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Abbott outbids Biogen for Facet’s multiple sclerosis antibody

Abbott Laboratories has made a bid for a Massachusetts. In return, Abbott is getting par- slice of the multiple sclerosis (MS) market, tial ownership of a clinical pipeline, for which through its $450 million cash acquisition of Biogen Idec and New York–based Bristol-Myers Facet Biotech. The deal, announced in March, Squibb also have substantial claims, plus a set gives Abbott a stake in Zenapax (daclizumab), of protein engineering capabilities for optimiz- a potential MS treatment poised to move into ing antibody performance (see Table 1). It is phase 3 testing, as well as a portfolio of early not, however, getting its hands on a portfolio of and mid-stage cancer compounds. But for the lucrative antibody humanization patents held by Abbott Park, Illinois–based pharma, the move PDL BioPharma, of Fremont, California, which seems more like a toe-in-the-water exercise spun out Redwood City, California–based Facet than a headlong plunge. in December 2008. Whether Abbott’s inves- The scale of the transaction is miniscule when tors have obtained good value for their money set against Abbott’s recent €4.5 billion ($6.2 bil- remains for now an open question (see Box 1). lion) acquisition of Brussels, Belgium–based Although neither Abbott nor Facet officials Solvay Pharmaceuticals or its $6.9 billion pur- were available for comment, Zenapax, which is chase of Ludwigshafen, Germany–based Knoll about to start a phase 3 trial in MS, is gener- Pharmaceuticals in 2000. The latter deal, which ally regarded as the main driver for the deal. A gave it ownership of Humira (adalimumab), has humanized monoclonal antibody that blocks paid off handsomely: the tumor necrosis fac- interleukin-2 (IL-2) signaling by binding to tor alpha (TNF-α) inhibitor racked up around the alpha subunit (CD25) of the IL-2 receptor $5.5 billion in sales last year. The Facet purchase (IL-2R), it gained FDA approval for prevent- even appears relatively modest compared with ing kidney transplant rejection back in 1997. the $170 million—plus another potential $20 Basel, Switzerland–based Roche sold the drug million in milestones—Abbott lavished on a as Zenapax, but withdrew it from the market single phase 1 antibody, a nerve-growth-factor in 2003 for commercial reasons. Novartis, also inhibitor called PG110, which it acquired from of Basel, continues to market Simulect (basil- PanGenetics, of Utrecht, The Netherlands, last iximab), a chimeric antibody directed at the year. same target and indication that was approved Nevertheless, Abbott’s $27 per share offer sub- in 1998. Daclizumab has also been tested exten- stantially trumped the $17.50 offered by Facet’s sively in other indications involving abnormal development partner Biogen Idec, of Cambridge, T-cell responses, including the inflammatory © 2010 Nature America, Inc. All rights reserved. All rights Inc. America, Nature © 2010 Facet Biotech Facet

Facet’s daclizumab, an anti-IL-2 monoclonal antibody, is considered the main driver in the deal between Abbott and the biotech firm, whose Redwood City, California headquarters are pictured above.

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in brief Box 1 Weighing up the bids FDA crackdown on Although Biogen Idec may technically be viewed as the underbidder on the Facet deal, Genzyme the jury is out on whether its valuation of Facet’s assets was more accurate than that of Abbott’s. “Time will tell whether Biogen Idec was offering too little or too much at $17.50 Genzyme’s Allston Landing Facility in [per share],” says Eric Schmidt, biotech analyst at Cowen and Company in New York. Massachusetts, one of the world’s largest cell culture manufacturing plants, has become “Many of us are surprised that Abbott bid so much more than Biogen Idec because they the focus of an enhanced enforcement action [Biogen] have the inside track here,” he says. “If I were an outside observer, I would in what is perhaps a sign of an increasingly certainly trust Biogen Idec’s view of this asset because they know this drug better, and they tough stance at the US Food and Drug know this market better.” Schmidt dismisses any suggestions that Biogen management was Administration (FDA) on manufacturing discouraged from bidding any higher because of the attentions of investor Carl Icahn, who standards. The action, announced in March, has, up until recently, been pushing for a sale of the Cambridge, Mass.–based company or has led to a draft consent decree from FDA that requires Genzyme to pay a $175 million its division into two separate firms, focused on neurology and oncology, respectively. “up-front disgorgement of past profits,” Instead, Schmidt interprets the Biogen’s decision not to raise its bid beyond its final offer the company said. If the Allston plant as simply an example of management maintaining its financial discipline. “I think it’s kind continues to miss deadlines for domestic of refreshing,” he says. Conversely, Bret Holley, biotech analyst at Oppenheimer & Company and exported products, the draft also calls in New York, believe Biogen might have been taking another approach—trying to pull off an for a 18.5% disgorgement of revenues from acquisition at a heavily discounted price. “I think Biogen was trying to steal Facet on the products produced and distributed from the plant, and it could include heavy fines cheap because of its cash position.” ($15,000 per day per violation) if overall Schmidt is also unconcerned about the current safety problems besetting ocrelizumab, cGMP compliance is not met in coming years. a next-generation successor to Rituxan (rituximab), which Biogen Idec is co-developing The 185,000-square-foot Allston facility with Roche, of Basel, Switzerland. On March 8, the two firms announced a clinical hold on produces Genzyme’s therapeutic enzymes for phase 3 trials of the anti-CD20 antibody in rheumatoid arthritis and lupus erythematosus, rare genetic diseases—products that bring following the observation of serious and, in some cases, fatal infections in patients. A phase in more than one-third of Genzyme’s $4.5 billion in annual revenues. A February 2009 2 trial in multiple sclerosis is ongoing, however. “No one cares about ocrelizumab,” says warning letter from the FDA and several ‘483 Schmidt. Although the drug has the potential to extend or replace Biogen Idec’s Rituxan citations’ (formal notices to a manufacturer franchise—which it also shares with Roche—its share of the profits would be lower. of a violation) have documented problems Termination of ocrelizumab’s development is unlikely to have major negative consequences, at the plant that impact product quality and therefore. “It could [even] be a positive,” says Schmidt. show a lack of written procedures, training, Biogen Idec’s biggest issue lies elsewhere. “The principal concern and really the system maintenance and environmental testing. Genzyme, based in Cambridge, principal variable is Tysabri, and what they can do in the face of mounting PML [progressive Massachusetts, has responded to the latest multifocal leukoencephalopathy] cases,” says Holley, adding that he is sceptical of the FDA action by bringing in The Quantic value of the viral assay that Biogen Idec and its partner Elan of Dublin, are promoting to Group, a Livingston, New Jersey–based reduce the risk of patients on Tysabri developing PML. CS quality consulting firm, and moving its fill and finish operations to Hospira, a contract service company in Lake Forest, Illinois. In February, it also hired Scott Canute, eye condition uveitis, T-cell leukemia, human efficacy signals seen in MS patients treated with © 2010 Nature America, Inc. All rights reserved. All rights Inc. America, Nature © 2010 formerly of Indianapolis, Indiana–based Eli T-cell lymphotropic virus (HTLV)-1 associated Zenapax are not due to the direct suppression of Lilly, as president of global manufacturing myelopathy/tropical spastic paraparesis, asthma an abnormal T-cell response (which is generally and corporate operations. This followed the and chronic immune thrombocytopenia. But considered to be the main pathological feature recruitment in January of Ron Branning— its biggest commercial potential lies in MS, says of the condition). Instead, administration of formerly with Gilead Sciences of Foster Thomas Waldmann of the National Cancer the antibody appears to result in an expansion City, California—as senior vice president of bright global product quality. Until two years ago, Institute, in Bethesda, Maryland. Back in 1981, of immunoregulatory CD56 natural killer FDA personnel had regularly inspected the Waldman produced a murine predecessor to (NK) cells, which then suppress the activated Genzyme facility and had no complaints. Zenapax, anti-Tac, and along with his National T-cell population (Proc. Natl. Acad. Sci. USA It was only after a new inspector began to Institute of Health (NIH; Bethesda, Maryland) 103, 5941–5946, 2006). The precise details of tour the facility that things changed. “It was colleagues has built up a substantial body of how CD25 inhibition stimulates CD56bright NK like night and day,” says a person familiar with the situation, who spoke to Nature clinical evidence on Zenapax in multiple indi- cell growth, however, is not clear. “The issue of Biotechnology on condition of anonymity. cations (J. Clin. Immunol. 27, 1–18, 2007). how daclizumab works is a continuing story,” “Initially, the company didn’t know what to In MS, the antibody was initially thought to Waldmann says. think or how to respond.” Genzyme’s response selectively stop patients’ activated T cells, as they Market expectations surrounding the drug took too long and fell short of the FDA’s express high levels of the CD25 receptor sub- appear modest, notwithstanding recently expectations. The FDA’s move toward greater unit. Resting T cells, in contrast, rarely express reported efficacy data from a phase 2 trial in oversight and more stringent adherence to GMP is possibly the result of criticisms levied CD25. Antibody binding to CD25 prevents the which the drug was administered in combina- following the heparin contamination debacle subsequent recruitment of the beta (CD122) tion with interferon-beta (interferon-β; Lancet (Nat. Biotechnol. 26, 589, 2008) and other and gamma (CD132) subunits of IL-2R, which Neurol. 9, 381–390, 2010). Patients given high- food and drug safety problems. In the 2010 are necessary for IL-2–mediated signal transduc- dose Zenapax plus interferon-β developed 72% budget, the agency received an increase of tion and further T-cell activation and prolifera- fewer new lesions than those on interferon more than a half-billion dollars, up to $3.2 billion, with an emphasis on improving tion. However, one important line of evidence, alone. “It’s fairly easy to get good efficacy data product safety. Keith L Carson originally put forward by Waldmann’s NIH in autoimmune disease,” says Eric Schmidt, bio- colleague Bibiana Bielekova, suggests that the tech analyst at Cowen and Company in New

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Table 1 Facet Biotech pipeline in brief Drug Description Indication Status Partner Ariad’s NF-κB blow Daclizumab Humanized monoclonal antibody that MS Phase 2 Biogen Idec The US Court of Appeals for the Federal Curcuit in binds alpha subunit of IL-2 receptor March ruled for Eli Lilly in Indianapolis, Indiana, Volociximab Chimeric monoclonal antibody that Solid tumors Phase 2 Biogen Idec and against Ariad Pharmaceuticals, affirming an binds α5β1 integrin earlier decision by a three-judge panel and dealing Elotuzumab Humanized monoclonal antibody that Multiple myeloma Phase 1 Bristol-Myers Squibb a possible death blow to Ariad’s broad claims binds CS1 glycoprotein (BMS) on the nuclear factor κB (NF-κB) pathway (Nat. PDL192 Humanized monoclonal antibody Oncology Phase 1 – Biotechnol. 27, 494, 2009). A 2006 jury ruling that binds TweakR (tumor necrosis that Lilly’s Evista (raloxifene) and Xigris (activated factor–like weak inducer of apoptosis protein C) infringed Cambridge, Massachusetts– receptor) based Ariad’s NF-κB patent alarmed much of PDL241 Humanized monoclonal antibody that Multiple myeloma Preclinical BMSa the drug development world, stoking fears that binds CS1 glycoprotein broad patent claims on biological pathways would stifle drug development. The March opinion aBMS retains an option on this program. again invalidated Ariad’s claims and affirmed that patents must meet a written description requirement separate from an enablement York. “The real hurdle to drug discovery in MS suppressive effects, it could find a niche as part requirement—an issue that has divided the has been good efficacy coupled with a good of a combination therapy. “Daclizumab has appeals court since a 1997 ruling established safety profile.” been used with lots of other immunosuppres- written description, dubbed the Lilly doctrine “There’s very little doubt, based on its use in sive agents, so it might be of value there,” says (Nat. Biotechnol. 16, 87, 1998). Ariad is other indications, that it will have side effects,” Waldmann. The recent phase 2 study did not considering petitioning for Supreme Court review. says Bret Holley, biotech analyst at Oppenheimer definitively show that the combination was But the Supreme Court has “bigger fish to fry with patentable subject matter right now,” says & Co. in New York. “It’s very tough to see how it responsible for the benefit seen, as the trial did University of Michigan law professor Rebecca differentiates against other MS therapies that are not include a Zenapax-only arm. Moreover, Eisenberg, alluding to Association for Molecular on the market or in the pipeline.” As clinical data some patients who developed neutralizing anti- Pathology v. US Patent and Trademark Office are limited, the real test will be its effect on relapse bodies against interferon-β therapy still derived (the Myriad Genetics gene patenting case, rate and its long-term safety profile in a large pop- benefit. “There’s really been essentially no large seemingly destined for Supreme Court review), and Prometheus v. Mayo, another dispute over ulation. But so far, Holley says, Zenapax appears trial that has shown that combination therapy the patentability of ‘natural processes’. Ariad also to offer efficacy intermediate between that of the was better than each of the components indi- lost an NF-κB patent infringement case against older, so-called ABCR drugs (Avonex, Betaseron, vidually,” says Jeffrey Cohen, of the Cleveland Amgen, of Thousand Oaks, California, and the US Copaxone and Rebif) and newer, more potent Clinic, in Cleveland. Even so, Cohen also pre- Patent and Trademark Office invalidated most of therapies, such as Tysabri (natalizumab), Gilenia dicts that drug could have a future—even if it’s a Ariad’s patent claims in a separate review (Ariad (fingolimod/FTY720), which the FDA has under modest one. “We still need additional therapeu- has appealed), suggesting the NF-κB patent has little life left. Ken Garber priority review, and cladribine, to which the FDA tic options in MS,” he says. “Almost any addi- gave an initial rebuff last year. tional option in our repertoire is good.” Orphan drug workshops Given the drug’s relatively mild immuno- Cormac Sheridan Dublin In an effort to increase the number of drugs available to treat rare diseases and to help make © 2010 Nature America, Inc. All rights reserved. All rights Inc. America, Nature © 2010 the US Food and Drug Administration (FDA) more approachable, the FDA is hosting a series of workshops to encourage regulatory submissions for orphan drug designation for drugs aimed at treating rare diseases. The agency’s Office in their words “Right now your family history may be your best of Orphan Products Development (OOPD) is bet and it doesn’t cost anything,” Francis Collins, holding these events to help academics, biotech San Diego–based Illumina director of the US National Institutes of Health and companies and those unfamiliar with the process has sequenced the leader of the Human Genome Project, downplays complete the best application possible. The first genome of actress Glenn the impact of gene-based tests such as those workshop, held in February at the Claremont, Close, whose family has a offered by Navigenics, 23andMe and DecodeMe. California–based Keck Graduate Institute, history of mental illness. (Reuters, 31 March 2010) resulted in 14 submissions from the 29 potential She took advantage of the sponsors who attended. Timothy Coté, director $48,000 service in the “I personally believe that Becky McClain is really of the OOPD, explains that the workshops are hope that it would help the canary in the coal mine.” Jeremy Gruber, “a way to demystify the process,” which is destigmatize the disease from the Council of Responsible Genetics, on the sometimes deemed to be daunting. “Sponsors Photo by Adam Scull, PHOTOlink Scull, Adam by Photo and aid efforts to find a recent $1.4 million in compensation awarded to a approach the FDA with considerable fear and Illumina reaches cure for these ailments. former Pfizer scientist who claimed a genetically loathing. And that's not a good thing,” he says. Hollywood Close’s husband is a engineered virus had caused her paralyzing Though an orphan drug status does not ensure biotech entrepreneur. illness, stresses that safety regulations have not a drug will be approved for sale, the designation kept up with the pace of research. (New York Times, typically helps attract investor interest and “The environment to launch new product…is going 2 April 2010) provides other benefits, such as seven years of to be tougher, the pricing is going to be tougher, market exclusivity and tax credits. Coté hopes the probability (of drug approvals) is probably going “Merck is now a bigger beast to feed.” Merck’s that these workshops will be the “beginning of a to be more challenging.” Biogen Idec’s James C. Margaret Beer urges biotechs gathered at a recent more candid relationship” between the FDA and Mullen, who is leaving the firm in June, paints a conference in London to approach the newly potential sponsors and that they will increase less-than-rosy future for biotechs after healthcare expanded company, as it is still actively searching the chances of rare-disease therapies reaching reform. (The Boston Globe, 31 March 2010) for opportunities. (PharmaTimes, 29 March 2010) the clinic. Kirsten Dorans

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