” adds Watts. “He is the cham­pi­on of this deal and that’s what we are look­ing for.”

The Japan­ese com­pa­ny un­der Christophe We­ber has been rip­ping up its glob­al R&D struc­ture and putting a new one in its place un­der Boston-based Plump.

Roger Perlmutter, Merck R&D chief (YouTube)

UP­DAT­ED: Mer­ck makes a triple play on Covid-19: buy­ing out a vac­cine biotech, part­ner­ing on an­oth­er pro­gram and adding an an­tivi­ral to the mix

Merck is making a triple play in a sudden leap into the R&D campaign against Covid-19.

Tuesday morning the pharma giant simultaneously announced plans to buy an Austrian biotech that has been working on a preclinical vaccine candidate, added a collaboration on another vaccine with the nonprofit IAVI and inked a deal with Ridgeback Biotherapeutics on an early-stage antiviral.

The deal with IAVI covers recombinant vesicular stomatitis virus (rVSV) technology that is the basis for Merck’s successful Ebola Zaire virus vaccine. That’s going into the clinic later this year.

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About Avance Clinical

Avance Clinical is an Australian owned Contract Research Organisation that has been providing high-quality clinical research services to the local and international drug development industry for 20 years. They specialise in working with biotech companies to execute Phase 1 and Phase 2 clinical trials to deliver high-quality outcomes fit for global regulatory standards.

As oncology sponsors look internationally to speed-up trials after unprecedented COVID-19 suspensions and delays, Australia, which has led the world in minimizing the pandemic’s impact, stands out as an attractive destination for early phase trials. This in combination with the streamlined regulatory system and the financial benefits including a very favourable exchange rate and the R & D cash rebate makes Australia the perfect location for accelerating biotech clinical programs.

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But with investors still clearly focused on biotech during the pandemic, a lot of things are going faster now. Including IPOing, which is sizzling for the right companies.

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Ax­o­vant spin­out Arvelle ups Se­ries A haul, de­ploy­ing $200M-plus to com­mer­cial­ize epilep­sy drug in Eu­rope

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Long considered one of the most influential regulators in the agency, if not its single most powerful official when it counts, Woodcock is being detached to devote herself full-time to the White House’s special project to fast-forward new drugs and vaccines for the pandemic. The move comes a week after some quick reshuffling as Woodcock and CBER chief Peter Marks joined Operation Warp Speed. Initially they opted to recuse themselves from any FDA decisions on pandemic treatments and vaccines, after consumer advocates criticized the move as a clear conflict of interest in how the agency exercises oversight on new approvals.

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Andrew Hopkins, Exscientia founder and CEO (Exscientia)

Af­ter years of part­ner­ships, AI biotech Ex­sci­en­tia lands first ma­jor fi­nanc­ing round at $60M

After years racking up partnerships with biotechs and Big Pharma, the AI drug developer Exscientia has landed its first large financing round.

The UK-based company raised $60 million in a Series C round led by Novo Holdings — more than double the $26 million it garnered in a Series B 18 months ago. The round will help further the company’s expansion into the US and further what it calls, borrowing a term from the software world, its “full-stack capabilities,” i.e. its ability to develop drugs from the earliest stage to the market.

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Sanofi — which has been decoupling from Regeneron for more than a year now — bought in big in early 2013, back when Regeneron’s stock was going for around $165 a share. Small investors flocked to the deal, buzzing about an imminent takeover. The buyout chatter wound down long ago.

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Piv­otal myas­the­nia gravis da­ta from ar­genx au­gur well for FcRn in­hibitors in de­vel­op­ment

Leading the pack of biotechs vying for a piece of the generalized myasthenia gravis (gMG) market with an FcRn inhibitor, argenx on Tuesday unveiled keenly anticipated positive late-stage data on its lead asset, bringing it one step closer to regulatory approval.

Despite steroids, immunosuppressants, acetylcholinesterase inhibitors, and Alexion’s Soliris, patients with the rare, chronic neuromuscular disorder (more than 100,000 in the United States and Europe) don’t necessarily benefit from these existing options, leaving room for the crop of FcRn inhibitors in development.

Janet Woodcock, director of the Center for Drug Evaluation and Research (AP Images)

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