
Astra deals add to ballooning up-front payments
The brace of licensing deals unveiled by AstraZeneca today are remarkable for their generous up-front payments – but not as remarkable as they might once have been. An analysis of the biggest up-front outlays of the past 10 years shows that these large fees are becoming more common.
The top spot is taken by Pfizer’s $850m swoop on Merck KGaA’s checkpoint inhibitor avelumab back in November. The larger of Astra’s deals, under which Celgene has acquired certain rights to another anti-PD-L1, MEDI4736, for $450m, comes in at number four (see table below). But one fact illustrates the growing willingness of companies to stake big money up front: of the top 15 deals of the past decade, all but two were forged in the last five years.
And this trend has been accelerating since then: five of these same 15 licences were agreed in the past 12 months.
EP Vantage looked at up-front payments a year ago, prompted by Celgene’s $710m up-front bid for Nogra Pharma’s GED-0301. The antisense oligonucleotide for Crohn’s disease was the subject of what then was the biggest sign-up fee in biopharma’s history (Celgene’s record-breaking deal hangs on phase II data, April 25, 2014).
Upping the ante
The analysis below shows how things have changed since then. This covers deals struck over R&D-stage products within the past 10 years.
Pfizer for instance obtained worldwide rights to Opko Health’s growth hormone project Lagova earlier this year. The deal included provision for a further $275m in milestone payments – $20m less than the up-front. The risk inherent in such a front end-loaded deal was perhaps mitigated slightly by Lagova being in phase III trials – and by the companies’ estimate of the global growth hormone market being worth more than $3bn.
Another asset in late-stage R&D is Infinity Pharmaceuticals’ blood cancer project duvelisib, also in phase III. AbbVie paid $275m to secure a profit share in the US and a royalty elsewhere. This arrangement was more weighted towards milestones than the Pfizer/Opko pact, with AbbVie promising an additional $405m should duvelisib reach market.
But it is Pfizer’s willingness to fork over the best part of a billion dollars for Merck KGaA’s anti-PD-L1 antibody MSB0010718C, now known as avelumab, that rewrote the licensing rules (German Merck no longer the immuno-oncology underdog, November 17, 2014). Immuno-oncology might have been the stand-out area of 2014, and the deal did see Pfizer essentially buy half of the asset under a global alliance. But even so this was a huge play for a phase II asset. With milestones totalling up to $2bn, Pfizer is obviously hugely bullish about its chances.
If companies remain willing to make these kinds of bets it will surely not be long before the sector sees its first $1bn-plus up-front payment.
Biopharma's biggest licensing deals by up-front payment – the top 15 of the past 10 years | |||||
Project | Company | Source | Deal date | Status at deal | Up-front ($m) |
Avelumab | Pfizer | Merck KGaA | 2014 | Phase II | 850 |
GED-0301 | Celgene | Nogra Pharma | 2014 | Phase II | 710 |
Fotagliptin Benzoate + Pan-HER Inhibitor* | Sellas Life Sciences | Fosun | 2013 | Preclinical | 518 |
MEDI4736 | Celgene | AstraZeneca | 2015 | Phase III | 450 |
Bardoxolone methyl | Abbott (now AbbVie) | Reata | 2010 | Phase II | 450 |
Tradjenta + Jardiance | Eli Lilly | Boehringer Ingelheim | 2011 | Phase III | 409 |
RTA 404 + 403 | AbbVie | Reata | 2011 | Preclinical | 400 |
Roxadustat | AstraZeneca | FibroGen | 2013 | Phase III | 350 |
Lagova | Pfizer | Opko Health | 2015 | Phase III | 295 |
Alzheimer’s Disease Program | Merck & Co | Alectos Therapeutics | 2010 | Research | 289 |
Alnylam/Roche RNAi collaboration | Roche | Alnylam | 2009 | Research | 289 |
Duvelisib | AbbVie | Infinity | 2014 | Phase III | 275 |
Eliquis | Pfizer | Bristol-Myers Squibb | 2007 | Phase III | 250 |
IPH2201 | AstraZeneca | Innate Pharma | 2015 | Phase II | 250 |
mRNA Therapeutics | AstraZeneca | Moderna Therapeutics | 2013 | Research | 240 |
*Deal terminated after eight months owing to Sellas failing to settle a payment. |
To contact the writer of this story email Elizabeth Cairns or Edwin Elmhirst in London at news@epvantage.com or follow @EPVantage on Twitter