Four months after ChemoCentryx managed to disappoint investors with its positive read on a mid-stage study of an experimental steroid-replacement drug for rare cases of autoimmune inflammation, the Mountain View, CA-based biotech bounced back after reaping an $85 million windfall in a new licensing pact.
Mountain View, CA-based ChemoCentryx shares ($CCXI) shot up 42% on Tuesday as investors sized up the premium $7.50-per-share price Vifor Pharma paid for a stake in the company. Vifor handed over a $60 million upfront and $25 million for its equity stake, while committing to a package of milestones and royalties as well.
In return Zurich-based Vifor, part of the Galenica Group, landed European commercialization rights for CCX168, a C5a receptor-targeting drug designed to lower or eliminate the use of steroids in treating anti-neutrophil cytoplasmic antibody (ANCA)-associated vasculitis, or AAV. As with a lot of inflammatory conditions, standard of care calls for steroids to shut down the immune system, a process that tamps down on the inflammation while opening the door to substantial health risks as well as the threat of death.
A mid-stage study announced last January underlined a relatively equal response to the drug when compared to standard of care, meeting the primary endpoint. And the company trumpeted its readiness for a Phase III pivotal showdown. But some analysts weren’t convinced, wincing at the small size of the trial--with 67 patients--and seeing some steep odds against success in the late-stage program.
"The small trial size and its design limits the confidence of the late-stage study being successful," Cowen and Co analyst Eric Schmidt noted at the time, according to a Reuters report. The analyst also stated that the drug response was directionally worse in newly treated patients.
Vifor, though, wasn't put off, picking up rights to the drug in Europe, Canada, Mexico, Central and South America and South Korea. The deal also gives Vifor an option on CCX140, ChemoCentryx's oral inhibitor of the chemokine receptor CCR2.
ChemoCentryx has had its ups and downs over the years. In late 2013 GlaxoSmithKline ($GSK) abandoned its partnership on the biotech's lead drug, the Crohn's drug vercirnon, scrapping three late-stage studies after the first Phase III flopped, ChemoCentryx reported that GSK has begged off pursuing a follow-up anti-inflammatory program and returned another drug--CCX354--licensed out four years ago.
Company executives shrugged off GSK's exit, vowing to continue on with programs the pharma giant had washed its hands of.
"The collaboration with ChemoCentryx underlines our increasing attraction as the partner of choice for innovative pharmaceuticals," said Søren Tulstrup, CEO of Vifor Pharma, in a statement. "CCX168 has the potential to address major unmet medical needs of patients in a number of different orphan indications, including AAV. In this field of rare diseases, current treatment options are often limited as well as associated with serious and often fatal side effects. We look forward to working with ChemoCentryx to bring this potentially important new treatment option to patients in Europe and other major markets as quickly as possible."
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