CAMBRIDGE, Mass.—Biogen Idec seems determined to start 2015 on the right foot, announcing in early January the acquisition of biopharmaceutical company Convergence Pharmaceuticals, which brings with it a portfolio of ion channel-modulating product candidates for neuropathic pain.
Per the terms of the agreement, Convergence shareholders will receive an upfront payment of $200 million and are eligible to receive additional payments up to $475 million if future milestones are met. Following the close of the deal, Convergence will continue operating out of Cambridge, U.K., under the leadership of Dr. Simon Tate, chief scientific officer. This deal is subject to customary closing conditions, including expiration of the waiting period under the Hart-Scott-Rodino act, and is expected to close in the first quarter of this year.
“The success of Convergence Pharmaceuticals is due to a combination of world-class science and a dedicated management and scientific team in the U.K.,” Dr. Clive Dix, outgoing CEO at Convergence Pharmaceuticals, commented in a statement about the deal. “We are delighted to have progressed our pipeline to this exciting stage and are extremely pleased that Biogen Idec will now continue the development plan focused on helping patients who are in desperate need of safe and effective chronic pain treatments.”
The main draw for Biogen Idec in this acquisition is Convergence's CNV1014802, a novel state-dependent small-molecule sodium channel blocker that preferentially inhibits the Nav 1.7 ion channel, which is implicated by genetics in human pain conditions. CNV1014802 is thought to work by penetrating the central nervous system and blocking Nav channels in a novel manner, and the compound is currently being developed as a potential treatment for patients with trigeminal neuralgia, a chronic and debilitating form of excruciating episodic facial pain. The U.S. Food and Drug Administration granted CNV1014802 Orphan Drug designation in July 2013.
In June 2014, Convergence released data from a Phase 2 clinical trial of CNV1014802 in TGN patients, noting that the compound was well tolerated and patients demonstrated a consistent reduction of pain severity and number of paroxysms in all primary and secondary outcomes. With regard to the primary endpoint, the study saw a treatment failure rate of 33 percent for CNV1014802 compared to 65 percent for placebo. No serious adverse events were seen related to the drug. In September, the company announced that CNV1014802 had also demonstrated proof of concept in a neuropathic pain study in lumbosacral radiculopathy, which is more commonly known as sciatica. The compound was well tolerated and showed a statistically significant reduction in pain.
Convergence's pipeline includes a number of other candidates as well, including CNV1061436, a Phase 1-ready Nav blocker, and CNV3000223 and CNV3000164, two preclinical Nav 1.7 candidates. Convergence is also advancing CNV2197944 in neuropathic pain, for which it is conducting clinical development activities and certain lead optimization projects on behalf of Calchan Ltd.
“Neuropathic pain is an area of significant unmet need and represents a natural complement to our current neurology portfolio,” Dr. Douglas Williams, executive vice president of research and development at Biogen Idec, noted in a press release. “The team at Convergence has pioneered some of the most innovative science in pain management. We believe their industry-leading talent, capabilities and pipeline of candidates, starting with CNV1014802, will provide a strong foundation upon which to expand our neuropathic pain portfolio.”
According to a 2011 report by the Institute of Medicine, more than 1.5 billion people worldwide suffer from chronic pain to various degrees. Some 3 percent to 4.5 percent of the global population suffers from neuropathic pain, which has an increasing incidence rate. A 2010 report by Global Industry Analysts Inc. estimates that the global pain management market will reach $60 billion by 2015.
Biogen Idec and Convergence aren't the only ones that approve of this transaction; Zacks Equity Research noted on its analyst blog that it is “positive on Biogen’s efforts to expand its portfolio and strengthen its pipeline,” citing this acquisition and the fact that “Biogen signed quite a number of deals in 2014 to expand and develop its early/mid-stage pipeline.”
“We believe Biogen will continue to bolster its pipeline through partnerships and in-licensing deals,” Zacks concluded, adding that Biogen Idec is currently a Zacks Rank #2 (Buy) stock.