Partnership example - PCYC was in early and mid-stage studies when they partnered with Janssen Biotech (JNJ) -
Pharmacyclics Scores Big With Janssen Biotech Deal
Dec 12 2011, 10:13 by: The Burrill Report | includes: JNJ, PCYC
By Marie Daghlian
Janssen Biotech, a unit of Johnson & Johnson (JNJ), is paying Pharmacyclics (PCYC) $150 million upfront for rights to co-develop and market its lead anti-cancer compound PCI-32765. The first-in-class oral Btk inhibitor blocks signaling in a critical pathway needed for tumor growth and proliferation. It is currently in early- and mid-stage studies across a variety of blood cancers, including non-Hodgkin’s lymphoma.
In addition to the upfront payment of $150 million, Sunnyvale, California-based Pharmacyclics will be entitled to receive up to $825 million in development and regulatory milestone payments. The companies have agreed to share development costs for oncology and other indications, excluding inflammation and immune-mediated conditions, with Pharmacyclics paying for 40 percent of the costs and Janssen picking up the rest. The partners will share profits equally in a 50/50 profit-loss agreement. Both companies will book revenue, Pharmacyclics in the United States and Janssen in the rest of the world.
The deal is expected to be slightly dilutive to Johnson & Johnson's 2011 earnings per share on the order of approximately 4 to 5 cents. William Hait, global head of cancer therapeutics for Janssen, said in a statement that PCI-32765 has broad applicability and the partnership is an “opportunity to bring a new form of oral therapy to patients with B-cell malignancies.”
Pharmacyclics has no marketed products. Its first product candidate, an injectable cancer drug, was rejected by U.S. regulators in 2007. Although the deal gives Pharmacyclics a hefty upfront payment, investors were not thrilled by the deal. Several analysts issued downgrades for the company citing its lack of revenues, and a market cap almost equal to the potential deal size.
