Deal Watch: Merck KGAA, Pfizer, eFFECTOR Agree To PD-L1/MNK Combo Study In CRC

Recently approved Bavencio will be paired with experimental MNK1/2 inhibitor in microsatellite-stable colorectal cancer. CRO Parexel to go private, AbbVie teams with Principia in immunology R&D and more.

Scrip regularly covers business development and deal-making in the biopharmaceutical industry. Below is a roundup of some of the most noteworthy recent transactions. Deal Watch is supported by deal intelligence from Strategic Transactions.

Combo Trial To Test Avelumab With MNK1/2 Inhibitor For Microsatellite-Stable CRC

Pfizer Inc., Merck KGAA and eFFECTOR Therapeutics Inc. entered into a trial collaboration agreement on June 20 to study a combination of German Merck and Pfizer’s avelumab with eFFECTOR’s eFT508 as a potential treatment for microsatellite-stable colorectal cancer. [See Deal]

Avelumab, a PD-L1 inhibitor, was recently approved as Bavencio for metastatic bladder cancer and metastatic Merkel cell carcinoma. (Also see "Pfizer's Avelumab Makes Its Debut, In Rare Form Of Skin Cancer" - Scrip, 23 Mar, 2017.) The cancer immunotherapy is also in Phase III trials for non-small cell lung, stomach, esophageal, ovarian, renal and head and neck cancers, as well as squamous cell carcinoma and diffuse large B-cell lymphoma, and Phase I and II studies are ongoing for melanoma, breast, colorectal, prostate and blood cancers. Merck and Pfizer have been developing avelumab under a 2014 collaboration. [See Deal]

EFT508, an MNK1/2 inhibitor, is in Phase I trials for solid tumors and lymphoma; according to the partners, the candidate offers strong potential when used in combination with checkpoint inhibitors like avelumab. The Phase II combo trial will begin later this year and be conducted by eFFECTOR; the partners will each share costs and supply candidates for the study.

Pamplona Capital Acquires CRO Parexel In Take-Private Deal

Private equity group Pamplona Capital Management agreed to acquire all of the outstanding shares of contract research organization Parexel International Corp. for $88.10 per share (a 6.6% premium) in an all-cash, take-private transaction. [See Deal] The deal announced June 20 is valued at nearly $5bn including assumed net debt.

Prior to announcing the transaction, Parexel evaluated numerous other options with the help of an independent financial advisor. Parexel expects to close the deal in the fourth quarter of 2017 after receiving approval from the majority of its shareholders. In a June 20 note, Morningstar analyst Kelsey Tsai predicted Parexel shareholders will be pleased with the return.

"While we believe the fundamentals of the global late-stage development CRO industry are strong, … we think Parexel’s top-line growth and margins have been relatively lackluster relative to its peers," Tsai wrote. "Management has tried to point to slower backlog conversion and the growing complexity and costs of trials, but Parexel has been disproportionately affected. We believe the acquisition gives investors a lucky break."

After closing, Parexel will be a private company and its shares no longer will be listed on any public market. The company originally was taken public way back in 1995 and provides a broad range of clinical research, consulting, medical communication and tech services to pharma, biotech and medical device companies worldwide.

AbbVie, Principia Ally In Immunology Drug Development

AbbVie Inc. and Principia BioPharma Inc. announced June 13 that they are teaming up to develop oral immunoproteasome inhibitors for immunology indications. [See Deal] Both firms will conduct research activities and preclinical studies, after which AbbVie will take over clinical development and commercialization.

Principia uses its Tailored Covalency technology to discover reversible covalent inhibitors that provide the specificity of an antibody but as oral, long-lasting small molecules. The firm chose to partner with AbbVie because of the pharma's expertise in the immunology space.

Teva, AbCellera Collaborate Again On Monoclonal Antibodies

In the second collaboration between AbCellera Biologics Inc. and Teva Pharmaceutical Industries Ltd., AbCellera agreed June 13 to once again apply its proprietary monoclonal antibody (mAb) screening platform to discover antibodies that modulate the function of an undisclosed membrane protein chosen by Teva. [See Deal] Teva will pay AbCellera an upfront payment and money for research support, along with milestones and royalties based on Teva's development and commercialization of the antibodies.

AbCellera's technology enables the discovery of rare antibodies with defined specificity and functional activity against difficult membrane protein targets. The two companies inked their original collaboration back in February 2016, which has since been concluded. [See Deal]

Pulmatrix Licenses Phase I Kinase Inhibitors From RespiVert

Janssen Pharmaceutical Cos.'s RespiVert Ltd. subsidiary licensed Pulmatrix Inc. exclusive global rights on June 13 to develop and commercialize kinase inhibitors for respiratory and oncology indications. [See Deal]

The licensed compounds are currently in Phase I trials. Pulmatrix plans to develop them using its iSPERSE (inhaled Small Particles Easily ReSpirable and Emitted) dry-powder technology, which enables pulmonary delivery of drugs with high efficiency, dose reproducibility and flow-rate independence. The company believes the licensed compounds will offer a new treatment option for lung inflammation in diseases including chronic obstructive pulmonary disease, asthma and idiopathic pulmonary fibrosis.

Medac Licenses Acerus' Natesto In 15 European Countries

Acerus Pharmaceuticals Corp. granted medac GMBH exclusive rights June 15 to its Natesto (testosterone) nasal gel in 15 European countries, including Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Italy, the Netherlands, Norway, Poland, Slovakia, Spain, Sweden and the UK. [See Deal]

Acerus gets up to €11.5m ($12.9m) in upfront and milestones payments, the latter of which are contingent upon medac's receiving marketing approval for Natesto in certain countries and the achievement of specified sales goals. Acerus will hold onto manufacturing rights, and receives an additional payment for supplying medac with Natesto.

Already approved in the US, in 2014, and sold by Aytu BioScience Inc., and Canada in 2016, Natesto is an androgen replacement therapy, administered as a twice-daily topical nasal gel dispensed via a metered-dose pump, for adult males suffering from hypogonadism (a deficiency or absence of endogenous testosterone). [See Deal]Hyundai Pharm Co. Ltd., which holds a license to Natesto in South Korea, filed for marketing approval there in April. Earlier this month, Acerus granted Therios Healthcare rights in Saudi Arabia, the United Arab Emirates and Egypt. The current deal further strengthens Acerus' efforts to partner Natesto globally. [See Deal]

Medac already has a portfolio of therapeutics for urological diseases, including cystitis, erectile dysfunction, incontinence, and bladder and prostate cancers, but (if approved) Natesto will be its first product for hypogonadism.

Lee's Gets Asian Rights To Windtree's KL4 Surfactant Products

Windtree Therapeutics Inc. licensed Lee's Pharmaceutical Holdings Ltd. exclusive rights (including sublicensing rights) June 12 to develop and commercialize its KL4 surfactant products for respiratory distress syndrome (RDS) in China, Hong Kong, Thailand, Taiwan and 12 other Asian territories. [See Deal]

Included in the agreement are Surfaxin (lucinactant)and Surfaxin LS (lyophilized dosage form) for RDS in premature infants, and the Phase IIb Aerosurf (inhaled lucinactant) combination drug/device product for noninvasive delivery of aerosolized KL4 surfactant. Lee's also obtained rights to register and manufacture both Surfaxin products in the licensed territories, as well as options to add Japan to the agreement and manufacture Aerosurf.

Windtree received $1m up front and can earn up to $37.5m in clinical, regulatory and commercial milestones, and sales royalties in the high-single-digit to mid-teens (Strategic Transactions assumes 7%-16%). Lee’s will conduct and pay for development, regulatory and commercial activities, including the planned Phase III trial of Aerosurf. Both parties will establish a joint steering committee to oversee all activities under the agreement.

Windtree's products incorporate its KL4 technology, which produces a synthetic surfactant similar to human pulmonary surfactant and contains a synthetic peptide, KL4 (sinapultide), to mimic the human surfactant protein B that's critical for the proper functioning of the respiratory system.

Roivant Launches Urovant, Gets Rights To Merck's Phase III Vibegron

Roivant Sciences GMBH launched Urovant Sciences on June 6, which has licensed a late-stage overactive bladder candidate from Merck & Co. Inc. as its first project. [See Deal]

Urovant gets global rights (excluding Japan, where Kyorin Pharmaceutical Co. Ltd. has rights, and some Asian territories) to Merck’s vibegron, an oral beta-3-adenergic agonist for overactive bladder with urge incontinence, urgency and urinary frequency. Merck completed a Phase III trial outside of the US that met primary and secondary endpoints; Urovant plans to initiate its own multinational Phase III study during 2017.

Vivek Ramaswamy founded Roivant in 2014, and has since created five biotechs, which operate as wholly- or majority-owned subsidiaries, two of which have completed huge IPOs. [See Deal][See Deal] They include Urovant; women’s health-focused Myovant Sciences Ltd. ($202mm IPO in October 2016); Axovant Sciences Ltd. (CNS; $337mm IPO in June 2015); Dermavant Sciences Ltd. (dermatology); and Enzyvant Sciences GMBH (rare diseases). (Also see "Myovant On Path To Women’s Health Leadership, CEO Says" - Scrip, 16 Feb, 2017.)

You can read more about deals that have been covered in depth in Scrip in recent days below:

(Also see "SK Acquires BMS Irish Plant To Support Global CMO Leadership Ambitions" - Scrip, 21 Jun, 2017.)	SK Biopharmaceuticals Co. Ltd. 's acquisition of Bristol-Myers Squibb Co. 's small-molecule API manufacturing plant in Ireland underlines South Korean conglomerate SK Group’s stepped up efforts to grow its biotech and pharma business. The move is in line with SK Biotek's plan to sharply raise revenue and corporate value in the coming years, and the CMO is also considering additional acquisitions or collaborations.
(Also see "Glenmark Shapes Immuno-Oncology Play With Early-Stage APC Asset" - Scrip, 21 Jun, 2017.)	Glenmark Pharmaceuticals Ltd. has in-licensed a small-molecule oncology compound from APC Therapeutics Inc., expanding its interests in the promising immuno-oncology space. One of the founders of APC has even joined the Indian firm.
(Also see "Is BMS The Must Have Immuno-Oncology Accessory Of The Season?" - Scrip, 19 Jun, 2017.)	Bristol-Myers Squibb is in the M&A hot seat, and Pfizer could be the one applying fire.
(Also see "Chinese Investor Consortium Buys SciClone But Relisting Possible" - Scrip, 15 Jun, 2017.)	Against a background of positive changes to regulations and policies on pharmaceutical marketing in China, US-based SciClone Pharmaceuticals Inc. has accepted a buyout offer from a consortium of Chinese investors, but may relist in China in the future.
(Also see "Basilea's Business Strategy Emboldened By $500m Pfizer Deal" - Scrip, 15 Jun, 2017.)	Swiss company Basilea Pharmaceutica Ltd. has attracted Pfizer as a European partner for its antifungal Cresimba and plans to strengthen its development pipeline with licensed-in products and further collaborations.