Epigenetics, Antibodies & Orphan Therapeutics: Leading Biotech Licensing Trends in 2013

12 Feb

By Danielle Silva, Director of Research, LSN

Licensing agreements in the life science arena are typically collaborative agreements where an owner of a technology or product grants permission to use the technology to a licensee at certain milestones. Due in part to big pharma’s shrinking R&D budgets, the number of licensing agreements has grown over the past several years. Major shifts have also occurred in terms of trends that have emerged in the licensing space in 2012, which will undoubtedly continue throughout 2013 – including the popularity of the epigenetics field, bi-specific antibody technologies, and orphan therapeutics; while single antibody in-licensing interest remains strong.

Epigenetics is becoming a very attractive area for licensing agreements as of late. Epigenetics is the study of inherited changes in cellular phenotype or gene expression. Epigenetics is becoming an increasingly attractive area for private companies, and often time these private companies are acting as the licensors. In 2012, Celgene obtained worldwide rights outside of the US to Epizyme’s preclinical histone methyltransferase inhibitor for the treatment of mixed linage leukemia. Upfront and equity totaled $90 million.

Bi-specific antibody technologies have also become attractive target for in-licensing deals for big pharma. Bi-specific antibodies are those that have specificity for a killing agent or treatment on one arm, and for a target cell on the other.  According to the Life Science Nation licensing database, MacroGenics licensed its DART™ bi-specific antibody technology to Gilead Science at the beginning of 2013.  The antibody technology will be used for drug discovery  directed at four targets, and the upfront deal size was $30 million, with 85 preclinical milestones totaling $1.085 billion, bringing the total deal to over $1.1 billion. Potential milestone payments for bispecific antibodies often vary greatly, which is perhaps due to the different possible indication targets.

Orphan diseases have become another popular target for big pharma companies seeking in-licensing opportunities. In 2012 Aicuris out-licensed worldwide rights to their portfolio of orphan status drugs to Merck. Orphan drugs continue to be an attractive target for both pharmaceutical companies and investors in the biotech therapeutics space due to the accelerated FDA approval process that these drugs targeting these indications are afforded.

Single antibody research alliances continue to be an attractive area of the deal making space as they have for the last decade or so. These types of alliances tend to be established on a worldwide basis. Preclinical antibody deals, however, tend to cover less deals compared to research alliances, and upfront deal sizes for antibody deals tend to be less than or comparable to research alliance deals. Because upfront deal sizes for pre-clinical antibodies are often quite smaller than for antibodies in phase I or II of the clinical development process, however with many investors and pharmaceutical companies investing in earlier stage products, perhaps we will soon see this disparity in upfront payment size diminish; but will undoubtedly never converge. Thus it seems as if these trends in the licensing space that started in 2012 should continue throughout the remainder of 2013.

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