GSK's signature "cherry-picking" strategy toward licensing, and its use of milestone payments, expose the firm to as little
risk as possible while incentivizing OncoMed to move fast. The biotech plans to file an investigational new drug application
for its lead product, OMP-21M18, and start Phase I trials this year. Even in a best-case scenario, the cancer therapy isn't
likely to make it to market for another eight to 10 years, according to Suvannavejh.
The impressive milestone money reflects the promise of OncoMed's platform. The biotech is developing humanized monoclonal
antibodies targeted to kill cancer stem cells in solid tumors. Many researchers believe that these are not only the most malignant
cells—and most resistant to treatment—but the ones that actually drive tumor growth. A drug able to take out cancer stem cells
could prevent the return of the tumor following first-line therapy. Odds are good that it would also work against a host of
different cancers, including breast, colon, prostate, and lung. And since most solid tumors do recur, it's no exaggeration
to say that such a drug would revolutionize cancer treatment.
At A Glance
"There's no question that stem cells are very sexy right now," Suvannavejh says. "They're kind of a futuristic concept, but
we still haven't seen much success in clinical development." On the other hand, he adds, "humanized monoclonal antibodies
are a good class of compounds, especially for oncology."
If OncoMed achieves proof of concept (Phase IIa), clinical development and commercialization will pass to GSK. The biotech
has the option of upping its royalties on sales by helping to bankroll Phase III.
"It's a shot on goal by GSK," Suvannavejh says. "Every drug giant needs to make many, many shots on goal every year to keep
coming up with winners tomorrow—and in 10 years." –WALTER ARMSTRONG
The mother of all partnering discovery deals." That's the way Simon Moroney, cofounder and CEO of MorphoSys, characterizes
the deal recently struck between his company and Novartis.
The Swiss pharma giant has agreed to pay the German biotech $600 million of committed cash to flow over the next 10 years
(with 50 percent in research support and 50 percent in the form of technology access fees).
MorphoSys will receive another $400 million in milestone payments—an estimate based on what the company realistically thinks
is the likely flow of products through development.
The deal, Moroney says, leaves MorphoSys with enough independence, security, and financial strength to expand its own drug-development
activities. "And, of course, we have the freedom to take those programs that we have originated to other partners," Moroney
said in an interview with
And there's plenty for Novartis in the deal too, according to Marcel Wijma, senior equity analyst at SNS Securities, a Dutch
"Under the agreement, Novartis makes a long-term commitment to MorphoSys' HuCAL technology, which consists of a database of
more than 12 billion fully human antibodies," says Wijma. "With this technology, MorphoSys is able to design fully human antibodies
against several types of diseases via phage display."
Novartis and MorphoSys began their collaboration in May 2004. To date, according to the companies, it has yielded multiple
active therapeutic antibody programs across various diseases, and the first IND-filings came three years after initiation.
Yaghi Maher, Desjardins Securities.
Biologics make up 25 percent of the preclinical pipeline at Novartis and are increasingly a priority in its R&D activities.