The deal Symphogen announced today with Merck Serono signals the second significant pay cheque that the private Danish biotech has earned thanks to its lead clinical project, Sym004, and it believes that this one should see it through until 2016, beyond clinical proof of concept.
The €20m in cash that Merck KGaA’s unit has paid for global rights to the programme puts the tie-up among the most lucrative private European biotech licensing transactions, although accurate comparisons are impossible because terms of most private company deals are not disclosed. With a €505m ($636m) biodollar value, a takeover of Symphogen by Merck now seems to be the deal’s logical longer-term outcome should development of Sym004 pan out.
In 2011 Symphogen raised €100m – by far the largest amount of capital committed to a private biotech company that year. The second of two tranches of this fund-raising was triggered after Sym004 met certain undisclosed clinical milestones (EP Vantage Interview - Symphogen awaits proof of concept as funding secured, January 26, 2011).
Merck has acquired global development and commericalisation rights to Sym004. It will immediately take over the running of two ongoing open-label phase II studies – one in 61 metastatic colorectal cancer patients who have progressed after chemotherapy and anti-EGFR treatment, and the other in 25 patients who have failed anti-EGFR therapy for squamous cell carcinoma of the head and neck.
In addition to the €20m upfront fee, Merck stands to pay Symphogen milestones of €225m for development and €250m on meeting specified sales targets, plus an undisclosed royalty. Neither Merck nor Symphogen would say whether any of the milestones are likely to be triggered within the coming 12 months, and Merck would not comment on the extent of the data it had seen before signing the deal.
Sym004 is an example of Symphogen’s recombinant polyclonal antibody approach, and comprises two separate antibodies that bind to different, non-overlapping epitopes on the EGF receptor. This prompts aggregation of the receptors on the cell surface followed by internalisation, hopefully interrupting the EGFR signalling that is involved in the growth and proliferation of tumours.
Clinicaltrials.gov lists the two ongoing studies as being due for completion over the next six months or so. Although the colorectal study is designed only as a dose-escalation trial to investigate safety and tolerability, Symphogen believes that a positive effect on biomarkers, such as eradication of EGFR, would be a promising efficacy signal. Signs of an actual clinical benefit, such as tumour shrinkage or a survival trend, would represent an unexpected knockout result.
For Merck the deal signals an expansion of focus beyond the scope of traditional antibody approaches; the German company has an existing alliance covering bispecific antibodies, which can concurrently bind two separate targets on an antigen, with F-star, and three nanobody deals with Ablynx.
Analysts at Bryan, Garnier & Co said licensing in Syn004 reinforced the German company’s Erbitux franchise, following on from a deal struck with Dr Reddy’s Laboratories in June to co-develop a portfolio of biosimilar oncology compounds, primarily focusing on monoclonal antibodies.
Symphogen has early-stage deals covering infectious diseases with Roche and Meiji Seika Kaisha, while its other clinical-stage project, the anti-Rhesus D polyclonal rozrolimupab, was handed back by Swedish Orphan Biovitrum after a phase II study in immune thrombocytic purpura. Since the Danish company was founded in 2000 it has raised €208m in six financing rounds involving investors such as Novo A/S, Essex Woodlands Health Ventures and the Danish Pension Fund.
Although neither partner would disclose whether a takeover of Symphogen by Merck was a topic of discussion in negotiating the deal, this must surely be something that Merck would pitch should Sym004 progress through development and look likely to trigger much of the future €475m milestones plus royalties.
This would be a payday that some of Symphogen’s venture capital backers have been awaiting for over a decade.
|3rd-line metastatic colorectal cancer||Phase I/II||NCT01117428|
|Squamous head and neck cancer, failed anti-EGFR||Phase II||NCT01417936|
To contact the writer of this story email Jacob Plieth in London at email@example.com