Prothena’s partnership with Roche on Parkinson’s disease antibody PRX002 is the prelude to what will be a bigger event. The $45m in near-term payments should allow the Elan spinoff to focus its sizable cash pile on its lead candidate, the amyloidosis treatment NEOD001.
In what is another sign that overheating biotech valuations are shunting business development activities toward earlier-stage assets, the Swiss group has signed over a fair amount for a project that will not enter the clinic until sometime next year. Prothena’s candidate aims at a promising new target, alpha-synuclein, which may have been a strong incentive for Roche to partner so early.
In the business plan
The deal is worth $45m in an upfront payment and milestone on initiation of a phase I trial in the first half of 2014. In a call with analysts, Prothena executives said the majority of the $45m was related to the signing fee; that sum will be sufficient to fund clinical studies for a couple of years, according to the company.
The total deal value is worth $600m, based on developmental and commercial milestones, as well as ex-US royalties the executive team described as “up to double digit.” On filing of a biologics license application, Prothena will have the opportunity to opt-in on a 30% profit share in the US.
Chief executive Dale Schenk said Prothena’s plan had always been to out-license PRX002, formerly known as NEOD002 when it was part of Elan’s Neotope Biosciences subsidiary, while devoting much of its development muscle on the amyloidosis asset. The dealmaking competence suggests that there has been a positive benefit from the disintegration of Elan: making its onetime drug discovery outfit more nimble in business development (Elan dresses up for a date, but single life beckons, August 13, 2012).
Investors were pleased with the deal. They drove shares up 6% to $29.04 in early trading today following on yesterday’s post-market announcement of the deal. Shares of the California-based group have quadrupled since the spin-off last December, although the bio-run-up may be related more to the readout of phase I amyloidosis data.
New kid in town
As a scientific matter, PRX002 is in the rather new area of alpha-synuclein inhibition, which can claim few products in the clinic – QR Pharma has a compound called Posiphen, an inhibitor of amyloid precursor protein, tau and alpha-synuclein, in early stage research. Alpha-synuclein is a protein prominent in Lewy bodies and neurites, which form abnormal deposits on the inside of neurons that are hallmarks of many neurological disorders, including Parkinson’s disease.
Alpha-synuclein inhibition has attracted the likes of Pfizer and Lundbeck in addition to the biotechs like Biogen Idec and Alnylam Pharmaceuticals. With this deal, Roche could have a piece of one of the leading candidates in the space.
Prothena, meanwhile, is expected to reach what is regarded as a bigger corporate milestone early next year: phase I data for NEOD001 in amyloid light chain (AL) amyloidosis, a different form of the disease from the TTR subtype being addressed by Alnylam and Isis Pharmaceuticals. Early signs of efficacy are expected from the trial, and with the antibody remaining wholly owned by Prothena this readout will be a major catalyst.
Retaining full ownership of the rare-disease drug while out-licensing the candidate in the bigger indication to big pharma is probably a wise move for Prothena. Their progress is also a sign that Elan was wise to spin off its laboratories last year – a year stuck in limbo as Elan tried to sell itself could have delayed development of these promising candidates.