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Celgene shells out $710M for a PhIII Crohn's drug with billions on the line

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As Big Pharma trades billions for whole business units, the deal-inclined Celgene ($CELG) has quietly paid $710 million to get its hands on a late-stage Crohn's disease contender in a deal that could spiral out to 10 figures.

Celgene is handing over $710 million upfront to Ireland's Nogra Pharma to get its hands on GED-0301, an oral antisense drug that targets the messenger RNA Smad7 to treat moderate to severe Crohn's symptoms. Antisense therapies are synthetic copies of nucleic acids designed to treat diseases by shutting down the genes that cause them, usually by binding to mRNA.

Under the agreement, Nogra is in line for up to $815 million more in development milestones and $1.1 billion in sales payouts if the drug ever hits $4 billion in a year, bringing the maximum deal value to about $2.6 billion.

The drug has already made its way through a placebo-controlled Phase II study on 166 Crohn's patients, Celgene said, with data to be unveiled at an upcoming medical meeting. Now the biotech plans to get its new antisense candidate into Phase III by year's end.

"GED-0301 is a potentially transformative therapy that demonstrated striking clinical activity in a phase II trial for Crohn's disease," Celgene Senior Vice President Scott Smith said in a statement. "It strengthens our expanding pipeline of novel therapies intended to address significant unmet medical need in immune-mediated diseases."

Celgene has a well-told penchant for striking up innovative and often byzantine deals with its partners, including lots of back-loaded agreements with risk-sharing clauses. Considering that reputation, the sizable upfront payment involved in the Nogra deal means the Summit, NJ, Big Biotech has considerable faith in 0301's potential. That $710 million figure is Celgene's biggest-ever upfront price tag, Wells Fargo analyst Brian Abrahams said in an investor note, making for a "forceful" move into treatments for inflammation.

The drug joins Celgene's small but promising anti-inflammatory pipeline, led by apremilast, a blockbuster hopeful that picked up its first FDA nod to treat psoriatic arthritis last month with a make-or-break verdict on psoriasis expected by September. The company is also running a Phase II trial on the cancer drug Pomalyst in systemic sclerosis and conducting early-stage work on CC-220 for a variety of inflammatory diseases.

- read the statement

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