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Sanofi (France) (SAN.PA) Abandons Antibiotics Deal With South San Francisco's KaloBios Pharmaceuticals, Inc. (KBIO)



7/28/2014 3:56:25 PM

Sanofi Pasteur Abandons Antibiotics Deal With South San Francisco's KaloBios Pharmaceuticals, Inc.
Sanofi Pasteur Abandons Antibiotics Deal With KaloBios Pharmaceuticals, Inc.
July 29, 2014
By David Sohn, BioSpace.com Breaking News Staff

South San Francisco based KaloBios (KBIO) announced that it has abandoned collaborative efforts with the French pharmaceutical company, Sanofi Pasteur (SAN.PA), in the KB001-A program. According to the press release, KaloBios reached agreements earlier this week to regain exclusive rights to the development of the program, which it had previously licensed to Sanofi in 2010.

Under the previous collaboration, the two pharmaceutical companies were jointly engaged in KB001-A, which focused on the development of a proprietary monoclonal anti-body for the treatment and prevention of Pseudomonas aeruginosa (Pa) lung infection in cystic fibrosis patients. Sanofi agreed to the termination of the licensing agreement “in consideration of low single digit royalties”. The French pharmaceutical developer will be subject to a $40 million cap on aggregate royalties paid from KB001-A and additionally, “[Sanofi] will be entitled to receive up to 10 percent of certain sub-license payments or other milestone payments received in the event KaloBios successfully re-partners KB001-A,” stated the press release.

"We are grateful to Sanofi for the work they did to advance the KB001-A program, including their global epidemiology study that supports KaloBios' assumptions about the large market potential for KB001-A in […] pneumonia. At the same time, we are pleased to regain the global rights for KB001-A across all indications," said David Pritchard, chief executive officer of KaloBios.

The bay area pharmaceutical company is currently in phase 2 clinical trials with the chronic Pa lung infection treatment. KaloBios hopes to announce results of the study early Q1 of 2015. According to the press release, earlier phase 1/2 studies conducted by Kalobios and Sanofi demonstrated a 50 percent reduction in lung infections with KB001-A. The efficacy data was used as part of a submission that granted the program Fast Track Status from the FDA. The Fast Track designation allows therapeutics developed for serious illnesses with currently unmet medical needs an accelerated review process through the FDA.
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KaloBios traded at $1.62 this morning, 16 percent lower from yesterday’s close. The protein-based therapeutics developer delivered an initial public offering earlier last year with bids opening at $8.00. The company beat analysts’ consensus last quarter with a reported earnings per share of -$0.32, as compared to the -$0.34 estimate. KaloBios reported an EPS of -$0.49 the same quarter of last year. The company is scheduled to report its Q2 earnings on August 18th. Zacks upgraded shares in the company to “outperform” earlier in July.

In addition to infectious disease, KaloBios conducts research and development in leukemia and autoimmune disease treatments. Leukemia therapeutic, KB004, is currently in phase 2 clinical trials. The treatment seeks to selectively target cancerous cells based utilizing monoclonal antibodies for tyrosine kinase receptors. Development of KB003, a treatment for severe asthma, was discontinued early last year after its phase 2 failed to show clinical effectiveness.

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