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.
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%.
As such, it is unlikely that Mersana will see all of the $334m promised by Teva, although without doubt this news is a very encouraging sign for the private company and its platform technology.
XMT-1107 is a conjugate of Fleximer and a novel analog of fumagillin, an angiogenesis inhibitor with a distinct mode of action. These agents have had little success in the past, scuppered by pharmacokinetic issues and toxicity, but Mersana believes it has overcome these historical problems with its conjugate compound.
Fleximer is a biodegradable and bio-inert polymer, the basis of Mersana’s platform technology, which when chemically linked to other molecules appears to enhance their pharmacokinetic and safety profiles. The company’s most advanced Fleximer conjugate candidate, XMT-1001, recently reported positive phase I results.
The table below consists solely of single product pre-clinical deals. Many transactions at this stage are struck over platform technologies or a suite of products, but these were removed from the analysis to attempt to compare like with like.
As can be seen progress is slow, and recent news on a number of these candidates - Roche's RG7418, Glaxo's PTH analogs and Pfizer's CD-RAP - is thin on the ground.
With XMT-1107 due to enter phase I in the next couple of months, speedy process compared to some of the others below, Mersana will be hoping that a few more of those milestones flow in its direction.
|Top ten single product pre-clinical product deals since 2000|
|Rank||Company||Product||Pharmacological Class||Deal Partner/ Product Source||Status on Deal Date||Phase (Current)||Upfront Payment ($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|