UPDATED: AstraZeneca bags another PhIII therapy in $1.15B Pearl buyout

AstraZeneca ($AZN) is moving once again to beef up a weak late-stage drug development effort. Just weeks after bagging a late-stage cardiovascular program, the pharma giant is buying Pearl Therapeutics and its LABA/LAMA COPD therapy in a $1.15 billion deal. The buyout gives AstraZeneca's late-stage development director Briggs Morrison a Phase III respiratory therapy just days after the pharma giant was forced to throw in the towel on the rheumatoid arthritis drug fostamatinib.

Pearl's investors get $560 million down, $450 million in developmental milestones and a $140 million sweetener for sales goals. The Redwood City, CA-based biotech delivers PT003, now in Phase III with a promising COPD therapy that could make AstraZeneca competitive with GlaxoSmithKline ($GSK) and Novartis ($NVS).

Pearl launched its Phase III effort for PT003--a twice-daily fixed dose combination of formoterol fumarate, a long-acting beta-2-agonist (LABA) and glycopyrrolate, a long-acting muscarinic antagonist (LAMA)--just a few weeks ago. The biotech believes that a twice-daily dosing at critical times of the day will prove superior to the once-daily approach taken by the competition. The biotech, which was named a Fierce 15 company in 2011, laid out a plan to wrap up its late-stage work in time for a regulatory filing in mid-2015. Pearl is also working on PT010, a triple-combination product that combines the LAMA and LABA components of PT003 with an inhaled corticosteroid. 

AstraZeneca's new CEO, Pascal Soriot, had initially set out to restructure the struggling company with a global plan focused on early-stage efforts and existing in-house programs. But that left analysts deeply dissatisfied with the company's short-term prospects, which had been dwindling in the wake of repeated clinical trial failures. The buyout announced today combined with a deal a few weeks ago to buy Omthera and its Omega 3 drug Epanova in a $443 million pact may start to satisfy observers hunger for some Phase III excitement.  

Last fall Pearl added $65 million in venture cash from 5AM Ventures, Clarus Ventures and New Leaf Venture Partners participated in a Series D round, which was led by Vatera Healthcare Partners. The biotech had raised a total of $167.5 million over 5 years, but still had to either go public or raise more cash in order to finish the Phase III program for PT003.

So why not try an IPO?

Pearl's investors and management team looked at that as well as potential European pacts, CEO Chuck Bramlage tells FierceBiotech, "and in the end we felt and the owners felt that this was an incredible thing." Over the years "every investor asked me, why aren't you talking to AZ? Your technology should be with AZ. They're very serious about working with us."

They are also serious about keeping the 87 staffers at Pearl operating as a separate division of the company. "They know how fast we've moved and they don't want to disrupt our speed through submission," says Bramlage. The buyout opens the door to getting PT010 into clinical trials in the near term, something the company had held back on as they focused all their resources on PT003.

Not all the analysts were equally pumped, though, considering the crowded COPD field. Berenberg Bank analysts noted that Novartis and GlaxoSmithKline are well ahead in this race, with Boehringer Ingelheim and Forest Laboratories close behind, according to a Reuters report. PT003 could be the fifth to market, and there's some skepticism that a twice daily therapy will have an advantage over easier-to-use once-daily treatments.

"Pearl's novel formulation technology, together with its development products and specialist expertise are a great complement to AstraZeneca's long-established capabilities in respiratory disease, one of our core therapy areas," says Soriot in a statement. "Combined with our on-market portfolio, including Symbicort, and our strong pipeline, the agreement will enable us to offer further distinctive treatment options across the full spectrum of COPD and asthma to patients, physicians and payers."

- here's the press release
- here's the Reuters report

Related Articles:
Pearl Therapeutics drug beats blockbuster COPD drug in PhIIb
Pearl lands $69M Series C for mid-stage COPD program
Pearl Therapeutics finds $15.5M in first VC round

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