Biogen Acquires Early-Stage CNS Drug From Pfizer For $75M
Zacks Investment Research | Jan 13, 2020 09:55PM ET
Biogen Inc. (NASDAQ:BIIB) announced that it has signed an agreement with Pfizer (NYSE:PFE) to acquire the latter’s CNS-penetrant small molecule inhibitor, PF-05251749. The early-stage candidate has exhibited potential as treatment of behavioral and neurological symptoms across various psychiatric and neurological diseases in early-stage studies.
Per the terms of the agreement, Biogen will pay $75 in upfront payment to Pfizer along with potential additional development and commercialization milestone payments of up to $635 million. Pfizer is also eligible to receive tiered royalties in high-single digits to sub-teens. The transaction is expected to be completed in the first quarter of 2020.
Biogen’s shares have declined 11% in the past year compared with the signed collaboration deals with two private biotechs early last year to discover and develop novel treatment options for treating neurological conditions, such as Alzheimer’s disease and Parkinson’s disease.
Biogen has a diversified pipeline with several promising candidates in different stages of clinical development targeting AD and PD.
The company’s aducanumab is a leading candidate for AD. In October last year, Biogen and partner Eisai announced their intention to seek U.S. approval of aducanumab, a few months after it halted two late-stage studies on the same drug, following a futility analysis. Biogen’s decision was based on positive results of a new analysis of larger dataset, which became available after the discontinuation of the studies. The candidate, if approved by the FDA, will become the first medicine to treat Alzheimer’s disease. BAN2401 is another candidate for AD which is currently in late-stage development.
The company is evaluating BIIB054 in a phase II study for treating PD. Important data readouts are expected across clinical programs in multiple sclerosis, epilepsy, Parkinson’s disease and others in 2020.
The drugs presently available just to treat the symptoms of the disease and new treatment options have faced many setbacks and failures. Several large pharma companies, including Biogen, Roche (OTC:RHHBY) , Amgen (NASDAQ:AMGN) , Novartis, Merck, Pfizer, Lilly and AstraZeneca stopped development of their AD candidates in 2019/2018 either due to low possibility of success or safety concerns.
Despite the setbacks, companies continue to invest heavily in developing AD treatments, given the high commercial potential in this market. Success in this area means huge returns. This is because more than 5 million Americans are living with AD with the numbers expected to triple by 2050 (Data: Alzheimer's Association). The market has immense commercial potential and companies coming out with new treatments could rake in billions of dollars in sales.
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