Acquisition elevates Sunovion’s respiratory focus
Company’s $100 million-plus purchase of Elevation Pharmaceuticals comes with novel nebulizer for COPD
MARLBOROUGH, Mass.—Looking to takeits respiratory focus and that of parent company Dainippon SumitomoPharma Co. Ltd. (DSP) to the next level, Sunovion PharmaceuticalsInc. announced Aug. 30 that it will acquire Elevation PharmaceuticalsInc., a privately held biopharmaceutical company specializing in thedevelopment of new aerosol therapies for patients with respiratorydiseases, for an upfront payment of $100 million.
The deal, which has been approved byboth companies' boards and is subject to customary closingconditions, also includes up to $90 million in development milestonepayments for EP-101, Elevation's inhalation solution of along-acting muscarinic antagonist (LAMA) bronchodilator that is inPhase IIb clinical trials for the treatment of patients with moderateto severe chronic obstructive pulmonary disease (COPD). Onceregulatory approvals are granted, Sunovion will also pay up to $210million in commercial milestone payments for EP-101 as well as $30million in subsequent milestone payments upon the successivedevelopment of additional new programs.
Sunovion is an indirect, wholly ownedsubsidiary of DSP, a top pharma in Japan with a diverse portfolio ofpharmaceutical, animal health and food and specialty products, and astrong focus on developing products for central nervous system (CNS)disorders. DSP was formed in 2005 from the merger of DainipponPharmaceutical Co. Ltd. and Sumitomo Pharmaceuticals Co. Ltd.
Those large-scale resources and supportare what sets this mid-sized company apart from similarly sizedcompanies, says Bill Yelle, Sunovion's senior vice president ofcorporate development and licensing.
"Where we differ from similarly sizedcompanies in the United States is that we have this strong backingand support outside of this market, as well as a strong focus on CNSdisorders, respiratory conditions and oncology," he says.
Borrowing its company name from acombination of the words "sun" and "innovation," Sunovion'sdrug discovery resume includes the sleep drug Lunesta and theschizophrenia drug Latuda. It also has a strong respiratory focuswith many products already on the market: Zopenex (levalbuterol HCl)Inhalation Solution, Xopenex (levalbuterol tartrate) InhalationAerosol, Brovana (arformoterol tartrate) Inhalation Solution, Omnaris(ciclesonide) Nasal Spray, Zetonna (ciclesonide) Nasal Aerosol andAlvesco (ciclesonide) Nasal Aerosol.
That's where its interests and thoseof Elevation intersect, says Yelle. EP-101 is currently the only LAMAin late-stage development in nebulized form, providing a significantopportunity to address the needs of patients struggling with thecontrol of their COPD using handheld inhalers.
"This acquisition is very much inkeeping with Sunovion's commitment to specialty respiratoryconditions as a therapeutic area," says Yelle. "Elevation'sinternal development capabilities are right in our sweet spot interms of our therapeutic focus. The acquisition was a matter oftiming, as with a number of relationships that develop over time. Westarted having a meaningful dialogue roughly two years ago, and thenlater in earnest as they were releasing additional Phase II data."
EP-101 is a proprietary solutionformulation of glycopyrrolate, delivered by a customized eFlowNebulizer System (originated by and licensed from PARI Pharma GmbH),which was developed to optimize medication delivery and allow ease ofuse. Daily administration of inhaled bronchodilators (including LABAsand long-acting beta agonists) and corticosteroids are the maintherapeutic options for managing the symptoms of COPD. EP-101 wasdesigned for patients who are not well controlled on current standardof care or who prefer a nebulizer, notes Alistair Wheeler, Sunovion'svice president of clinical development and medical affairs.
"Unfortunately for patients withsevere disease and for those unable to use handheld devices, thesedevices sometimes require a level of dexterity that some people arenot able to come with," Wheeler says. "Conventional nebulizersare also noisy, require 10 to 20 minutes to deliver the drug and arebulky and can't be transported easily. This device is almostsilent, completes delivery in two minutes and is very mobile—it canfit into a lunch bag-sized bag. This is a much better and moreefficient delivery system for patients."
Wheeler adds with a laugh, "We liketo think of it as moving from a Ford Model T to a Toyota Prius."
Two Phase II studies have beenconducted, and an additional Phase II study will be conducted thisyear on EP-101 to evaluate its efficacy and safety in patients withmoderate to severe COPD. Phase II trials are expected to initiate inthe second half of 2013, and a commercial launch is expected in 2016.
For now, Sunovion is not releasing anyprojections about how the product may perform, "but we do feel itwill be a very competitive product, and we think it will be a uniqueoffering to a specialty group of patients with few options," saysYelle. According to a recent report from healthcare advisory firmDecision Resources, the global COPD market is expected to hit $13.4billion in 2020.
Founded in January 2008, Elevation hasraised more than $60 million from premier healthcare- andpharmaceutical-focused venture capital investors. The company was notavailable to comment on this story.