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The path of least resistance
February 2010
by Lori Lesko  |  Email the author


LONDON—Aimed at killing drug-resistant superbugs and strengthening its antibiotic pipeline, global drugmaker AstraZeneca is poised to purchase infection research company Novexel of France, while striking a separate deal with Forest Laboratories for the developmental rights to Novexel's potential antibiotic booster targeted toward fighting antibiotic-resistant infections. This includes methicillin-resistant Staphylococcus aureus (MRSA) and other infections patients contract during their hospital stays.  
Under the terms of the agreement, announced Dec. 23, AstraZeneca will reeive 100 percent of Novexel's shares for $350 million in cash, payable at acquisition completion in the first quarter of 2010, and pay up to an additional $75 million to Novexel shareholders if specified development milestones are reached. AstraZeneca will also transfer to Novexel shareholders an amount equivalent to the cash balance of Novexel at closing, approximately $80 million.  
"Under a separate agreement, AZ and Forest have agreed that following the acquisition, Forest will pay Novexel, then an AZ group company, a sum equal to half of the acquisition costs of Novexel and half of any such specified development milestone payments in return for rights to CAZ104 in North America and the buy down of payment obligations in relation to CEF104 to Novexel from previous existing license arrangements," according to company.  
AstraZeneca's deal with New York-based Forest calls for the companies to collaborate on development of a drug called NXL 104, aimed at enhancing the effectiveness of certain antibiotics while counteracting bacterial resistance.  
The deal centers on Novexel's two most advanced drug programs, CAZ104 and CEF104, which are in development to treat bugs that have gained resistance to existing antibiotics, a trend that is spurring research into new anti-infective medicines.  
CAZ104 is a combination of a compound developed by Novexel called NXL- 104 and ceftazidime, an antibiotic facing resistance from strains of bacteria. The addition of NXL-104 helps to overcome that resistance. The drug is being developed to treat serious infections in the abdomen and urinary tract, as well as pneumonia, and is scheduled to enter Phase III clinical trials later this year.  
CEF104 is a combination of NXL-104 and ceftaroline, a novel antibiotic from Forest Laboratories that AstraZeneca bought the European rights to in August 2009. "Both deals … serve to expand our anti-infective pipeline, " says Christopher Sampson, AZ company spokesman. "Signing the simultaneous agreement with Forest … draws on our respective skills and capabilities in development, registration and commercialization in different geographies."  
Forest had previously signed an agreement in 2008 with Novexel granting Forest the rights to use Novexel's beta lactamase inhibitor (BLI), NXL-104, with Forest 's ceftaroline.
"So for AstraZeneca, the Novexel deal was a way to add two new late-stage anti- infectives to its pipeline," Sampson says. "For Forest, it was a way to gain additional rights to the combination of ceftazidime and NXL 104, and to gain full worldwide rights to the ceftaroline/NXL 104 combination, while simultaneously licensing rights outside the United States, Canada and Japan to AstraZeneca. The agreement with Forest offers us access to a next generation cephalosporin, ceftaroline, at a time when demand for new, effective, antibiotic agents is high. Many bacterial infections have few satisfactory treatment options currently, and there is strong demand for novel differentiated agents for both resistant gram-positive (such as MRSA) and gram-negative infections.  From a pipeline perspective, ceftaroline represents a Phase III opportunity with launch anticipated from 2011 to 2012 in the EU."  
Worldwide demand "for new effective and differentiated antibiotic agents is high because many bacterial infections currently have few satisfactory treatment options," he says. "This unmet medical need is high in both established and emerging markets. In fact, rates of bacteria known as pseudomonas, and those expressing Extended Spectrum Beta Lactamases (ESBL) are often higher in emerging markets—and these are cases where the combinations with Novexel's compounds may be useful."  
AZ's main competition in the R&D battle is not another drug company.  
"In the area of infection, the battle is with the bugs," Sampson said. "We are trying to develop new treatments faster than the bacteria can develop resistance. Pharmaceutical companies are increasingly reluctant to invest in antibacterial discovery and development and several companies have abandoned this field of research."
Frank J. Murdolo, vice president of investor relations at Forest Laboratories, declined to comment.  
Novexel CEO Iain Buchanan says the agreement "highlights the significant progress that Novexel has made since it was spun out of Aventis Pharma S.A. in December 2004, and demonstrates the added value of placing promising assets in an entrepreneurial structure in France.
"Over the last five years we have made the appropriate decisions to advance the pipeline," Buchanan said. "I am confident that the acquired assets will receive continued investment from both AstraZeneca and Forest, and will have the possibility to play an important therapeutic role to combat resistant organisms in the hospital." 

AstraZeneca acquires Biovitrium's obesity program  
STOCKHOLM, Sweden—In late December, AstraZeneca also announced its acquisition of Biovitrum's rights to its leptin modulator program aimed at treating obesity.
AstraZeneca will give Biovitrum an upfront payment of $8.6 million and milestone payments contingent on development progress and sales, as well as single-digit percentage royalties. If a product is approved, the agreement allows up to $267.6 million in upfront and milestone payments to Biovitrum. The leptin modulator program is currently in the preclinical phase.  
"AstraZeneca is committed to working towards finding new solutions to health problems that stem from diabetes and obesity, two risk factors for cardiovascular disease," says Björn Wallmark, vice president of cardiovascular and gastrointestinal research at AstraZeneca. "We are pleased that we have obtained this discovery program. It increases the strength of our portfolio of compounds that can potentially lead to medicines that meet the needs of patients."  
"We are very happy that this exciting and completely novel approach to treat obese patients will continue to be developed through AstraZeneca, a company with a long heritage and strong presence in the cardiovascular disease area," says Peter Edman, CSO of Biovitrum. "We are sure that AstraZeneca will continue to develop the opportunity in a capable way and potentially add new treatment options for obese patients."
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