Pfizer continues its deal spree with a $600M option pact to buy AM-Pharma

Continuing a deal spree aimed at beefing up a weak pipeline, Pfizer ($PFE) has agreed to pay $87.5 million for a stake in the Dutch biotech AM-Pharma along with an option to buy the biotech. And there's another $512.5 million on the table should Pfizer exercise its option, with the deal hinging on the biotech's successful completion of a Phase II study of a new treatment for acute kidney injury (AKI) related to sepsis.

Pfizer's interest centers on the biotech's anti-inflammatory recombinant human Alkaline Phosphatase, or reCap, which is angling to become the first approved therapy for sepsis-related AKI.

Last January, AM-Pharma outlined plans for the newly launched Phase II, which calls for a total of 460 patients over two stages. The first group of 290 patients were enrolled with plans to find an ideal dose for treating AKI. The second stage with 170 patients will gauge the drug's impact on kidney function for 7 days as measured by the creatinine clearance rate, a key biomarker for the disease. Investigators will also track the rate of dialysis over 28 days as well as the prevention of chronic kidney disease.

ReCap is being developed as an injectable for AKI and in an oral formulation for ulcerative colitis. And Pfizer execs apparently got a strong enough read from early-stage data to satisfy themselves that this was a treatment worth watching, and possibly owning.

AM-Pharma CEO Erik van den Berg

If the pharma giant moves ahead, a deal to buy AM-Pharma would be a bite-sized acquisition for Pfizer. The giant reportedly fielded a $3.5 billion-plus bid to acquire the Stockholm-based Sobi and its rare-disease pipeline. After failing at a much maligned megamerger with AstraZeneca ($AZN), Pfizer has taken out its legendary checkbook to execute a series of licensing and M&A deals. Several months ago it agreed to pay Merck KGaA $850 million up front with $2 billion in milestones to partner on its clinical-stage program for an anti-PD-L1 program, marking the biggest upfront in industry history. The deal underscored Pfizer's commitment to oncology R&D, which was also boosted by a recent Phase III success for its top drug prospect inotuzumab ozogamicin, which in turn followed an approval for Ibrance.

"This agreement is a significant step for AM-Pharma, and we welcome Pfizer as a shareholder and dedicated partner," says CEO Erik van den Berg. "This deal not only provides good shareholder value, but provides the next step in the development of recAP as a potential treatment for patients with Acute Kidney Injury and other inflammatory diseases."

- here's the release