Deal Watch: Castle Creek Likes Partner Fibrocell Enough To Buy It

Dermatology-focused regenerative medicine firm Fibrocell has been reviewing strategic opportunities for more than a year; April’s FCX-007 license deal with Castle Creek results in buyout.

Scrip regularly covers business development and deal-making in the biopharmaceutical industry. Deal Watch is supported by deal intelligence from Strategic Transactions.

Fibrocell Finds New Life In RDEB Therapy Partner Castle Creek

About 18 months after revealing that it was cash-poor and reviewing all strategic possibilities and five months after partnering its lead candidate with Castle Creek Pharmaceuticals LLC, Fibrocell Science Inc.’s board accepted an offer on 12 September to be bought out by Castle Creek’s parent company for $63.3m.

The two companies already are partnered under a 15 April transaction in which Castle Creek licensed US development and commercial rights to FCX-007 – a genetically modified autologous fibroblast therapeutic for recessive dystrophic epidermolysis bullosa (RDEB). [See Deal] Castle Creek paid $7.5m up front for those rights and agreed to cover up to $20m in development costs (with further costs to be split 70/30 with Castle Creek responsible for the larger portion), up to $157.5m in development and commercial milestones and 30% net sales royalties.

Fibrocell CEO John Maslowski said in a statement that Castle Creek offers the expertise and resources necessary to advance RCX-007 and his firm’s second clinical candidate, Phase I/II gene therapy FCX-013 for moderate-to-severe localized scleroderma. In April 2018, Fibrocell reported that it had cash reserves of $12.2m at the close of first quarter 2018, necessitating the strategic review for how best to continue its expensive and difficult-to-develop pipeline. (Also see "Struggling Fibrocell To Consider All Strategic Directions Going Forward" - Scrip, 18 Apr, 2018.)

Castle Creek CEO Greg Wujek said that working together on FCX-007, which recently moved into Phase III, made clear that greater synergies could be realized by combining the two companies. Both companies’ boards have agreed to the transaction, expected to close in the fourth quarter. Fibrocell will continue to operate as an independent company until closing, with its staff to be retained as Castle Creek employees post-closing.

FCX-007 is slated for a biologics licensing application (BLA) filing in 2021 – it has orphan drug, Rare Pediatric Disease and Regenerative Medicine Advanced Therapy designation from the US Food and Drug Administration. FCX013 also holds orphan and Rare Pediatric Disease status in the US.

Boehringer Licenses Stalled Cancer Drug To Oncoheroes

Volasertib, a Polo-like kinase 1 (PLK1) inhibitor that stalled in development for leukemia at Boehringer Ingelheim GmbH, will get a new lease on life under a licensing deal unveiled on 16 September with Oncoheroes Biosciences Inc. The Boston-based, privately held firm acquired exclusive global rights to research, develop, sell and sublicense the compound at undisclosed terms.

Oncoheroes’ intent is to develop volasertib for pediatric cancer indications – in independent academic studies, the molecule showed potential utility in rhabdomyosarcoma and other pediatric cancer types, the company noted. Boehringer revealed positive Phase II findings for volasertib in acute myeloid leukemia in 2014, but later suspended development after disappointing Phase III data. (Also see "Boehringer's volasertib improves AML survival in Phase II" - Scrip, 9 Jul, 2014.)

Hanmi Partners With Phanes On Bispecific/Multispecific Antibodies

Hanmi Pharmaceutical Co. Ltd. said on Sept. 17 that it has partnered with San Diego-based Phanes Therapeutics Inc. to co-develop bispecific and multispecific antibodies based immune-oncology drugs for global markets.

Under the agreement, Hanmi will bring in new antibodies developed by Phanes to expand its new drug programs using the Pentambody platform technology. Pentambody (penta amino acid mutated bispecific antibody) is a next-generation, bispecific antibody platform technology developed by Beijing Hanmi Pharmaceutical Co., a subsidiary of the South Korean pharma.

This platform allows the antibody to simultaneously bind two different targets for both immuno-oncology therapy and targeted therapy. It possesses natural IgG-like antibody structure, therefore demonstrating good stability and other important natural IgG-like biophysical properties. Multiple bispecific antibodies using Pentambody are being developed by Hanmi.

Through the latest contract, Hanmi plans to progress new bispecific/multispecific antibody immuno-oncology projects, applying the US biotech’s antibody sequence to its Pentambody platform technology. Hanmi will handle research, development, manufacturing and commercialization of the new bispecific/multispecific antibodies, using Phanes’ antibodies. Hanmi will also have the global exclusive rights in all cancer-related indications. The two will share profits after commercialization, but details, including financial terms, of the deal weren’t disclosed.

Established in 2016, Phanes focuses on development of immuno-oncology drugs. It is advancing various monoclonal antibody candidates in oncology and eye disease areas.

Flexion Licenses Xenon's XEN402 For Post-Op Pain

Flexion Therapeutics Inc. gained exclusive worldwide development and commercialization rights on 9 September to Xenon Pharmaceuticals Inc.’s XEN402, a NaV1.7 sodium-channel inhibitor for the non-opioid management of post-operative pain. The license includes associated patents and related non-clinical, clinical and manufacturing assets.

Xenon gets $3m up front; up to $9m in manufacturing, development and regulatory milestones (through the initiation of a Phase II proof-of-concept trial); up to $40.75m in development and regulatory milestones (following Phase II PoC); up to $75m in commercialization milestones; plus future sales royalties ranging from the mid-single to low double-digits. Flexion will also assume Xenon’s remaining obligation under a 2012 agreement (since terminated) to pay a low single-digit percentage sales royalty to Teva Pharmaceutical Industries Ltd. [See Deal]

XEN402 previously was tested in multiple human clinical trials, which demonstrated good efficacy when delivered to the target site at high concentration. The candidate reached Phase II trials before it was suspended after failing to meet primary and secondary endpoints in osteoarthritis (OA), post-herpetic neuralgia and neuropathic pain indications.

Flexion plans to conduct a preclinical program called FX301, in which it will formulate XEN402 as an extended-release hydrogel. The company’s thermosensitive formulation technology aims to transition the drug compound from a liquid to a gel within minutes after injection to provide local delivery near target nerves for up to a week. Initially focusing its administration as a peripheral nerve block to control post-operative pain, FX301 is expected to enable ambulation and early rehabilitation following musculoskeletal surgery, unlike local anesthetics that may inhibit motor function. Flexion anticipates initiating clinical trials for FX301 in 2021.

Flexion's Zilretta (triamcinolone acetonide) is its injectable extended-release corticosteroid suspension to manage OA knee pain that was launched in 2017. (Also see "Flexion's Zilretta Poised For Market Of Diabetics With Knee Pain" - Scrip, 9 Oct, 2017.) It’s also developing FX201 – a preclinical interleukin-1 receptor antagonist in-licensed from GeneQuine Biotherapeutics GmbH – for OA pain; the locally administered gene therapy is expected to enter first-in-human clinical trials sometime this year. [See Deal]

Grunenthal Gets License To Mesoblast Cell Therapy

Grunenthal GmbH licensed exclusive European and Latin American development and commercialization rights on 9 September to Mesoblast Ltd.'s MPC06ID (rexlemestrocel-L), an injectable cell therapy for chronic low back pain (CLBP) due to degenerative disc disease. The companies will collaborate on the design of European confirmatory Phase III trial of the cell therapy.

Mesoblast will get $15m up front, up to $1bn in total milestones (including $135m in pre-commercialization milestones, with $20m due upon approval to begin the confirmatory Phase III trial in Europe and $10m for certain clinical and manufacturing outcomes), plus tiered double-digit sales royalties.

MPC06ID uses allogenic mesenchymal precursor cells (MPCs), which secrete multiple factors that stimulate new proteoglycan and collagen synthesis by chondrocytes. MPCs have also been shown to produce anti-inflammation factors. (Also see "Mesoblast’s Late-Stage Pipeline Could Be Game Changing: Are Investors Paying Attention?" - In Vivo, 18 Apr, 2018.) In a US Phase II trial (completed in 2013), MPC06ID demonstrated that a single intra-discal injection resulted in significant improvements in CLBP intensity, functionality and disc stability for at least three years. The candidate’s ongoing Phase III trial is expected to yield top-line results in 2020.

The deal advances the approval pathway for one of Mesoblast's lead candidates by a European partner with a known expertise in the pain-management field and a focus on the underlying pathophysiology of the disease rather than just addressing the symptoms. Grunenthal currently sells multiple pain medications – including Nucynta ER (tapentadol) for CLBP, cancer pain and diabetic peripheral neuropathy – and has five NCE projects in Phase II or III as well as multiple pain programs in early development.

Alexion Gets Japanese Rights To Eidos ATTR Candidate

BridgeBio Pharma Inc. portfolio company Eidos Therapeutics Inc. announced on 9 September that it out-licensed Japanese development and commercialization rights to transthyretin amyloidosis (ATTR) candidate AG10 to Alexion Pharmaceuticals Inc. for $25m in upfront cash plus an additional $25m equity investment. An oral small molecule designed to stabilize tetrameric transthyretin, AG10 currently is in Phase III studies in the US and EU for ATTR cardiomyopathy. (Also see "Start-Up Eidos Surfs Crest Of TTR Amyloidosis Wave" - Scrip, 27 Aug, 2018.)

Eidos also is planning to begin a Phase III study of the drug in ATTR polyneuropathy. It can realize milestone and royalty payments from Alexion related to the Japanese rights. Parent BridgeBio said in August that it hopes to reacquire the roughly one-third of Eidos it no longer owns since Eidos went public. (Also see "After IPO, BridgeBio Looks To Tuck Eidos Back Into Its Flock" - Scrip, 12 Aug, 2019.)

Anokion Acquires Its Own Spinout, Kanyos

Four years after spinning out the company, Anokion SA has now acquired Kanyos Bio Inc. Financial terms were not disclosed. Kanyos was formed in 2015 and tasked with developing celiac disease and Type I diabetes candidates arising from a partnership between Anokion and Astellas Pharma Inc. [See Deal] (Astellas had an option to buy Kanyos under terms of that deal.)

Through the acquisition announced on 11 September, Anokion gains KAN101, an antigen-specific celiac disease therapy for which an IND filing is expected by the end of 2019. The project will be developed alongside Anokion’s ANK780, also an antigen-specific treatment that is in preclinical studies for multiple sclerosis. Concurrent with the Kanyos buy, Anokion announced a $40m Series B round. [See Deal]

Atomwise, Hansoh Collaborate On Small Molecule Discovery

AI-focused drug discovery start-up Atomwise Inc. and Chinese biotech Jiangsu Hansoh Pharmaceutical Group Co. Ltd. (Hansoh) agreed on 11 September to collaborate on the design and discovery of potential drug candidates for up to 11 undisclosed target proteins across numerous therapeutic areas, including oncology.

Researchers from both companies will partner their respective capabilities with an aim to improve the chances for success and decrease discovery and development timelines. Atomwise will perform direct hit discovery, hit-to-lead selection and lead optimization. Hansoh contributes its biological assay and medicinal chemistry expertise and will be responsible for leading preclinical and clinical development activities for potential compounds to which it receives worldwide development and commercialization rights in all fields.

Atomwise will receive undisclosed technology access and option-exercise payments, royalties and potential fees from future sublicensing or sale of assets. The total potential value of the deal if all projects succeed is expected to reach the blockbuster level, according to the companies.

Atomwise’s AtomNet structure-based drug-design platform, based on deep convolutional neural networks, can analyze a chemical space of billions of compounds to identify a small subset with high specificity. The technology's statistical approach extracts insights from millions of experimental affinity measurements and thousands of protein structures to predict the binding of small molecules to proteins. Although no specific therapy areas other than cancer were disclosed, Hansoh’s areas of focus include oncology, anti-infectives, diabetes and central nervous system, cardiovascular and gastrointestinal disorders.

Wize Gets Ophthalmic IP From Copernicus

Copernicus Therapeutics Inc. licensed Wize Pharma Inc. exclusive global rights on 9 September to develop, manufacture and commercialize non-viral gene therapies for choroideremia (CHM) based on Copernicus’ technology. Wize also has the right to sublicense.

Wize will pay an undisclosed upfront fee, development milestones (in cash or stock) and high-single or low-double-digit sales royalties. Wize will also pay Copernicus fees to fund and execute the development plan leading to the completion of the Phase I/II clinical trial.

Copernicus' technology enables the development of effective non-viral gene therapies for ophthalmic indications without toxicity. CHM is a rare, degenerative, inherited retinal disorder that mostly affects males and leads to blindness. There are no FDA-approved treatments for the condition.

Based on the Copernicus IP, Wize is developing WP-REP1, consisting of a DNA-compacted nanoparticle (NP) that is administered via intraocular injection. The therapy is designed to provide a functioning CHM gene to photoreceptors and retinal pigment epithelial (RPE) cells. The candidate has demonstrated proof-of-concept in preclinical studies.

The companies may choose to expand the collaboration to other ophthalmic indications based on the Copernicus technology.

Stay tuned for the next issue of Deal Watch. You can read more about other deals that have been covered in depth by Scrip and Generics Bulletin in recent days below:

(Also see "Amplyx Cleared To Complete Phase II Study Of New Antifungal Class" - Scrip, 16 Sep, 2019.)	Amplyx Pharmaceuticals Inc. has licensed the Phase II-ready monoclonal antibody MAU868 from Novartis AG at undisclosed terms. Amplyx intends to study its ability to inhibit reactivation of the BK virus (BKV), which lies dormant in about 80%-90% of the general population.
(Also see "Lundbeck CEO: Alder Buy Will Boost Pipeline" - Scrip, 16 Sep, 2019.)	Deborah Dunsire tells Scrip that buying Alder BioPharmaceuticals Inc. offers Lundbeck Inc. a blockbuster prevention treatment for severe migraine patients, and helps rebuild Danish group’s prospects.
(Also see "Strides Grows In Central Europe Through Fairmed Deal" - Generics Bulletin, 12 Sep, 2019.)	Strides Pharma Inc. has acquired a majority stake in Swiss generics firm Fairmed Healthcare in a move to bolster its presence in central Europe. The acquisition marks the latest in a string of transactions by the Indian firm.
(Also see "PE Interest In Hisun's Biosimilars Arm As Hong Kong Firm Acquires $540m Majority Stake" - Scrip, 12 Sep, 2019.)	Asia-focused PE firm PAG has purchased a majority stake in Hisun BioRay Biopharmaceutical Co. Ltd., the biotech division of Chinese state-owned generic company Zhejiang Hisun Pharmaceutical Co. Ltd., for $540m, boosting its presence in a nascent, fast-growing segment of the country’s drug industry.
(Also see "GSK Buys One Of Eight Firms Formed In VC Partnership With Avalon " - Scrip, 11 Sep, 2019.)	Celiac disease specialist Sitari Pharmaceuticals was the first company formed under the six-year collaboration. Three were shut down and Avalon controls the other four, which aren't compatible with GlaxoSmithKline PLC’s new R&D focus.
(Also see "With $260m Settlement From Sanofi, Lexicon Looks For New Zynquista Partner" - Scrip, 11 Sep, 2019.)	Sanofi terminated its alliance for the SGLT1/2 inhibitor Zynquista, giving Lexicon Pharmaceuticals Inc. full control of development in type 1 and type 2 diabetes, but it is seeking a new partner ideally with a European footprint.
(Also see "AstraZeneca’s Outlicensing Tactics Make It Top Dealmaker" - Scrip, 10 Sep, 2019.)	Datamonitor report highlights big pharma’s licensing trends from last five years, and finds UK firm top on numbers of deals, but Merck & Co. Inc. put up most money.
(Also see "Will 'Vant' Deal Really Fulfill Dainippon's Needs? " - Scrip, 9 Sep, 2019.)	Sumitomo Dainippon Pharma Co. Ltd.'s planned $3bn deal with Roivant Sciences Inc. goes some way to fulfilling the Japanese firm’s strategic needs, but investors appear cool and questions remain.