Drivers of M&A Discussed in New Cutting-Edge Report by MP Advisors

22 Feb 2013 • by Natalie Aster

There could soon be more licensing or M&A deals in the kinase inhibitor area, according to the report “Drivers of M&A in 2013-2016: PI3Ks and BTK Inhibitors” by MP Advisors. The extent of deals on phosphoinositide-3-kinase (PI3K), Bruton's tyrosine kinase (BTK) and other kinase inhibitors, has been relatively limited, even though the segment has seen investment of around $10 billion in the past few years.

Report Details:

Drivers of M&A in 2013-2016: PI3Ks and BTK Inhibitors
Published: January, 2013
Pages: 62
Price: US$ 2,000.00

With scientific data on the role of PI3K and BTK kinases in cancer and clinical proof of concept data of the PI3K and BTK inhibitors reaching a critical mass, companies are poised to offer better treatment options for unmet need in hematologic malignancies, according to the study.

"We expect more acquisitions of the innovator companies and or handsome licensing deals for unpartnered products as mature data and approvals come in the next few years," said Dr Subita Srimal of MP Advisors, the strategic business advisor to Daiichi Sankyo when it acquired Ranbaxy Laboratories in 2008.

Dr Srimal told Scrip that while SymBio Pharmaceuticals (which partners Onconova in Japan/South Korea for rigosertib) could potentially strike some territory deals, an acquisition of the full company by existing partners - for example Pharmacyclics - could "break deal records like that of Pharmasset by Gilead".

In late 2011, Gilead had acquired Pharmasset for around $11 billion, with an eye on the potential of its experimental hepatitis C treatments.

Key milestones to watch out for this year include data from Onconova's rigosertib and Gilead's idelalisib, while data from Pharmacyclics' ibrutinib is expected by the year end or early next year, she explained.

In addition, the latest breakthrough therapy designation granted by the US FDA to Janssen/Pharmacyclics' ibrutinib for mantle cell lymphoma (MCL) and Waldenstrom's macroglobulinemia (WM) is expected to expedite the development and review time for the potential treatment. Janssen Biotech and Pharmacyclics had in 2011 entered into a collaboration and license agreement to co-develop and co-commercialize ibrutinib.

Asked whether she expects licensing deal sizes to hover in the same range as deals involving Onconova or Infinity (around $500m ahead of commericialisation), or around half this size (like the $239 million Merck-Exelixis take-out), Dr Srimal cautioned that the companies in the space are in no real hurry (for a deal) and have sufficient cash.

"They will strike a deal on more mature data and the deal value could potentially be better than Merck-Exelixis," she said.

Onconova had received $50 million upfront and potentially up to $515 million in pre-commercial development and regulatory milestones, plus undisclosed commercial milestone payments and royalties on sales of its small molecule anticancer drug rigosertib, under a license pact in Europe with Baxter International. The $488.5 million Infinity Pharmaceuticals-Intellikine deal involved global development and commercialisation rights to a portfolio of PI3K inhibitors assembled by the latter.

Exelixis, on the other hand, had ended its 2009 collaboration with Sanofi for inhibitors of PI3K alpha and beta, before teaming up with Merck for a multi-million dollar alliance. Exelixis then said that it would stay a party with Sanofi in a global license agreement to develop two other clinical development-stage PI3K inhibitors.

On whether dual inhibitors were potentially better placed against the backdrop of some fears that PI3K inhibitors may induce intolerable side-effects on essential cellular activities, Dr Srimal said that first-generation PI3K inhibitors were not isoform specific, hence the adverse events, and were aborted in early stages of clinical trials. But as the biology and nature of the kinase was understood better, new drugs have been found to be safer and have reached Phase II/III pivotal studies.

"The rationale for dual inhibitors is also appealing but the data has to be more mature to decide whether it's a better approach. mTOR dual inhibitors have been there for too long in the same stage of development suggesting that they have not hit the target as expected," she said.

More information can be found in the report “Drivers of M&A in 2013-2016: PI3Ks and BTK Inhibitors” by MP Advisors.

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