Mersana seals chunky pre-clinical deal with Teva

Yesterday, Mersana Therapeutics announced a seemingly substantial licensing deal for a pre-clinical candidate, XMT-1107, revealing that Teva Pharmaceutical Industries will pay up to $334m for global rights to the product, a novel fumagillin analog.

Although distant bio-dollars will invariably inflate real deal values this transaction certainly appears to be highly priced for a compound that has yet to enter human trials, and would seem to support evidence of a trend towards increasingly expensive early stage transactions (Product deals continue decline in 2009 but early stage assets gain value, February 23, 2010). The analysis below would rank it as the fourth biggest single-product pre-clinical deal struck in the last decade (see table). Of course, this accolade should be tempered by the fact that given the huge developmental risks associated with drugs at this stage, it is highly unlikely that Mersana will see the full amount.

Clinical success

Case in point here is GlaxoSmithKline’s deal with Human Genome Sciences over Syncria, a GLP-1 agonist for diabetes, struck back in 2004 and the ninth most valuable deal in our analysis below. The transaction has without a doubt been successful clinically so far, having made it into phase III a year ago (Glaxo makes brave decision with phase III trials for Syncria, February 17, 2009).

The initiation of phase III triggered a $9m milestone payment from Glaxo, and as far as EP Vantagecan tell from press announcements other payments have been $7m on the completion of manufacturing and pre-clinical work back in 2005, and $5m when the IND was filed.

An upfront fee was paid but not disclosed, but was unlikely to have been substantial. So of the $182m deal value, $21m has been received so far, plus the upfront. It is likely that higher payments on successful pivotal data and approval will be pending and the original press release says other milestones would be due if other indications are developed, although work outside of type II diabetes has not been disclosed.

Based on previous milestones paid, it seems unlikely that Human Genome Sciences will receive more than $100m should Syncria make it all the way to market. Although this is lower than the deal value promoted at the time, for a pre-clinical product this is probably not a bad return, particularly considering the failure rate amongst candidates at this stage must be in excess of 90%.

Encouraging news

As such, it is unlikely that Mersana will see all of the $334m promised by Teva, although without doubt this news is a very encouraging sign for the private company and its platform technology.

XMT-1107 is a conjugate of Fleximer and a novel analog of fumagillin, an angiogenesis inhibitor with a distinct mode of action. These agents have had little success in the past, scuppered by pharmacokinetic issues and toxicity, but Mersana believes it has overcome these historical problems with its conjugate compound.

Fleximer is a biodegradable and bio-inert polymer, the basis of Mersana’s platform technology, which when chemically linked to other molecules appears to enhance their pharmacokinetic and safety profiles. The company’s most advanced Fleximer conjugate candidate, XMT-1001, recently reported positive phase I results.

Speedy progress

The table below consists solely of single product pre-clinical deals. Many transactions at this stage are struck over platform technologies or a suite of products, but these were removed from the analysis to attempt to compare like with like.

As can be seen progress is slow, and recent news on a number of these candidates - Roche's RG7418, Glaxo's PTH analogs and Pfizer's CD-RAP - is thin on the ground.

With XMT-1107 due to enter phase I in the next couple of months, speedy process compared to some of the others below, Mersana will be hoping that a few more of those milestones flow in its direction.

Top ten single product pre-clinical product deals since 2000
Rank Company Product Pharmacological Class Deal Partner/ Product Source Status on Deal Date Phase (Current) Upfront Payment ($m) Deal Value ($m) Deal Date
 1 Merck & Co SCH900105 Anti-hepatocyte growth factor (HGF) MAb AVEO Pharmaceuticals Pre-clinical Phase II  8  478  2007
 2 Merck & Co ADX63365 Metabotropic glutamate receptor 5 (mGluR5) antagonist Addex Pharmaceuticals Pre-clinical Pre-clinical  22  477  2008
 3 Bayer BiTE Antibody Program Anti-cancer MAb Micromet Pre-clinical Pre-clinical  7  384  2009
4 Teva Pharmaceutical Industries XMT-1107 Fumagillin analog conjugate Mersana Pre-clinical Pre-clinical - 334 2010
 5 Onyx Pharmaceuticals ONX 0801 Thymidylate synthase inhibitor BTG Pre-clinical Phase I  13  320  2008
 6 CombinatoRx ATL313 Adenosine A2A receptor agonist Clinical Data Pre-clinical Pre-clinical  -  252  2009
 7 Pfizer CD-RAP Cartilage growth factor Scil Technology Pre-clinical Pre-clinical  -  250  2008
 8 GlaxoSmithKline PTH analogs oral Parathyroid hormone analogue Unigene Laboratories Pre-clinical Phase I  -  216  2002
 9 GlaxoSmithKline Syncria Glucagon-like peptide 1 (GLP-1) agonist Human Genome Sciences Pre-clinical Phase III  -  182  2004
 10 Roche RG7418 Apolipoprotein B-100 (ApoB-100) MAb BioInvent International Pre-clinical Phase I  12  153  2007
Source: EvaluatePharma

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