Aug 24, 2010
Roche Enters $1.1B Deal With Aileron To Produce New Drugs
BASEL -(Dow Jones)- Roche Holding AG (ROG.VX) Tuesday entered into a partnership deal with U.S.-based biopharmaceutical firm Aileron Therapeutics to produce a novel class of drugs to treat diseases such as inflammation and metabolic ailments, speeding up recent efforts to broaden its R&D pipeline by entering into licensing agreements and acquisitions.
As part of the transaction, closely held Aileron may receive up to $1.1 billion in milestone payments and fees, if Roche and the Massachusetts-based firm succeed in developing drug candidates against five target areas, including oncology, virology, inflammation, metabolism and the central nervous system.
The deal with Aileron should help Roche develop a new class of medicines that are based on the U.S. firm's stapled peptides technology, which allows for a different treatment of diseases and could speed up the development of drugs for illnesses for which there are yet no or ineffective medicines.
Aileron's stapled peptides target the intracellular interactions between proteins. Unlike regular peptides that dissolve when they enter into a cell, Aileron's stapled peptides promise to remain intact and could thus be used to treat diseases more effectively as the peptides can become active within an affected cell, increasing treatment chances.
"Roche is dedicated to advancing innovative therapies, and stapled peptides represent a potentially transformative technology," said Jean-Jacques Garaud, Global Head of Roche Pharma Research and Early Development. "This collaboration with Aileron is a strategically important endeavour for advancing a novel approach to developing new medicines and will accelerate our progress toward our ultimate goal of bringing important new treatments to patients with unmet medical needs."
Analysts said the deal with Aileron should help Roche broaden its R&D base. "Since it's in early stage, this deal is mainly technology related," said Andrew Weiss, analysts at Bank Vontobel. Aileron's research is at a very early phase and it could take more than a decade before the company can hope to launch a drug on the market, analysts said. Investors in Aileron so far included Novartis AG's (NVS) unit Novartis Venture Funds, Lilly Ventures and Apple Tree Partners.
Roche's deal follows on the heels of the Swiss pharma giant's $100 million takeover of U.S.-based diagnostics firm BioImagene and a partnership with International Business Machines Corp. (IBM) to develop a new genome-sequencing technology. In April, Roche bought Israel-based insulin pump maker Medingo Ltd. for $200 million.
The takeovers and licensing deals are part of Roche's efforts to increase its chances to develop and commercialize drugs outside its core cancer franchise. Roche is the world's largest producer of cancer drugs. The bulk of the company's 50 billion Swiss francs in annual sales stems from cancer drugs such as blockbusters Avastin, MabThera and Herceptin.
The drugs will face patent expirations over the next few years, however, and this threatens to hurt Roche's sales and profits.
The company is also under pressure from healthcare regulators and experts, who criticize the company's high drug prices.
On Tuesday, U.K. regulators again rejected the company's drug Avastin to treat bowel cancer on cost effectiveness reasons. Earlier this month, doctors also said that prices for Roche's Herceptin were too high when compared with the drug's medical effectiveness.
The pricing issues were preceded by several drug trial disappointments.
Such developments have weighed on Roche's share price, which has lost more than 20% so far this year. At 1243 GMT the stock was down 0.6%, or CHF0.8, at CHF138.1.
-By Goran Mijuk, Dow Jones Newswires, +41 43 443 80 47; firstname.lastname@example.orgAll news about Aileron Therapeutics