Addex is talking deals as interest in a new class of drugs

Early last week, Vincent Mutel was making the rounds at the JP Morgan confab in San Francisco, talking up a newly signed development deal and pursuing talks on new pacts.

“We have a lot of things to discuss,” says Mutel, the CEO of Addex Pharmaceuticals AG. “For me, it’s a nice combination of financial and business discussions.”

For a start-of-the-year conference where the chief topic is money, Addex has got game.

The Geneva-based biotech has just scooped up $22 million in an upfront payment from Merck in a licensing deal for ADX63365 – a positive allosteric modulator of metabotropic glutamate receptor 5 (mGluR5) that the pharma giant will partner on for schizophrenia and other – undisclosed -- central nervous system indications. That deal could earn Addex up to $680 million more in various development milestones, a figure that attracted some admiring comments from the analysts, who were impressed that Merck would be that interested in the program. This was Merck’s second deal with the French biotech. Last December it inked a partnership for a positive allosteric modulator of mGluR4 for Parkinson’s and other CNS conditions.

But Mutel wasn’t that surprised. Merck has been working with allosteric modulators for years and understood that it was gaining a shortcut to a long desired destination.

“Merck scientists were the first to identify the potential for targeting mGluR5 to treat schizophrenia," said Darryle D. Schoepp, Ph.D., senior vice president and franchise head, Neuroscience, at Merck Research Laboratories, at the time the deal was announced.

Says Mutel: “I think what we have been able to bring are compounds that have an advantage compared to the molecules they have been developing. Merck is very, very talented, but we have been working in the field for years. We have moved products for this target with a lot of success and a lot of luck. I think Merck recognized our product has high quality.”

Addex got its jump on Merck, he says, by creating a chemical library with 50,000 molecules all centered around on allosteric modulators. The library is chock-full of drug-like molecules that work effectively against their targets, he adds. And Addex’s chemists have developed valuable expertise in designing drugs with a high level of specificity.

Addex explains that glutamate is much like dopamine and serotonin: a key signaling molecule in the brain which is involved in controlling functions like mood, memory and motor control. “Although marketed antipsychotic drugs modulate specific receptors involved in both the dopaminergic and serotinergic systems, it has been difficult to develop drugs that target specific G protein coupled receptors in the glutamatergic system.” Developing an effective drug in this field would give it first-line treatment potential.

“The hope is that this drug will play a significant role in cognitive impairment,” says Mutel. That’s been the “holy grail,” he adds, “with an enormous unmet medical need.”

Merck’s deal has helped focus a tremendous amount of attention on the company, Mutel agrees, but Johnson & Johnson helped validate Addex’s approach with its pact back in 2004. And more deals are likely in the not too distant future, he says.

“We have additional programs for osteoporosis, diabetes type 2, and inflammation,” says Mutel, a veteran researcher and Roche alum. And other potential partners have the same level of interest in the field as Merck, with the same deep pockets.

It hasn’t been all good news for Addex, which went public last May, five years after its founding. The same day the company was announcing its big Merck deal, Mutel was also explaining that another molecule – ADX10059 – had failed a clinical trial for anticipatory anxiety involving dental surgery. The news of the Merck deal, though, clearly out-shadowed any downside from the negative data.

“It doesn’t mean (the therapy) doesn’t work for chronic anxiety,” says Mutel. But Addex can’t go after a big indication like that without a partner to shoulder the brunt of the expense for some big trials. There’s also potential for GERD -- gastroesophageal reflux disease -- and migraine in a partnership that would wrap all three indications into one deal.

“We’re talking to pharma companies that are large enough, with a diversified portfolio, to find a way in multiple indications,” he says.

“Potentially we will move into different areas,” Mutel sums up. “We’re very active in CNS, going to metabolic disease and inflammation. We want a diversified portfolio. What we are looking for is diabetes, obesity, inflammation, in which allosteric modulators have enormous potential. There are a lot of potential targets waiting to be exploited, offering the same level of return.”