Two Big Pharma Alliances End in Nixed Deals. Here’s What Happened.

Xconomy National — 

Pfizer and Merck are each cutting ties with a smaller clinical-stage biotech after experimental drugs being developed under separate alliances fell short in human testing.

Pfizer (NYSE: PFE) is walking away from a partnership with GlycoMimetics (NASDAQ: GLYC) a Rockville, MD-based company developing drugs for diseases where carbohydrates play a role. In 2011, Pfizer paid $22.5 million up front for the rights to license and develop products containing rivipansel, a compound hoped to address inflammation.

The lead therapeutic target for rivipansel was vaso-occlusive crisis, a complication of sickle cell disease in which the abnormally shaped red blood cells obstruct blood vessels. The GlycoMimetics drug was intended to reduce the inflammation thought to contribute to these episodes, which can require hospitalization and treatment with opioids.

The last milestone payment Pfizer paid GlycoMimetics was $20 million in 2015, after the first patient was dosed in a Phase 3 study. But prospects for earning more from the deal were dashed when rivipansel failed in the clinical trial. The partners announced last August that the drug missed the main goal of helping patients get discharged from the hospital sooner. The drug also failed to achieve a secondary goal of reducing the time patients spent on intravenous opioids.

On Monday, Pfizer terminated its licensing agreement for rivipansel, GlycoMimetics disclosed in a securities filing. The Maryland company regains rights to its compound, as well as non-exclusive rights to technologies that Pfizer had developed in connection with the drug. There are no termination penalties associated with Pfizer’s decision, according to the filing. GlycoMimetics is now directing its resoures to other prospects in its pipeline, which include early-stage compounds in development for cancer.

Meanwhile, KalVista Pharmaceuticals (NASDAQ: KALV) has lost Merck as a development partner for its diabetic macular edema (DME) drug candidate, KVD001. Under an agreement signed in 2017, Merck paid its partner $37 million up front for the option to acquire the experimental treatment for DME, a complication of diabetes that can lead to blindness. That option could be exercised after the completion of a Phase 2 study.

In December, KalVista reported Phase 2 results showing its drug did not meet the main goal of beating a sham treatment in improving vision. However, the company also noted that a subgroup of patients had a more robust response to treatment, which it believes warrants more study. Merck opted not to do that research. The agreement giving the pharmaceutical giant the option to license the drug expired Monday, leaving KalVista on its own to further develop the compound.

KalVista may keep the initial $37 million payment from Merck, and it retains all rights to KVD001 and other potential DME compounds covered by the deal. KalVista says it still believes KVD001 has the potential to treat the diabetes complication. But in the nearer term, the Cambridge, MA-based company will focus on a mid-stage compound in testing as a treatment for hereditary angioedema (HAE), a rare inherited disorder that leads to swelling attacks affecting the limbs, face, airway, and intestines.

The KalVista HAE drug, KVD900, is intended to treat acute HAE attacks. Phase 2 data are expected in the second quarter of this year. A second HAE compound, KVD824, is being developed to prevent HAE attacks. That drug is being prepared for a Phase 2 test expected to start in the second half of the year.

SVB Leerink analyst Dae Gon Ha sees the HAE drugs as the best near-term opportunity for KalVista. To date, KVD900 has been shown to be safe and the upcoming data could also bolster its efficacy compared to a BioCryst Pharmaceuticals (NASDAQ: BCRX) HAE drug that has been submitted for FDA review, Ha says in a research note. Strong data could make the KalVista drug attractive to pharmaceutical companies.

If KalVista resumes its DME work, it won’t be anytime soon, Ha says. Though executives reiterated to SVB Leerink that there are some parts of the KVD001 data that warrant further investigation, Ha sees KalVista as unlikely to pursue DME prospects until the company’s HAE compounds have made more progress and the company has more capital. As of Oct. 31, KalVirsta had $21.7 million in cash, according to its third quarter 2019 report.

Image: iStock/ChesiireCat