Celgene will partner with Prothena to develop new treatments for neurodegenerative disorders. Including Alzheimer’s disease, through a collaboration that Prothena said could generate for it up to $150 million-plus—but which could yield more than $2 billion for the Irish-based biotech.

The companies’ multiyear R&D collaboration will focus on developing therapies targeting three proteins linked to neurodegenerative diseases.

One is tau, which has been implicated in Alzheimer's disease—an area in which drug developers have long struggled to create successful new treatments—as well as in tauopathies that include progressive supranuclear palsy, frontotemporal dementia (FTD), and chronic traumatic encephalopathy. Prothena said it has identified antibodies targeting novel epitopes on the tau protein that have shown the ability to block misfolded tau from binding to cells and to inhibit cell-to-cell transmission.

The other named protein, TDP-43, has been implicated in amytrophic lateral sclerosis (ALS) and the most common subtype of FTD, behavioral variant FTD, as well as in some forms of Alzheimer’s and other TDP-43 proteinopathies. Prothena said it has also generated antibodies that target multiple epitopes on the TDP-43 protein and is using a proprietary in vitro screening methodology to select those that may be the most effective in inhibiting toxicity and cell-to-cell transmission of misfolded TDP-43 species.

For each development program, Celgene will have an exclusive right to license clinical candidates in the U.S. upon an Investigational New Drug (IND) filing. Should the company exercise that right, it would also have a right to expand the license to global rights at the completion of Phase I. If it does so, Celgene has agreed to fund all further global clinical development and commercialization.

“The programs we have chosen to collaborate on have the potential to provide foundational assets from which we can build new therapeutic approaches to these currently untreatable neurological disorders,” Richard Hargreaves, Ph.D., Celgene corporate VP, neuroscience and imaging, said in a statement.

Added Prothena president and CEO Gene Kinney, Ph.D.: “As we build our pipeline of novel therapies across the neuroscience and orphan disease categories, this collaboration provides Prothena the opportunity to work with a premier scientific partner and the resources and flexibility to advance these programs, while continuing to expand our proprietary discovery activities and further supports our efforts to deliver a diversified pipeline of therapies to alter the course of devastating diseases.”

Celgene has agreed to pay Prothena $100 million upfront and a $50 million equity investment by subscribing to approximately 1.2 million of Prothena’s ordinary shares at $42.57 per share—25.8% above Prothena’s closing stock price yesterday of $33.85—as well as payments tied to exercising options and achieving regulatory and commercial milestones for each licensed program.

According to a regulatory filing, Prothena could gain approximately $80 million per program if Celgene exercises U.S. rights for a collaboration program and exercises a fee of $55 million per program for which Celgene exercises global rights—as well as up to $562.5 million in regulatory and commercial milestones per program, bringing the potential value of the collaboration to $2.093 billion, not counting additional royalties for which Prothena is eligible on net sales of any resulting marketed products.

Expanding Neuro Treatment Franchise

The collaboration with Prothena, announced yesterday after the close of the markets, marks Celgene’s latest move to expand its neurological treatment franchise. Earlier this month, the biotech giant agreed to pay Vividion Therapeutics $101 million upfront, including equity investment, in a multiyear partnership intended to codevelop small molecules against targets for neurodegenerative as well as oncology and inflammatory indications.

Celgene signaled its intent to expand in neurodegeneration last year when it named Dr. Hargreaves to head its neuroscience business.

“We have formed a small internal team that's very expert in neuroscience and the areas that we've been focusing on leveraging our strengths in protein homeostasis,” Rupert Vessey, BM BCh, D.Phil., Celgene EVP and president, research and early development, said January 25 during Celgene’s conference call with analysts following release of fourth-quarter and full-year 2017 results, according to a transcript published by Seeking Alpha.

Dr. Vessey also cited Celgene’s up-to-$295 million-plus partnership with Evotec to develop treatments for neurodegenerative diseases that include ALS, Alzheimer's, and Parkinson's disease. In October 2017, Evotec won a $5 million first milestone payment  from Celgene for completing a screening campaign under the collaboration, which was launched in December 2016. At the time, Celgene said its neuroscience expertise included a dedicated neuroscience drug discovery team with more than 60 full-time equivalent employees.

“Neuroinflammation is a key cause of neurodegenerative disease, and we’re in the process of evaluating approaches for that angle of therapy as well,” Dr. Vessey added.

Neuroinflammation is a therapeutic focus for Celgene, along with cancer and inflammatory diseases. Oncology remains Celgene’s strongest area thanks to its blockbuster multi-indication treatment Revlimid® (lenalidomide), which finished last year with $8.187 billion in sales—number-three among best-selling prescription drug of 2017 as ranked by GEN.

But Revlimid is expected to begin facing generic competition in four years, since Celgene has allowed Natco Pharma to begin selling its version of the drug in the U.S. starting March 2022, under a volume-limited license the companies agreed to in 2015 to settle a patent dispute.

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