PARIS—Setting it sights on a growing global aging populationlooming on the horizon, French drug maker sanofi-aventis has seized theopportunity to acquire Fovea Pharmaceuticals, a privately-held French researchand development biopharmaceutical company focused on cataracts, glaucoma andother eye diseases.
Fovea announced Oct. 1 that it would sell 100 percent of itsshares to sanofi-aventis for $543 million, which includes an immediate upfrontpayment and subsequent milestone payments related to three key clinicalcompounds. The binding agreement is slated to close before the end of thefourth quarter.
Fovea's three products in clinical development are: FOV1101, an eye-drop, fixed-dose combination of prednisolone and cyclosporine,currently in Phase II trials for the treatment of persistent allergicconjunctivitis; FOV 2302, an intravitreal formulation of a plasma kallikreininhibitor, in Phase I trials for the treatment of retinal vein occlusioninduced macular edema; and FOV 2304, a potent antagonist of bradykinin B1receptors, made active by eye drops, scheduled to enter Phase I trials thismonth for the treatment of diabetic macular edema.
In addition, Fovea has scientific capabilities designedaround a proprietary discovery platform, dedicated to ophthalmology andespecially retinal diseases and several ongoing research and developmentprograms in glaucoma, retinitis pigmentosa and age-related macular degeneration.
"The transaction between Fovea and sanofi-aventis resultsfrom a common vision for the development of the ophthalmology market and theimportance of medical needs," says Bernard Gilly, president and CEO of Fovea.
"sanofi-aventis has decided, after a thorough assessment,that it wants to step into the ophthalmology field and build up from a coreentity that understands the sector, that is very innovative and has deeprelationships with clinicians and patients," Gilly says. "Hence, the decisionto acquire Fovea. On Fovea's side, the problem was to secure the necessaryresources to further advance our products through regulatory approval beyond2011, which was our cash horizon. We had the choice of raising money from asyndicate of growth investors or teaming up with a large pharmaceuticalcompany. Because of the quality of our discussions with sanofi-aventis, wedecided in favor of this transaction."
In fact, sanofi-aventis "has been investigating severaldifferent new fields—and ophthalmology popped up as one of the most promising,"Gilly says. "They went to meet with a fairly large number ofcompanies—including Fovea—and then came back to us in February 2009 for furtherdiscussions. At that time, Fovea already started its discussion with potentialinvestors as well as with other pharma companies."
The interest from sanofi-aventis and other large pharmas"didn't come as a surprise to us," Gilly adds, because the company believes theaging population is particularly attractive for a number of reasons: It hashuge medical needs, with a growing prevalence because of the aging populationand diabetes epidemiology; it presents numerous possibilities for repositioningor reprofiling existing drugs for local use, with favorable consequences interms of lower attrition rate and better tolerability; there is strong demand,and evidence that the market will pay high premium for innovation (e.g.Lucentis); market penetration is exceptionally rapid; and there are still notthat many players (only two specialty pharma and three large companies), Gillynotes.
"sanofi-aventis has communicated that it wants Fovea toremain independent and to continue to be managed as a biotechnology companywith the existing team," Gilly says. "We are not expecting to change our team,only to strengthen it further as we are likely to grow more rapidly."
Christopher A. Viehbacher, CEO of sanofi-aventis, agrees.
"Fovea is in a unique opportunity to lay the foundationstone of an ophthalmology franchise," Viehbacher says. "The acquisition ofFovea will create new strategic positions for sanofi-aventis in the verypromising and dynamically growing ophthalmic area, driven by unmet medicalneeds and aging population."
The acquisition "furthers our strategy of accessinghigh-growth segments of the healthcare market, reducing our risk profile whilefocusing on patient needs," he says.
Jack Cox, a sanofi-aventis spokesman, says, "In addition toour recent collaboration agreement with OxfordBiomedica in ocular diseases, theFovea acquisition represents a unique opportunity to further develop ourpresence in ophthalmology. The ophthalmic pharmaceutical market is veryattractive and will continue to grow in the next years, driven by agingpopulation, unmet needs, expanded delivery options and emerging markets. Theacquisition of Fovea illustrates our strategy to grow and diversify ourbusiness in order to become a global healthcare leader with sustainable growthand a reduced risk-profile."
Fovea will keep its name and facility and continue to employ21 people full-time.
The acquisition of Fovea "is in-line with our strategy togrow and diversify our business," Cox says. "Within the ophthalmologypharmaceutical market, the retinal diseases segment where Fovea is present inR&D is expected to grow more than 13 percent in the coming year. This hasto do with a global aging population."
Fovea also brings to the table strong discoverycapabilities, the strength of which is an integration of its network withvarious international academic institutions, and a close collaboration with theINSERM and CNRS units at the European Vision Institute, Cox says.
"In the short term, we intend to build on the clinicalexpertise and clinical development capability of Fovea, and to benefit from itsactive international network in ophthalmology," Cox says. "With Fovea'sacquisition and our collaboration with Oxford BioMedica, we are clearly movingtowards a more diversified business—and ophthalmology could become one of ourgrowth platforms."
Sanofi-aventis partners with Merrimack Pharmaceuticals onanti-ErbB3 monoclonal antibody
CAMBRIDGE, Mass.—sanofi-aventis also recently announced thatit has signed an exclusive worldwide licensing agreement with MerrimackPharmaceuticals Inc. for the development and co-commercialization of MM-121, afirst-in-class, fully human monoclonal antibody designed to block signaling ofthe ErbB3 receptor. MM-121 is currently in Phase I clinical testing.
Under the terms of the agreement, sanofi-aventis will makean upfront payment of $60 million and will be responsible for all developmentcosts. Merrimack is eligible for an additional $470 million in milestonepayments as well as tiered double-digit royalties on sales of MM-121. Merrimackwill execute the development of MM-121 through Phase II proof-of-concept foreach indication, and sanofi-aventis will be responsible for developmentthereafter. Merrimack retains the right to co-promote the therapy in the UnitedStates.
The ErbB3 receptor is a novel target known to be a keymediator of signaling in the ErbB pathway (also known as the EGFR or HERpathway)—a signaling network that impacts a broad array of cancers. Bytargeting ErbB3, MM-121 is believed to have a broad application across canceras both a monotherapy and in combination with other therapeutics. Research datahas also shown that ErbB3 may also play a central role in resistance to bothtargeted therapies and chemotherapy in a number of tumor types.
Merrimack developed MM-121 after identifying the importanceof ErbB3 through its Network Biology approach, a fully integrated drugdiscovery and development technique that combines biology, engineering, andcomputational modeling to better understand the underlying complexity ofdisease pathways. The information derived from Network Biology informs thestrategic decisions guiding early pharmaceutical discovery as well as helpingto advance candidates through pre-clinical, clinical development and towardscommercialization.
The effectiveness of the license and collaboration issubject to antitrust clearance under the Hart-Scott-Rodino AntitrustImprovements Act and other customary regulatory approvals.