Denmark's Novo Nordisk is paying ZymoGenetics $24 million in up-front cash for rights to a fully-human, pre-clinical anti-IL 21 monoclonal antibody in autoimmune and inflammatory disease, and for broad intellectual property rights in a related area, Novo Nordisk announced Dec. 8.
The deal terms include $157.5 million in potential milestones, up to and including the antibody's regulatory approval in major global markets, and royalties on net sales. ZymoGenetics may opt to co-promote the biologic in the U.S., for a $10 million fee and a 15 percent contribution to Phase III trial costs. In this scenario, U.S. royalty payments would increase from single to double digits.
Given that the antibody is still pre-clinical, the rich up-front payment likely reflects the value of the IP component of the deal. This covers not just IP surrounding the IL-21 antibody itself, but also the broader concept of blocking the IL-21 cytokine, which ZymoGenetics discovered was a key mediator of inflammation.
Ring-Fencing Anti-IL-21 Treatment Approaches
Indeed, explains Novo's EVP and CSO Mads Krogsgaard Thomsen, "we're buying all IP surrounding [the blocking of] IL-21 as a concept, and its utility in different disease areas."
He is convinced that this should provide the Danish firm with "a good degree of exclusivity on this target. We now have global patent rights to block cytokine IL-21; no one else can do that." (Competitors could block the IL-21 receptor, however, just not the molecule itself.) Such strong asset protection is likely to become tougher to secure, not least as more and more companies work on a diminishing number of validated targets. That's why it was worth Novo's paying what Thomsen described as a "full price, but a reasonable one."
Indeed, the exclusivity that Novo has bought surrounding the IL-21 target contrasts with the IP situation around, for example, TNF-alpha. Since this target's role in inflammation and apoptopic cell death was discovered during the 1980s, a decade or so earlier than that of IL-21, it effectively hasn't been patented as a target - which explains why there's a handful of competing anti-TNFs on the market, including Johnson & Johnson's infliximab Remicade , Wyeth/Amgen's etanercept Enbrel , Abbott Laboratories' adalimumab Humira and UCB's certolizumab Cimzia . In this field, "you can only patent your own antibody, you can't prevent others from developing their own antibodies," summed up Thomsen.
Reverse Proof of Principle for IL-21 from Cancer Studies
It remains to be seen, of course, whether IL-21 proves as valuable a therapeutic target as TNF-alpha in treating autoimmune disorders. But Novo's taking heart from ZymoGenetics' Phase II studies of a recombinant IL-21 cytokine in renal cancer and metastatic melanoma. ZymoGenetics' cancer data provides clear biological evidence, according to Thomsen, that the IL-21 cytokine is involved in regulating the immune system (and thus the inflammatory response)."The immune system biomarkers appear up-regulated," he elaborates, "which tells you that we have reverse proof of principle in man." It may be the opposite effect -IL-21 stimulation is what's useful in cancer, whereas blocking the same pathway has potential utility in auto-immune and inflammatory conditions--but "it's better than if we had no human biology at all."
And Novo knows more about this cancer data that most, since it was, until early 2009, ZymoGenetics' development partner on this project. Before its strategic decision to exit oncology in favor of focusing on its diabetes pipeline, Novo had licensed ex-US rights for oncology development to the preclinical molecule. (See 'Novo Nordisk: Riding High on Diabetes,' IN VIVO, June 2007)
Zymo Gets Cash, Focus
In reality, the partners' history goes back well before 2002; indeed, ZymoGenetics was spun out of Novo in 2000. ('The Pink Sheet,' Sep 13, 1999) For the Seattle-based biotech, this deal provides welcome cash to help it fund the IL-21 cancer programs, plus Phase II trials of PEG-interferon lambda for Hepatitis C. ZymoGenetics stands to receive $1.5 million upon IND-filing and $8.5 million at the start of Phase I, expected in late 2010.
The transaction also contributes to the biotech's ongoing bid to streamline its portfolio and focus on its highest-value assets. In 2009, ZymoGenetics handed partner Merck Serono full rights to lupus drug atacicept and also that year helped furnish start-up Seattle Life Sciences with eight pre-clinical programs and IP that it had no plans to monetize itself ('The Pink Sheet' DAILY, May 6, 2009). At the start of December, the biotech announced its second round of job-cuts this year and its intention to scrap its immunology discovery activities.
Meanwhile Novo won't be supplementing this deal with any later-stage licensing deals in inflammation, since "we'll already be more than doubling the pool of patients we have in clinical trials next year," claims Thomsen, driven largely by the company's two Phase III new-generation insulins and the cardiovascular program for its once-daily GLP-1 analog liraglutide (launched in Europe as Victoza ).
Thomsen confirmed in an interview that Novo is still expecting FDA to issue its formal feedback on Victoza - which Novo submitted to the U.S. regulators as a type 2 diabetes treatment in May 2008 - before the end of the year. ('The Pink Sheet' DAILY, Aug. 6 2009)
-Melanie Senior (m.senior @elsevier.com)
This article is reprinted from "The Pink Sheet" DAILY –Dec 8, 2009
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