Life Sciences Deal Flows Boost Positive Mood at JPMorgan Healthcare Conference

By Marie Daghlian

Optimism ran high at the annual JPMorgan Healthcare Conference in San Francisco this week, a marked turnaround from last year when there was hope, but also a lot of uncertainty. While biotech executives were keenly aware that investor appetite for risk remains tepid, they seemed eager to tout the promise of their development programs to address unmet healthcare needs. Meanwhile, several big pharma companies emphasized the growing importance of emerging markets while not forgetting to reassure the audience that innovation is still a key element for sustaining their business models.

GlaxoSmithKline (GSK) looked to Epizyme Therapeutics as a potential source of innovation. The companies announced a strategic alliance to discover, develop and market novel small molecule therapeutics targeting histone methyltransferases, an important class of epigenetic enzymes, for the treatment of cancer and other diseases.

Epizyme will use its discovery platform, including its proprietary chemical library, expertise, and intellectual property, to discover and develop therapeutics against an undisclosed set of targets. The privately-held Massachusetts-base company will receive an upfront payment of $20 million, as well as research funding. Epizyme is eligible to receive more than $630 million in total milestone payments if medicines are commercialized for all targets in the collaboration, plus double-digit royalties on net sales of products resulting from the alliance. Epizyme will be primarily responsible for research up to development candidate selection for each target in the collaboration, and GSK will be solely responsible for development and commercialization [See story].

Finnish drug developer BioTie Therapies said it would acquire privately-held California-based Synosia Therapeutics in a $121.5 million all share deal to create a leader in central nervous system drug development. The combined company will have a pipeline of nine clinical-stage drug candidates including nalmefene, Biotie's late-stage product candidate for the treatment of alcohol dependence, which recently reported positive results from the first two trials conducted by its partner Lundbeck and is on track for submission for approval in Europe in the second half of 2011.

Synosia brings a pipeline that includes two mid-stage drug candidates: one for Parkinson’s disease, and a potential first-in-class hydroxyphenyl-pyruvate dioxygenase inhibitor intended for movement disorders. Synosia also recently announced a partnership with UCB Pharma to develop these compounds that included a $20 million equity investment and has potential for $725 million in milestone payments plus royalties.

NextWave Pharmaceuticals closed a $45 million series C financing round co-led by new investors Panorama Capital and Bay City Capital. Kearny Venture Partners also participated in the financing as well as current investors Aisling Capital, Fidelity Biosciences, Sofinnova Ventures, and Vivo Ventures.

NextWave is a specialty pharma with a proprietary drug delivery technology primarily focused on the development and commercialization of products for the treatment of cardiovascular and CNS diseases. It will use the funds to commercialize Nexiclon XR, its recently launched treatment of hypertension, expand its CNS portfolio, and prepare for the introduction of a novel extended-release liquid methylphenidate for Attention Deficit Hyperactivity Disorder, currently under review by the FDA.

Connecticut-based Rib-X Pharmaceuticals raised $20 million to support ongoing development of its broad spectrum antibiotics pipeline, including late-stage clinical development of delafloxacin, which is expected to enter a phase 2b study in early 2011.

The financing was led by current investor Warburg Pincus. Delafloxacin is novel fluoroquinolone antibiotic being developed against treatment resistant infections in the hospital setting.

DuPont’s (DD) $6.3 billion acquisition of Danisco was the biggest life science deal and occurred outside the healthcare space. Danisco, probably best known in this country as the company behind Dannon yogurt, is a global enzyme and specialty food ingredients company. DuPont and Danisco, through its enzyme division Genencor, became partners in the spring of 2008 in a 50/50 global joint venture to develop and commercialize a low-cost technology solution for the production of cellulosic ethanol, a next generation biofuel produced from non-food sources that had the potential to address a $75 billion global market opportunity.

“In addition, biotechnology and specialty food ingredients have the potential to change the landscape of industries, such as substituting renewable materials for fossil fuel processes and addressing food needs in developing economies, that will generate more sustainable solutions and create growth for the company," says DuPont Chair and CEO Ellen Kullman. [See story]

DEALS FOR THE WEEK ENDING JANUARY 14, 2010

Global Venture Financings
Company	Location	Amount Raised (USD M)	Principal Activity
NextWave Pharmaceuticals	Cupertino, CA	45.0	Specialty pharma
VisionCare Ophthalmic Technologies	Saratoga, CA	31.0	Vision
Avinger	Redwood City, CA	25.0	Catheters for PAD
Civitas Therapeutics	Chelsea, MA	20.0	Inhaled formulations of drugs
Rib-X Pharmaceuticals	New Haven, CT	20.0	Antibiotics
iWalk	Cambridge, MA	15.0	Prosthetics
Dekkun	Cambridge, MA	9.9	Stealth mode
Celleration	Eden Prairie, MN	8.0	Ultrasound
Ocular Therapeutix	Bedford. MA	6.0	Ophthalmology
TruTouch Technologies	Albuquerque, NM	2.1	Biometric intoxication detection
Mithridion	Madison, WI	1.3	CNS
Vaximm	Basel, Switzerland	8.1	T-cell-based vaccines
Interface Biologics	Toronto, Canada	7.0	Biopolymers
Polyplus Transfection	Strasbourg, France	3.3	Delivery of nucleic acids
Total Raised US	183.3
Total Raised Non-US	18.4
Grants
Company	Funding/Contracting Agency	Amount Raised (USD M)	Principal Activity
Rosetta Genomics (Israel)	Office of Israeli Chief Scientist	0.5	Molecular diagnostics
Oryzon Genomics (Spain)	Alzheimer's Drug Discovery Foundation	0.3	Alzheimer's disease
VistaGen Therapetuics	NIH NHLBI	0.3	Stem cell technology
NuPotential	NIH NHLBI	0.2	Stem cell technology
Collaborative Drug Discovery	Bill & Melinda Gates Foundation	2.8	Drug discovery cloud platform
Total Grants		4.1
Public Financings
Company	Ticker	Amount Raised (USD M)	Financing Type
Genesis Biopharma	OTC:GNBP	0.6	PIPE
RegeneRx	OTC:RGRX	1.5	PIPE
Acadia Pharmaceuticals	ACAD	15.0	PIPE
Cell Therapeutics	CTIC	25.0	PIPE
NeoGenomics	OTC:NGNM	3.0	PIPE
Celsion	CLSN	5.0	PIPE
ALDA Pharmaceuticals (Canada)	TSX-V:APH	0.2	PIPE
Bioniche Life Sciences (Canada)	TSX:BNC	12.7	Follow on
Quidel	QDEL	52.6	Follow on
WebMD	WBMD	400.0	Debt
Dendreon	DNDN	500.0	Debt
RegeneRx	OTC:RGRX	11.0	Commited equity agreement
CytRx	CYTR	7.0	Sale of equity interest in Rxi
Ventrus Biosciences	VTUS	2.6	Overallotment from IPO
Total Public Financings-US		1,023.3
Total Public Financings-Non-US		12.9
M&A
Acquirer	Target	Deal Value (USD M)	Focus
DuPont	Danisco (Denmark)	6,300.0	Industrial/Ag
BioTie Therapies (Finland)	Synosia Therapeutics	121.5	CNS drugs
Teleflex	VasoNova	55.0	Medical devices
iCAD	Xoft	51.8	Medical devices
Rochester Medical	Laprolan (Fornix-Netherlands)	13.7	Medical devices
Water Street Healthcare Partners	OraPharma (J&J)	N/A	Dental
Qiagen (Germany)	Alacris Theranostics (Germany)	N/A	Biomarkers
Sinopharm (China)	Aurobindo Bio Pharma (Aurobindo-India)	N/A	Generics
Illumina	Epicentre Biotechnologies	N/A	Tools/Technology
Behrman Capital	Atherotech	N/A	Diagnostics
Alliances
Company/Licenser	Company/Licensee	Deal Value (USD M)	Focus
Boehringer Ingelheim (Germany)	Eli Lilly	1,233.0	Diabetes alliance
Eli Lilly	Boehringer Ingelheim (Germany)	1,175.0	Diabetes alliance
Epizyme	GlaxoSmithKline (United Kingdom)	630.0	Epigenetic therapeutics alliance
Xencor	Amgen	500.0	Autoimmune license option
Zinfandel Pharmaceuticals	Takeda Pharmaceutical (Japan)	87.0	Alzheimer's diagnostic license
Taijitu Biologics (Singapore)	PPD	25.0	Antibody discovery joint venture
arGEN-X (Netherlands)	Eli Lilly	N/A	Antibody collaboration
Transgene (France)	Beckman Coulter	N/A	Companion diagnostic development
Kissei Pharmaceuticals (France)	BHV Pharma	N/A	Endocrine/diabetes license
ImmunGene	Cephalon	N/A	Cancer, drug delivery partnership
On-Q-ity	LabCorp	N/A	Pharmacogenetics license
OSI Pharmaceuticals (Astellas-Japan)	PanOptica	N/A	Ophthalmic license
Viropro	Spectrum Pharmaceuticals	N/A	Cancer biosimilar partnership
Seegene (Korea)	Caliper Life Sciences	N/A	Molecular diagnostics partnership
Aerogen (Ireland)	Dance Pharma	N/A	Inhaled Insulin technology license
Pharmasset	Bristol-Myers Squibb	N/A	Hepatitis C collaboration
Resolvyx Pharmaceuticals	Celtic Therapeutics	N/A	Ophthalmic license
BioFocus (Galapagos-Belgium)	Ono Pharmaceutical (Japan)	N/A	Autoimmune collaboration
MerLion Pharmaceuticals (Singapore)	Alcon (Novartis-Switzerland)	N/A	Anti-infective drug license
Opko Health	Bristol-Myers Squibb	N/A	Alzheimer's diagnostic collaboration
Eurand (Italy)	Nycomed (Switzerland)	N/A	Gastrointestinal drug marketing
Parexel	Merck	N/A	Biosimilars alliance
Chugai (Japan)	Circadian Technologies (Australia)	N/A	VEGF-D IP license
Orexo (Sweden)	Invida (Singapore)	N/A	Cancer pain drug marketing license