Novartis has inked a $520 million-dollar licensing deal with UK biotech Astex Therapeutics, providing further evidence that Big Pharma is having to pay increasingly large sums to in-license drugs, even if they are in early-stage development.
The licensing agreement gives Novartis worldwide licensing rights to Astex' cell cycle inhibitor AT9311, which is in preclinical studies, and an option for a global license for a similar drug, AT7519, which is in Phase I.
Both drugs target cyclin-dependent kinases (CDKs), enzymes that play a key role in controlling cell division, and have potential in the treatment of cancer and other diseases involving cell proliferation.
There is little doubt that R&D productivity in the Industry is in decline. Using the number of new product launched onto the marketplace as a marker, from an industry high of approximately 65 in 1996 the annual crop has been whittled down to under 40. Over the same period, the amount invested into R&D has gone from $18 billion to just under $35 billion in last year. And faced with a decline in the number of new drugs coming through the pipeline, coupled with more stringent demands by regulators for approval, companies have been spending more on their in-licensing deals.
The Novartis/Astex deal is remarkable because of the amount of money involved for a programme still in its infancy. Under the terms of the agreement, Novartis will make an upfront payment and deferred equity payments of $25 million, with the balance of the $520 million made up of fees and equity, option payments and milestones, according to Astex. The UK firm would also receive royalties on sales and kept the option to co-market the products in the USA.
Astex already has R&D collaborations in place with AstraZeneca, Astellas, Sanofi-Aventis, Berlex, Boehringer Ingelheim, Mitsubishi Pharma and Schering AG.
The agreement invites comparison with the $530 million deal signed by Roche for rights to an immunosuppressant in preclinical development at US firm BioCryst Pharmaceuticals. This pact also included a $25 million upfront fee.