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.

Norbert Bischofberger. Kronos

Backed by some of the biggest names in biotech, Nor­bert Bischof­berg­er gets his megaround for plat­form tech out of MIT

A little over a year ago when I reported on Norbert Bischofberger’s jump from the CSO job at giant Gilead to a tiny upstart called Kronos, I noted that with his connections in biotech finance, that $18 million launch round he was starting off with could just as easily have been $100 million or more.

With his first anniversary now behind him, Bischofberger has that mega-round in the bank.

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Francesco De Rubertis

Medicxi is rolling out its biggest fund ever to back Eu­rope's top 'sci­en­tists with strange ideas'

Francesco De Rubertis built Medicxi to be the kind of biotech venture player he would have liked to have known back when he was a full time scientist.

“When I was a scientist 20 years ago I would have loved Medicxi,’ the co-founder tells me. It’s the kind of place run by and for investigators, what the Medicxi partner calls “scientists with strange ideas — a platform for the drug hunter and scientific entrepreneur. That’s what I wanted when I was a scientist.”

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Af­ter a decade, Vi­iV CSO John Pot­tage says it's time to step down — and he's hand­ing the job to long­time col­league Kim Smith

ViiV Healthcare has always been something unique in the global drug industry.

Owned by GlaxoSmithKline and Pfizer — with GSK in the lead as majority owner — it was created 10 years ago in a time of deep turmoil for the field as something independent of the pharma giants, but with access to lots of infrastructural support on demand. While R&D at the mother ship inside GSK was souring, a razor-focused ViiV provided a rare bright spot, challenging Gilead on a lucrative front in delivering new combinations that require fewer therapies with a more easily tolerated regimen.

They kept a massive number of people alive who would otherwise have been facing a death sentence. And they made money.

And throughout, John Pottage has been the chief scientific and chief medical officer.

Until now.

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Chas­ing Roche's ag­ing block­buster fran­chise, Am­gen/Al­ler­gan roll out Avastin, Her­ceptin knock­offs at dis­count

Let the long battle for biosimilars in the cancer space begin.

Amgen has launched its Avastin and Herceptin copycats — licensed from the predecessors of Allergan — almost two years after the FDA had stamped its approval on Mvasi (bevacizumab-awwb) and three months after the Kanjinti OK (trastuzumab-anns). While the biotech had been fielding biosimilars in Europe, this marks their first foray in the US — and the first oncology biosimilars in the country.

Seer adds ex-FDA chief Mark Mc­Clel­lan to the board; Her­cules Cap­i­tal makes it of­fi­cial for new CEO Scott Bluestein

→ On the same day it announced a $17.5 million Series C, life sciences and health data company Seer unveiled that it had lured former FDA commissioner and ex-CMS administrator Mark McClellan on to its board. “Mark’s deep understanding of the health care ecosystem and visionary insights on policy reform will be crucial in informing our thinking as we work to bring our liquid biopsy and life sciences products to market,” said Seer chief and founder Omid Farokhzad in a statement.

Daniel O'Day

No­var­tis hands off 3 pre­clin­i­cal pro­grams to the an­tivi­ral R&D mas­ters at Gilead

Gilead CEO Daniel O’Day’s new task hunting up a CSO for the company isn’t stopping the industry’s dominant antiviral player from doing pipeline deals.

The big biotech today snapped up 3 preclinical antiviral programs from pharma giant Novartis, with drugs promising to treat human rhinovirus, influenza and herpes viruses. We don’t know what the upfront is, but the back end has $291 million in milestones baked in.

Vas Narasimhan, AP Images

On a hot streak, No­var­tis ex­ecs run the odds on their two most im­por­tant PhI­II read­outs. Which is 0.01% more like­ly to suc­ceed?

Novartis CEO Vas Narasimhan is living in the sweet spot right now.

The numbers are running a bit better than expected, the pipeline — which he assembled as development chief — is performing and the stock popped more than 4% on Thursday as the executive team ran through their assessment of Q2 performance.

Year-to-date the stock is up 28%, so the investors will be beaming. Anyone looking for chinks in their armor — and there are plenty giving it a shot — right now focus on payer acceptance of their $2.1 million gene therapy Zolgensma, where it’s early days. And CAR-T continues to underperform, but Novartis doesn’t appear to be suffering from it.

So what could go wrong?

Actually, not much. But Tim Anderson at Wolfe pressed Narasimhan and his development chief John Tsai to pick which of two looming Phase III readouts with blockbuster implication had the better odds of success.

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On a glob­al romp, Boehringer BD team picks up its third R&D al­liance for Ju­ly — this time fo­cused on IPF with $50M up­front

Boehringer Ingelheim’s BD team is on a global deal spree. The German pharma company just wrapped its third deal in 3 weeks, going back to Korea for its latest pipeline pact — this time focused on idiopathic pulmonary fibrosis.

They’re handing over $50 million to get their hands on BBT-877, an ATX inhibitor from Korea’s Bridge Biotherapeutics that was on display at a science conference in Dallas recently. There’s not a whole lot of data to evaluate the prospects here.

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Servi­er scoots out of an­oth­er col­lab­o­ra­tion with Macro­Gen­ics, writ­ing off their $40M

Servier is walking out on a partnership with MacroGenics $MGNX — for the second time.

After the market closed on Wednesday MacroGenics put out word that Servier is severing a deal — inked close to 7 years ago — to collaborate on the development of flotetuzumab and other Dual-Affinity Re-Targeting (DART) drugs in its pipeline.

MacroGenics CEO Scott Koenig shrugged off the departure of Servier, which paid $20 million to kick off the alliance and $20 million to option flotetuzumab — putting a heavily back-ended $1 billion-plus in additional biobuck money on the table for the anti-CD123/CD3 bispecific and its companion therapies.