AstraZeneca Strengthens Diabetes R&D With Option On Astellas/Prosidion's Early-Stage Compounds

AstraZeneca has entered into an option agreement on Prosidion's first-in-class GPR119 receptor agonists for diabetes.

AstraZeneca PLC has entered into an option agreement to acquire two investigational diabetes compounds, PSN821 and PSN842, from the U.K. biopharma company, Prosidion Ltd., as that company's parent, the Japanese multinational, Astellas Pharma Inc., continues to find alternative owners for its assets.

The potential boost to AstraZeneca's diabetes portfolio was announced Dec. 21, the same day it announced it was entering into a global collaboration with another company based in Asia, the Chinese company Hutchison MediPharma Ltd., a subsidiary of Chi-Med, to develop Chi-Med's potential new anticancer agent, volitinib (Also see "AstraZeneca Licenses Global Rights To Oncology Compound From China’s Hutchison" - Scrip, 21 Dec, 2011.).

Type 2 diabetes is one of AstraZeneca's research priorities, with the first-in-class SGLT2 inhibitor, dapagliflozin, being developed in a collaboration with Bristol-Myers Squibb Co., and having an FDA user fee date of Jan. 28, 2012 (Also see "Bristol Outperforms In Q3, But Will Dapagliflozin, Apixaban See It Past Plavix?" - Pink Sheet, 27 Oct, 2011.). The two companies have already collaborated on the development of the marketed DPP-4 inhibitor, Onglyza (saxagliptin).

But the two new deals announced Dec. 21 are unlikely to address AstraZeneca's pressing need for late-stage and marketed products, as its best-selling products like Nexium (esomeprazole), and Seroquel (quetiapine) start to face generic competitors, and Crestor (rosuvastatin) battles with newly launched generic versions of Pfizer Inc.'s best-selling statin, Lipitor (atorvastatin).

And the company has had little recent success with its late-stage pipeline. It announced Dec. 20 that it was taking a $380 million impairment charge in the fourth quarter, because of the setbacks in clinical trials with the potential anticancer compound olaparib and the antidepressant TC-5214 (Also see "AstraZeneca Takes Impairment Charge After Olaparib, TC-5214 Setbacks" - Pink Sheet, 20 Dec, 2011.).

The continued failure of key product pipeline programs has led to suggestions that the company take part in larger-scale M&A. "Without R&D catalysts or a compelling and accelerating new product launch (Brilinta's launch continues to be sluggish) to spark investor interest, we believe AstraZeneca's management should at least consider large scale ($10 billion-plus) acquisitions," say analysts at Leerink Swann.

Non-Refundable Option Fee Paid

In the deal with Prosidion, AstraZeneca has paid the U.K .company an undisclosed, non-refundable fee to have an exclusive option on acquiring PSN821 and PSN842. It will decide whether to exercise the option upon successful results from an ongoing Phase IIa clinical trial of PSN821, and the evaluation of preclinical work.

If AstraZeneca decides to acquire the compounds, it will make pre-specified upfront and milestone payments. It will disclose the size of the payments at that time.

PSN821 and PSN842 are orally administered G-protein-coupled receptor GPR119 agonists, and are potentially the first of a new class of diabetes medicines. Astellas is currently conducting a Phase II trial of PSN821 in South Africa, while PSN842 is in preclinical studies. In preclinical models, PSN821 was found to substantially lower blood glucose, reduce food intake and reduce body weight, AstraZeneca said.

Strategic Alternatives Sought For Prosidion

Astellas indicated in January this year that it was looking for strategic alternatives for the diabetes and obesity research conducted by Prosidion, which it acquired when it bought OSI Pharmaceuticals LLC in June 2010 (Also see "Astellas Considers Options To Shed All Or Parts Of Diabetes Unit Prosidion" - Scrip, 11 Jan, 2011.). Prosidion is a wholly owned subsidiary of OSI specializing in metabolic disease R&D.

Since the start of this year, it has sold another diabetes program, involving Prosidion's patent estate and associated royalty stream related to DPP-4 inhibitors, to Royalty Pharma for $609 millon in cash (Also see "Astellas Sells Diabetes Drug Patents To U.S. Investor For $209 Million" - Scrip, 1 Jul, 2011.)

In September 2011 it licensed PSN357, Prosidion's novel first-in-class therapeutic for the treatment of neuropathic pain, to the U.S. company, Aestus Therapeutics Inc. Aestus said it would evaluate the compound, now called ATx09-002, in Phase II clinical trials in patients with post-herpetic neuralgia.

Astellas has been facing a patent cliff of its own, with its best-sellers, the organ transplant drug Prograf (tacrolimus) and the urinary incontinence product Flomax (tamsulosin) facing generic competition. It has terminated a number of product development programs during 2010 and 2011, in order to focus its resources on three therapeutic areas – urology, oncology and immunological/infectious diseases (Also see "Astellas Pipeline Set For Patent Cliff Rebound" - Scrip, 3 Feb, 2011.).

[Editor's note: This article appeared in "The Pink Sheet" DAILY Dec. 21, 2011.]