Johnson & Johnson has entered into a deal to help develop a cancer compound discovered by Pharmacyclics in a deal that could be worth close to $1 billion to the latter.
J&J's Janssen Biotech subsidiary will jointly develop and market the drug, known as PCI-32765, which is in a number of Phase I and II studies "across a panel of B-cell malignancy disorders". These include chronic lymphocytic leukaemia, mantle cell lymphoma, and diffuse large B-cell lymphoma.
PCI-32765 is an orally active, small molecule inhibitor of Bruton's tyrosine kinase, which J&J says is an essential element of the B-cell antigen receptor (BCR) signalling pathway. The latter is a critical pathway required for tumour expansion and proliferation.
Under the terms of the deal, Janssen has paid an upfront fee of $150 million, which will be recorded in the fourth quarter, and up to $825 million in development and regulatory milestone payments. The transaction, which will impact J&J's 2011 earnings per share by $0.04-$0.05, will see the firms share profits (and losses) 50/50, plus development costs (Pharmacyclics 40% and Janssen 60%).
William Hait, head of oncology at Janssen, said the agreement with Pharmacyclics "is an opportunity to bring a new form of oral therapy to patients with B-cell malignancies". He added that PCI-32765 is "an innovative compound, with broad applicability and the potential to help a large number of patients".
Pharmacyclics chief executive Bob Duggan said that "over the past 18 months, we have met a number of outstanding individuals and very high quality organisations around the world. In the end, we felt that Janssen was the appropriate strategic fit for us and for PCI-32765".