Deal Watch: Conatus Ends NASH Ambitions, Merges With Regenerative Medicine Firm Histogen

Reverse merger takes Histogen public as it seeks mid-stage data for male pattern baldness by end of 2020. AstraZeneca continues divestiture spree, sending five mature hypertension drugs to Atnahs.

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

Histogen’s Regenerative Medicine Platform Joined With Conatus Cash

Conatus Pharmaceuticals Inc. is winding down operations as a non-alcoholic steatohepatitis (NASH) company as it announced on 29 January that it will merge with privately held Histogen Inc. and focus going forward on that company’s regenerative medicine candidates for male pattern baldness, articular cartilage defects and two dermatology indications. The new company will retain the Histogen name, be led by Histogen’s management team and take over Conatus’ Nasdaq listing.

Last June, Conatus revealed that its pan-caspase inhibitor emricasan had failed a Phase IIb study in NASH patients with decompensated cirrhosis – that study had been viewed as the last gasp for an embattled drug candidate that had been partnered with Novartis AG since 2016. (Also see "Conatus Accepts Defeat For Emricasan In NASH" - Scrip, 25 Jun, 2019.) At the same time, Conatus announced a 40% staff cut and that it would review its strategic options; it also shut down its other pipeline program, a preclinical caspase inhibitor for inflammasome disease.

Histogen’s pipeline results from a single patented manufacturing process that it says can yield biological therapeutic candidates from a single bioreactor. During an investor call on 29 January, Histogen CEO Richard Pascoe said this platform is based on a discovery that growing fibroblast cells under simulated embryonic conditions can induce those fibroblasts to become multipotent stem cells. This in turn theoretically can yield therapeutics that can stimulate a patient’s own stem cells to activate and regenerate tissue without the use of embryonic stem cells.

Leading Histogen’s pipeline is HST 001, slated to enter a Phase Ib/IIa study in male pattern baldness during the second quarter and report out data in the fourth quarter. The San Diego-based firm expects to report Phase I data for HST 002 in the treatment of nasolabial folds during the third quarter of 2020. It also intends to initiate Phase I studies of HST 002 as a dermal filler during the second quarter and of HST 003 as a treatment for knee cartilage damage in the third quarter.

The deal, expected to close during the second quarter and unanimously approved by both companies’ boards, values Histogen at $100m and Conatus at $35.1m. It will result in Histogen shareholders owning 74% of the new company and Conatus shareholders having a 26% stake. Conatus CEO Steven Mento and a second representative from Conatus will stay on as a member of the new company’s eight-member board.

Mento told the investor call that the combined company’s cash should be sufficient to fund operations into early 2021. Conatus reported cash on hand of $22.7m as of 30 September 2019 and projected ending the year with between $10m and $15m in cash. Histogen says it has raised $38m in equity funding since its inception in 2008, including a $10m series A round that closed in 2010. [See Deal]

AstraZeneca Divests Mature Hypertension Drugs To Atnahs

AstraZeneca PLC said on 27 January that it is selling five mature hypertension products to UK-based Atnahs Pharma in exchange for $350m up front and as much as $40m in payments contingent on sales of the products between 2020 and 2022. The transaction continues a recent trend by AstraZeneca of offloading mature brands and non-core pipeline assets, including last year’s sales of Seroquel and Losec to Cheplapharm Arzneimittel GmbH. (Also see "Deal Watch: AstraZeneca Continues Divestments By Offloading US/Canada Seroquel Rights" - Scrip, 6 Dec, 2019.)

The deal with Antahs, a multinational firm that acquires, develops and markets mature pharmaceuticals globally, excludes rights to the five products in the US and India, which were previously sold off by AstraZeneca, and in Japan, which will be retained by AstraZeneca. Antahs gets rest-of-world rights to Inderal (propranolol), Tenormin (atenolol), Tenoretic (atenolol, chlorthalidone fixed-dose combination), Zestril (lisinopril) and Zestoretic (lisinopril, hydrochlorothiazide fixed-dose combination). The products yielded aggregate sales revenue of $132m in 2018 in the markets covered by the transaction.

Ritter Reverse-Merges With Qualigen In Stock Transaction

Gut microbiome-focused Ritter Pharmaceuticals Inc. was another US biotech recently calling it a day, reverse merging with privately held Qualigen Inc. on 21 January. The deal leaves Ritter shareholders with a 7.5% interest in the resulting entity, with Qualigen owning the remaining 92.5%. But the deal includes a contingent value right (CVR) promising Ritter investors some of the proceeds should the new company be able to monetize the stalled lactose intolerance candidate RP-G28 through some sort of deal. (Also see "Ritter: RP-G28 has could become first FDA-approved lactose intolerance drug " - Scrip, 17 Feb, 2012.)

In addition to its FDA-approved FastPack System diagnostic, Qualigen’s business also includes a pipeline of three therapeutic candidates: ALAN (AS1411-GNP), a DNA-coated gold nanoparticle candidate it says offers the potential to target virtually any cancer type with minimal side effects; RAS-F3, a small molecule RAS oncogene protein-protein inhibitor for blocking RAS mutations that could have application in pancreatic, colorectal and lung cancer; and STARS, a DNA/RNA-based treatment device to remove circulating blood in tumors and viral pathogens.

Orphan Dermatology Biotech Timber Goes Public In Merger With BioPharmX

The recent string of reverse mergers also includes privately held Timber Pharmaceuticals LLC’s plans to go public by merging with San Jose-based BioPharmX Corp., the firms announced 28 January. Expected to close during the second quarter, the deal is contingent on Timber raising $20m in equity financing for the new company – it along with those investors would then hold an 88.5% interest in the new company, with BioPharmX shareholders owning 11.5%.

Going forward, the new company would focus on Timber’s Phase IIb TMB-001, a topical formulation of isotretinoin being studied in moderate-to-severe subtypes of congenital ichthyosis; Phase IIb TMB-002, a topical formulation of rapamycin being tested as a treatment for facial angiofibromas (FAs) in tuberous sclerosis complex (TSC); and TMB-003, a preclinical selective endothelin A receptor antagonist being developed for localized scleroderma.

The firm will also seek a non-dilutive partnership or divestment of BioPharmX’s lead program, a Phase III-ready proprietary topical minocycline gel.

Helsinn Licenses Cancer Care Products Rights To Berlin-Chemie

Swiss cancer care specialist Helsinn Group out-licensed commercial rights in Russia and the Commonwealth of Independent States (CIS) region for two products on 27 January to Berlin-Chemie Menarini AG, a German affiliate of Menarini Group. The deal gives Berlin-Chemie rights to Akynzeo (netupitant 300mg/palonosetron 0.5mg), a combination oral anti-emetic for acute and delayed chemotherapy-induced nausea and vomiting, and Onicit (palonosetron), an injectable preventive agent for CINV.

Akynzeo was approved in the EU in 2015 and is now approved and slated to be launched in Russia this year. Onicit will be re-launched in Russia simultaneously, the companies said. Financial terms were not disclosed but Berlin-Chemie gets rights to promote, distribute and commercialize the products in its territories, while Helsinn retains all international development rights to the products.

ATAI Forms JV With DemeRx Focused On Opioid Use Disorder

Berlin-based ATAI Life Sciences AG announced a pair of joint ventures with US-based DemeRx on 24 January to develop a pair of neurotransmitter-targeted therapies for opioid use disorder. No financial terms were disclosed.

The JVs will focus on the development of DemeRx’s ibogaine and noribogaine for opioid use disorder. Ibogaine is a natural indole alkaloid that has been marketed in France as a stimulant and antidepressant under the brand name Lambarene. A study performed in the West Indies indicated the drug’s ability to reduce opioid-withdrawal scores within 36 hours of treatment, the companies said. Noribogaine is a metabolite of ibogaine that the companies think may offer potential separately as an opioid use disorder follow-up or maintenance treatment.

Ocuphire Gets Rights To Apexian Candidate For Ophthalmic Indications

Apexian Pharmaceuticals Inc. granted [Ocuphire Pharma Inc.] an exclusive global sublicense on 22 January to APX3330 for all ophthalmic and diabetic indications. APX3330 is an oral apurinic/apyrimidinic endonuclease 1/reduction-oxidation effector factor-1 (APE1/Ref-1) inhibitor in preclinical studies for diabetic retinopathy (DR) and diabetic macular edema (DME).

Future indications for the compound may include wet age-related macular degeneration and retinal vascular occlusion. Apexian is also developing APX3330 for cancer.

Based on the positive results of a recently completed Phase I oncology trial (APX-CLN-0011) and 10 other Phase I and Phase II prior trials conducted by Apexian, Ocuphire plans to commence a Phase II proof-of-concept trial (ZETA-1) in non-proliferative DR and DME in 2020.

APX3330 will join Ocuphire’s ophthalmic pipeline, which is led by Nyxol, a Phase IIb eye drop for front-of-the-eye disorders, including night vision disturbances, reversal of mydriasis, presbyopia and normal-tension glaucoma. APX3330 was licensed to Apexian from Eisai Co. Ltd. in 2008 and incorporates IP that Apexian licensed from Indiana University in 2017. [See Deal]

Novartis Grants Iovance License To IL-2 Analog As Potential Cancer Immunotherapy

Iovance Biotherapeutics Inc. gained development and commercialization rights on 12 January to an antibody cytokine engrafted protein from Novartis.

Novartis’ compound, which Iovance will name IOV3001, is an engineered interleukin-2 non-complementarity determining region (CDR) graft, which targets IL-2R beta-gamma-expressing cells and limits regulatory T-cell (Treg) activation. Iovance is developing cancer immunotherapies based on tumor-infiltrating lymphocytes (TILs), which involves immune cells being extracted from a patient’s tumor and then infused back into the patient’s own tumor tissues to attack the cancer.

The biotech will take over GMP manufacturing during 2020 and expects to initiate IND-enabling activities by next year. Iovance paid an upfront payment and is responsible for potential development and regulatory milestones in the low single digits triggered by the initiation of dosing in various development phases and approvals in the US, EU and Japan; as well as low-to-mid-single-digit sales royalties (1%-6%).

The deal will expand the company’s existing TIL pipeline, which includes candidates for metastatic melanoma, cervical, head and neck, non-small cell lung and blood cancers. In a separate concurrent collaboration, Iovance licensed exclusive worldwide rights to Cellectis SA’s TALEN technology to develop gene-edited TILs. (Also see "Deal Watch: Novo Nordisk, Fauna To Explore Hibernation To Treat Obesity" - Scrip, 17 Jan, 2020.)

Stay tuned for the next edition 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 "Sumitovant Keeping Sumitomo Dainippon-Acquired Roivant Companies On Track" - Scrip, 29 Jan, 2020.)	Scrip spoke with [Sumitovant Biopharma Ltd.] CEO Myrtle Potter about short- and long-term goals for the portfolio of five companies, including Myovant Sciences Ltd., Urovant Sciences Ltd. and Enzyvant Sciences Ltd. with potential near-term approvals.
(Also see "Neuraxpharm Targets Austria With Easypharm Deal" - Generics Bulletin, 28 Jan, 2020.)	neuraxpharm Arzneimittel GmbH has opened a unit in Austria after snapping up local consumer health care specialist Easypharm.
(Also see "AZ Gets IBD Drug Back From Allergan " - Scrip, 28 Jan, 2020.)	Allergan PLC is selling its Crohn’s disease and ulcerative colitis drug brazikumab back to AstraZeneca to satisfy regulators ahead of its link-up with AbbVie Inc., essentially giving the asset to the UK major for free.
(Also see "Amgen To Buy Out Japan JV With Astellas" - Scrip, 23 Jan, 2020.)	Full, planned acquisition of Tokyo-based operation will give US biotech giant a firmer foothold in key market and new platform for Otezla growth.