Celgene Shells Out $82.5 Million in Cash for Portfolio, Option to Buy Lycera
Published: Jun 09, 2015
June 9, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Ann Arbor, Mich.-based biopharma Lycera will license its RORgamma agonist to Celgene Corporation as part of a $105 million-plus deal to create new cancer immunotherapies which also give Celgene the option to buy Lycera, the two companies announced Tuesday.
Under the terms of the deal, Celgene will pay Lycera $82.5 million in cash up front, with Lycera possibly receiving an additional $22.5 million in short-term payments via other licensing option rights.
"Lycera is making rapid progress in advancing novel oral immune modulatory compounds, for the treatment of cancer and immune disease, which are highly complementary to Celgene's platform," said Tom Daniel, president of Research & Early Development of Celgene, in a statement. "The collaboration will allow further acceleration of these efforts, with the ultimate goal of realizing a substantial impact on patient care."
Celgene will also now develop Lycera’s main drug candidate, LYC-30937, which is currently in Phase 1 trials for the treatment of irritable bowel syndrome by using a patient’s own immune system to fight the disease. LYC-30937 is what’s known as an oral gut-directed ATPase modulator, while the RORgamma portfolio is designed to boost the body’s immune system T-cells to help fight off what the companies hope will be a broad range of cancers.
"We are very excited to begin a partnership with Lycera, a company that has created two programs based on great, potentially breakthrough science," said George Golumbeski, senior vice president of Business Development & Licensing at Celgene. "The collaboration structure utilized here, allows us to work very closely with Lycera to expand and progress their programs, and the structure aligns all involved in the work toward a future M&A event. I very much look forward to seeing these exciting programs mature."
In another eyebrow-raising caveat, today’s deal also gives Celgene the option to acquire Lycera at either the ends of the option period or if the company hits certain clinical milestones. Until then, however, Lycera retains full control of its R&D programs.
“Celgene made clear that they valued both our world class team and scientific excellence. This investment and strategic collaboration will allow our company to continue to capitalize on the productive research and development pipeline we have established,” Lycera President and CEO Paul Sekhri said in a statement.
Lycera already has two existing collaborations with Merck & Co. to discover, develop and commercialize small molecule therapies for autoimmune disorders. It was founded in 2006 based on an initial scientific platform in-licensed from the University of Michigan, with lead investors including InterWest Partners, ARCH Venture Partners, Clarus Ventures and EDF Ventures.
When Will Pfizer's Breakup Happen?
Speculation that the revamping of Pfizer Inc. ’s internal business structure could happen as soon as this year has biotech wondering just when this Big Pharma company could see changes.
Last week an analyst with J.P. Morgan said he thinks there will be a much faster timeline than most of Wall Street had predicted for Pfizer’s stated mission to refocus its efforts on new medicines.
Pfizer initially announced in 2012 that it would be shedding units that were non-essential to that goal. It then promptly sold its nutrition silo to Nestle for $11.85 billion, which was rapidly accompanied by a public spin-off of its animal health business for $2.2 billion.
“While a Pfizer break-up would likely be a 2017 event, we see potential catalysts in 2015-2016," said Chris Schott, an analyst at J.P. Morgan. "Three years of audited financial statements (2014-2016) are required before any part of Pfizer can be spun off, and we also see 2017 as an attractive time for action as investors see Pfizer’s innovative pipeline clearly contributing to growth and the established business having transitioned to a more stable profile."
BioSpace wants to know what you think: Will Pfizer be a changed company by the end of 2015?