May 18, 2015
By Mark Terry and Riley McDermid, BioSpace.com Breaking News Staff
Boehringer Ingelheim and Australia-based Pharmaxis Ltd announced today that Boehringer Ingelheim had exercised its option to acquire global rights to Pharmaxis’ anti-inflammatory drug, PXS4728A, including all associated intellectual property rights.
Boehringer will pay an upfront payment of about €27.5 million, with additional milestone payments that could lead to a total of about $750 million (Australian).
“This is a transformational event for Pharmaxis,” said Gary Phillips, chief executive officer of Pharmaxis in a statement.
“With a total potential value in excess of $A750 million, it is a globally competitive deal and significant for the Australian biotech sector. We are delighted that Boehringer Ingelheim, a leader in cardiometabolic research and development, has acquired PXS4728A. Boehringer Ingelheim’s clinical expertise will now be applied to the development of this drug which has the potential to make a real difference in the treatment of diseases with high unmet clinical need.”
Prior to the news and the company’s subsequent surge in stock price, Pharmaxis was valued at $50 million.
“The reason for the dollars is there are few treatments for this stage of liver disease—non-alcoholic steatohepatitis, NASH, a liver inflammation that is a build-up of fat, the step before fatty liver disease,” said David Blake, the editor of Bioshares, in a statement. “Why would Boehringer Ingelheim fork out that sort of money? The real dollars here are because it’s a potentially big drug market.”
About three to five percent of the population of the U.S. is believed to have Non-Alcoholic Steatohepatitis (NASH) and there is currently no treatment. It resembles liver disease seen in alcoholics, but sufferers drink little or no alcohol. Boehringer Ingelheim was working on its own product in this area, but reportedly had problems getting it into development.
Analysts have been closely watching developments in the NASH space, particularly for Gilead, who has multiple potential candidates to treat the disease.
“We came out bullish that Sovaldi/Harvoni’s volume will increase in U.S. and Europe in 2015 driven by increased rebates to public segments. Gilead Sciences, Inc. ‘s pipeline is also advancing and Simtuzumab should have interim 48 week data in late 2015 in NASH,” wrote biotech head analyst Yaron Werber in a note to investors.
Alexander Poulos, a columnist at Seeking Alpha, said Gilead‘s NASH assets are just one more reason the company should consider merging with Vertex Pharmaceuticals .
“Naturally, a new novel therapy for an unmet need such as a viable treatment for Hepatitis B (HBV) or Non-Alcoholic Steatohepatitis (NASH) would significantly add to GILD revenue generating ability,” he said. “My current price target for GILD is $117 as detailed in a previous article . Assuming VRTX newest combo is approved, it is quite reasonable to conclude the proposal makes sense.”
Boehringer and Pharmaxis inked their original agreement in March 2015. PXS4728A is a semicarbazide-sensitive amine oxidase/vascular adhesion protein-1 (SSAO/VAP-1) inhibitor. An increase in NASH is related to a worldwide higher prevalence of type 2 diabetes and obesity. Analysts with FirstWord Pharma indicate that the market for treatments related to NASH could be worth $3.5 billion by 2025.
“We have ambitious strategic goals in diabetes and metabolism and this Phase I asset acquisition fits well into our development portfolio,” said Glyn Parkin, corporate senior vice president and Metabolism Head at Boehringer Ingelheim in a statement. “We are pleased to have achieved access to Pharmaxis’ research excellence and innovative approach to treatments for NASH. We will continue to build our portfolio through both internal and external innovation so that we are able to bring much needed medications to the patients we serve.”
Pharmaxis stock jumped by 45 percent after the news. It has gained 236 percent in the last year.
Pharmaxis is best known for Bronchitol for the treatment for cystic fibrosis. However, the U.S. Food and Drug Administration (FDA) rejected the drug in 2013 because there was not enough clinical trial data. The company has since signed a deal with an Italian drug distributor to restart the approval process in the U.S.
Also competing in the NASH space is Tobira Therapeutics, which is currently recruiting participants for a NASH study of cenicriviroc, and Gilead, which has an ongoing study for NASH with simtuzumab (G-6624).
A 2014 article in Alimentary Pharmacology & Therapeutics noted that since the original description of NASH, the industry has been awash in failed clinical trials looking for a treatment.
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