On February 15, 2011 The International Cancer Genome Consortium (ICGC) reported the launch of a $20 million Canadian research project that will map the genetic structure of prostate cancer and provide new information that could greatly improve the diagnosis and treatment of the disease (Press release, International Cancer Genome Consortium, FEB 15, 2011, View Source [SID1234571045]). The new project, called The Canadian Prostate Cancer Genome Network (CPC GENE), is one of 36 other currently funded ICGC research projects in 13 jurisdictions around the world.

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CPC GENE aims to crack the prostate cancer genetic code by identifying changes or mutations in the DNA sequences of prostate cancers. Information about mutations in these DNA sequences could be used to better detect tumours, determine tumour aggressiveness and identify the best treatment needed to personalize prostate cancer medicine for individual patients.

Up to $15 million in funding will be provided by Prostate Cancer Canada (PCC) and $5 million from the Ontario Institute for Cancer Research (OICR).

"Prostate Cancer Canada is excited to be leading this important international study which will lead to collaboration and knowledge sharing. From a patient perspective and the 1 in 6 Canadian men who will be diagnosed with prostate cancer in their lifetime, this should result in improved diagnostics and better treatment strategies" said Steve Jones, President & CEO of Prostate Cancer Canada.

"I lost my father at age 63 to prostate cancer and too many of my friends struggle with this illness. Our government is making this investment to hasten the day when we can talk about prostate cancer in the past tense," said Glen Murray, Ontario Minister of Research and Innovation.

"We anticipate that within five years, gene-based diagnoses will help physicians in determining which patients require more intensive therapies and which patients would benefit from careful monitoring, a process called "watchful waiting". It is also expected that some prostate cancer mutations detected by CPC GENE will stimulate the development of new cancer drugs" said Dr. Tom Hudson, President and Scientific Director of OICR. CPC GENE will be led by Dr. Robert Bristow, Senior Scientist at the Ontario Cancer Institute, the research arm of the University Health Network’s Princess Margaret Hospital (PMH) and Genitourinary (GU) Radiation Oncologist at PMH. He said, "We are excited by the possibility to use precise genetic information from our patients to personalize their prostate cancer diagnosis and treatment. This personalized medicine approach will no doubt improve the quality of life for men worldwide diagnosed with the disease."

The highly collaborative project will bring together Canadian researchers working in Vancouver, Calgary, Toronto, Kingston and Montreal. These researchers will also work with international teams based in the United Kingdom, France and Germany.

In Canada, over 25,000 men will be diagnosed with prostate cancer and more than 4,000 will die of it. Side effects from prostate cancer treatment are often serious and long-term. Prostate cancer is currently evaluated by the stage of cancer, PSA blood test, and the Gleason score which is based on how aggressive the cancer cells appear under the microscope. However, these prognostic factors cannot accurately predict the clinical course or treatment required for an individual with prostate cancer. Investigating the genetic causes of the disease could identify the best treatment for each patient based on the unique DNA sequence of their cancer.

As of January 2011, the ICGC has received commitments from funding organizations in Asia, Australia, Europe and North America for research institutes in 13 jurisdictions. So far, funding organizations have committed more than $500 million for 38 projects. Projects that are currently funded are examining tumours affecting the bladder, blood, bone, brain, breast, cervix, colon, head and neck, kidney, liver, lung, oral cavity, ovary, pancreas, prostate, rectum, skin, soft tissues, stomach and uterus. Over time, additional nations and organizations are anticipated to join the ICGC. For more information and updates about ICGC activities, please visit the website at: www.icgc.org.

OICR, a not-for-profit research institute funded by the Government of Ontario, cofounded the International Cancer Genome Consortium. In addition to prostate cancer, OICR is responsible for an ICGC project on pancreatic cancer. OICR hosts the ICGC Secretariat that coordinates ICGC networking activities and the ICGC Data Coordination Centre, which assures that ICGC datasets generated by ICGC members in 13 countries is made available to the worldwide research community, to accelerate research into the causes and control of cancer. These initiatives have received additional support for equipment and operations from the Canada Foundation for Innovation and the Government of Ontario.

On February 15, 2011 Invivoscribe Technologies reported that they have entered into a collaboration agreement with Novartis to develop and commercialize a companion diagnostic test. The test aims to identify FLT3 positive acute myeloid leukemia (AML) patients for specific use in connection with the Novartis development compound, midostaurin (PKC412) (Press release Invivoscribe Technologies, FEB 15, 2011, View Source [SID:1234501208]). Midostaurin, a targeted small molecule inhibitor of FLT3 tyrosine kinase, is currently in Phase III clinical development for newly diagnosed patients with FLT3 mutated AML who are receiving midostaurin or a placebo in combination with chemotherapy (NCT00651261). FLT3 is mutated in approximately one-third of all AML patients and FLT3 mutations are associated with poor prognosis.

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The American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper)(R) and the National Comprehensive Cancer Network(R) recommend testing for the FLT3 mutation in all patients diagnosed with AML — determination of FLT3 mutation status has become a standard of care for patients diagnosed with AML. The Laboratory for Personalized Molecular Medicine (LabPMM(TM)), a subsidiary of Invivoscribe, is currently the only clinical laboratory with an exclusive license to the patents required to generate a FLT3 result that can be used toward regulatory approval of a companion diagnostic.

"Developing an FDA-approved FLT3 companion diagnostic for midostaurin will be a significant milestone for our companies, Invivoscribe and LabPMM," said Dr. Jeffrey E. Miller, founder, chief scientific and chief executive officer of Invivoscribe and LabPMM. "We are delighted to collaborate with one of the world’s leading healthcare companies in a manner that enables us to leverage our expertise in both molecular diagnostic product development and personalized molecular medicine."

Invivoscribe and LabPMM will develop, manufacture and work with the Novartis Molecular Diagnostics (MDx) unit to obtain regulatory approval for the companion diagnostic. Invivoscribe and Novartis MDx will then work together to make the companion diagnostic for treatment of AML available throughout the world.

On February 8, 2011 Lundbeck reported that it has been granted commercial rights to several Cephalon products in Canada and Latin America (Press release , FEB 8, 2011, View Source [SID:1234500347]). As part of the agreement, Lundbeck will register and commercialize several key products which are currently available in the US and/or Europe on behalf of Cephalon. Key products in the agreement include Fentora() (fentanyl buccal tablet) [C-II], Provigil(), Treanda(), Trisenox() (arsenic trioxide) injection, Myocet( )(liposomal- doxorubicin) and Nuvigil().

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Also included in the deal is the leading Cephalon oncology product Treanda() which is to be commercialized by Lundbeck in Canada. Treanda() will add significantly to revenue and earnings in Lundbeck’s Canadian business. The new oncology franchise in Canada will be complemented by Trisenox() and the pain product, Fentora(). Treanda() has proven clinical activity in the treatment of hematological malignancies, including those refractory to conventional anti- cancer agents.

In 2008, the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) recognized Treanda() as one of the major advances in cancer treatment. In 2009, Cephalon realized total revenue of USD 222 million on the product and in the first nine months of 2010 revenue reached USD 285 million in the U.S. Treanda( )is expected to be filed during 2011 in Canada and Lundbeck will establish a dedicated oncology sales organization in Latin America and Canada in order to achieve the full potential of the oncology portfolio.
The financial terms of the agreement have not been disclosed, but Lundbeck is to pay double-digit royalties on sales which will be the main overall revenue stream for Cephalon from these products in these territories.

On February 2, 2011 MDxHealth SA (NYSE Euronext: MDXH), a leading molecular diagnostics company in the field of personalized cancer treatment, reported that it has signed an agreement with Newcastle University (UK), Cancer Research Technology Limited (CRT) and Pfizer Inc. to collaborate on the identification and development of a biomarker predicting response to Pfizer, CRT and Newcastle University’s drug candidate for PARP inhibition, PF-01367338 (Press release, Cancer Research Technology, FEB 2, 2011, View Source [SID1234523327]). The partners believe identification of a successful predictive biomarker could lead to the development of a companion diagnostic to guide treatment decisions in ovarian and breast cancers.

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"MDxHealth’s methylation platform is potentially suited for the development of companion diagnostics in a wide range of cancer indications," said Jan Groen, chief executive officer of MDxHealth. "Our advanced capabilities run from discovery to proof of principle, using deep sequencing at our new Ghent facility, to assay development and clinical trial testing at our ISO-certified Liege laboratories. We offer a platform that has been tried and tested and is highly attractive for our partners. This and similar agreements with other pharmaceutical companies and academic institutions build on our strong capabilities in the exciting and rapidly emerging field of companion diagnostics."

PF-01367338 works by inhibiting PARP1 and PARP2, enzymes involved in cellular DNA damage repair (DDR). As part of the collaboration, MDxHealth will profile the methylation patterns of DDR genes to identify those involved in predicting tumor development and response to PARP inhibition. MDxHealth’s aim is to ultimately set up a high throughput platform that is clinically validated to rapidly test for epigenetic defects in key DDR genes to support the design and implementation of clinical trials to enable development of optimized, targeted therapies.

Financial terms of the agreement were not disclosed. MDxHealth will provide biomarker discovery services, assay development services, clinical trial testing, and will retain rights to any methylation-based commercial companion diagnostic test that may result from this collaboration. Newcastle University, through research groups led by Professor Nicola Curtin and Dr. Richard Edmondson, will participate in biomarker discovery and validation activities. CRT will have rights to develop and commercialise new biomarkers in other fields. Pfizer will contribute experimental and intellectual input through its translational research team in addition to funding the collaboration.

On January 26, 2011 Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) reported it has acquired privately held CyDex Pharmaceuticals, Inc. for a combination of cash and contingent payments (Press release, Ligand, JAN 26, 2011, View Source [SID1234517134]). CyDex, based in Lenexa, Kansas, had 2010 revenue of $16.3 million and EBITDA of $7.6 million, and will operate as a wholly-owned subsidiary of Ligand.

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CyDex shareholders will receive $31.2 million for the merger in upfront cash, a $4.3 million cash payment on the one year anniversary of closing, and will be entitled to contingent cash payments related to certain transactions and pursuant to a revenue share plan. In addition, Ligand paid approximately $800,000 at close for an adjustment for working capital.

"This transformational acquisition accelerates Ligand’s financial growth and provides a unique and broad basket of new assets to further expand our business and long-term potential," said John Higgins, President and Chief Executive Officer of Ligand. "Ligand will now combine the royalties from seven marketed drugs, along with the substantial revenue from the selling of Captisol(R), to advance Ligand toward its goal of turning cash-flow positive with substantial future growth opportunities. This growth will be largely fueled by what Ligand believes is an industry unprecedented portfolio of more than 50 fully-funded partnered development programs, creating a myriad of new revenue stream possibilities."

"CyDex has created a very successful business around the Captisol drug reformulation technology over the last several years and the company has significant growth potential," said Ted Odlaug, former President and Chief Executive Officer of CyDex Pharmaceuticals. "We are very impressed with Ligand’s business model, success in deal making and commitment to continue driving the CyDex business to even greater success. We believe Ligand’s broad licensing network and business acumen, coupled with the opportunity to share in future upside in the business, created an attractive exit for CyDex shareholders."

Acquisition Rationale

The acquisition of CyDex’ cash-flow positive business will accelerate Ligand’s projected financial growth.

— Ligand’s projected 2011 revenue is expected to more than double versus
Ligand’s stand-alone revenue as a result of the transaction, not
including any new licensing revenue (i.e. SARM) or accelerated growth in
Promacta(R) royalties.

Ligand’s asset portfolio (including development stage programs and marketed drugs) will greatly expand to more than 60 programs, significantly increasing the opportunity for new revenue streams over the next few years.

— The existing CyDex portfolio includes numerous high-quality license and
royalty bearing agreements, including Onyx Pharmaceuticals for
carfilzomib and Prism for Nexterone(R).
— Post-merger corporate portfolio is comprised of 7 marketed drugs and
more than 50 fully funded partnered collaborations.

CyDex diversifies Ligand’s business by adding a proprietary and well-validated platform in the increasingly important drug reformulation segment of the pharmaceutical industry.

— Ligand believes that drug reformulation has become an increasingly
valuable solution to the issues related to market erosion due to generic
competition and continued clinical and regulatory uncertainty.

CyDex Brings the Following to Ligand:

Significant Annual Revenue – CyDex currently generates annual revenue from four marketed drugs, material sales from the selling of Captisol, and license and milestone payments.

Onyx Collaboration – CyDex and Onyx Pharmaceuticals entered into a collaboration in 2005 (originally with Proteolix) to develop the Captisol-enabled IV formulation of carfilzomib for refractory multiple myeloma. Onyx has recently reported positive Phase II data for this program and plans to file an NDA in 2011 with the FDA. CyDex is eligible to receive milestones, royalties and Captisol material sales revenue from this program.

Prism Collaboration – Prism Pharmaceuticals recently received marketing approval from the FDA for the Captisol-enabled IV form of amiodarone, to be marketed as Nexterone. Prism plans to launch Nexterone in the near term. Nexterone was developed by CyDex and licensed to Prism in 2007. CyDex is eligible to receive milestones, royalties, and Captisol material sales revenue from this program.

Large Pharma Captisol-Supply Relationships – CyDex currently has multiple material sales collaborations with undisclosed large pharmaceutical companies. These collaborations have Captisol-enabled drugs in clinical development and CyDex anticipates selling Captisol to these partners in the coming years for clinical and commercial use.

Industry Recognized Captisol Technology Brand – Captisol is recognized in the pharmaceutical industry as a powerful answer to the solubility challenges frequently faced by drug-development companies. CyDex’ success is primarily based on solving drug formulation problems, particularly in the area of IV and topical formulations. CyDex has also developed an extensive Drug Master File (DMF) to which its partners can refer when filing with regulatory agencies around the world, adding significant value to the Captisol brand.

Internal Pipeline of Captisol-Enabled Drugs – CyDex is currently developing four proprietary Captisol-enabled drugs for future potential licensing:

— Clopidogrel IV in Phase I for thrombosis
— Melphalan IV in Phase II for stem cell conditioning
— Budesonide/Azelastine nasal in Phase II for seasonal rhinitis
— Topiramate IV in Phase I development for epilepsy

Acquisition Funding

The upfront acquisition payment to CyDex shareholders is comprised of $11.2 million of Ligand’s internal cash and $20 million borrowed on a 42-month secured term loan from Oxford Finance Corporation. Oxford is a specialty lender that has originated loans ranging from $500,000 to $40 million to more than 200 companies. Ligand is also exploring additional financing options for up to a further $10 million in borrowing, for a potential total borrowing of $30 million.

2011 Financial Outlook

For 2011, Ligand expects total revenues to be $22 million to $24 million. The guidance assumes approximately $13 million to $14 million of revenue (partial year accounting) from the CyDex business, and approximately $9 million to $10 million of revenue from the original Ligand business, before any revenue for new licensing agreements.

Ligand’s 2011 operating expenses are expected to be $16 million to $18 million, with an average cost of goods as a percentage of material sales to be approximately 35%. CyDex non-cash amortization expense estimates are expected to be determined in the near-term. If Ligand borrows an additional $10 million during 2011, it anticipates ending 2011 with approximately $20 million of cash. By the end of 2011, Ligand expects its operations to be profitable and cash-flow positive.