Biotech Values

[DewDiligence]

Astellas, CoMentis Ink $760M Alzheimer's Deal

[CoMentis was formerly called Athenagen (#msg-17224684).]

http://www.reuters.com/article/marketsNews/idINL2553295420080425

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Fri Apr 25, 2008 4:11am EDT
By Edwina Gibbs and Ben Hirschler

TOKYO/LONDON, April 25 (Reuters) - Japan's Astellas Pharma Inc said on Friday it had struck a deal worth up to $760 million to jointly develop Alzheimer's drugs with privately owned U.S. biotech firm CoMentis Inc.

The deal is the latest example of drug companies putting big bets on new Alzheimer's treatments. It also underlines growing Japanese pharmaceutical interest in U.S. biotechnology.

Astellas will pay CoMentis $80 million upfront and make an equity investment of $20 million in the company to secure rights to its experimental beta-secretase inhibitor drugs.

CoMentis could also receive up to $660 million in development milestones, depending on the progress of clinical tests, and will share some of the profits from any successful products.

Astellas senior corporate executive Hirofumi Onosaka said the deal would help drive the establishment of the group's business in central nervous system (CNS) medicine.

The South San Francisco-based company has a leading position in developing beta-secretase inhibitors for Alzheimer's and recently reported promising results from a Phase I trial in healthy volunteers with its leading drug candidate CTS-21166.

Beta-secretase is an enzyme responsible for the build-up of sticky deposits, or plaques, in the brain. The formation of these amyloid plaques is thought to play a key role in the development of Alzheimer's disease.

Alzheimer's is a hot area for pharmaceutical research, since the incidence of the degenerative brain disease is rising rapidly as people live longer. But developing effective treatments has proved notoriously difficult.

Existing drugs such as Aricept from Pfizer (PFE) and Eisai, Exelon by Novartis (NVS) and Razadyne or Reminyl from Johnson & Johnson (JNJ) and Shire (SHP.L) can ease symptoms but do not stop the disease.

One new drug that could make a real difference is an experimental antibody-based treatment called bapineuzumab from Wyeth (WYE) and Elan (ELN), which is now in final Phase III clinical tests.

The World Health Organisation estimates there are about 18 million people worldwide with Alzheimer's disease and this figure is projected to reach 34 million by 2025.

The Astellas-CoMentis alliance follows the outright acquisition of another U.S. biotech company, Agensys, by the Japanese drugmaker for $387 million last November.

Earlier this month, rival Takeda Pharmaceutical Co Ltd agreed to buy Millennium Pharmaceuticals Inc (MLNM) for $8.8 billion in the biggest ever overseas acquisition by a Japanese drugs company.
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