The Abbott Park, Ill.-based healthcare conglomerate has struck a deal to acquire a midstage compound for kidney disease from privately owned Denmark biotech Action Pharma A/S for $110 million.
Abbott is acquiring AP214, a compound in Phase 2b development to treat acute kidney injury, or AKI, associated with major cardiac surgery. Action, which first in-licensed the compound from Zealand Pharma A/S in 2003, announced positive Phase 2b data on the drug in September, and will conduct another Phase 2b study later this year.
AKI is a rapid loss of kidney function that occurs due to a variety of factors, such as when a different condition slows the blood flow to the kidneys. It is most common in patients that have been hospitalized. Abbott said there are no drugs on the market that treat AKI associated with major cardiac surgery, giving AP214 the chance to be the first approved remedy to potentially treat the disorder.
Through the deal, Abbott will take home the rights to develop and commercialize AP214 for the prevention of AKI and other relevant indications. Abbott will make the cash payment and be responsible for funding all future development and commercialization responsibilities but, uniquely, won't pay any further milestones or royalties to Action. Abbott has also amended the licensing deal Action originally signed with Zealand in favor of a new, revised agreement, through which Zealand will receive a one-time $11 million payment and low single-digit royalties on future sales of AP214.
Abbott is using the compound not only to add to the stock of development-stage compounds in its pharmaceutical unit, which will be spun out later this year into an entity named AbbVie but also supplement the two other drugs targeting renal disorders it is already developing: a chronic kidney disease drug (bardoxolone) being co-developed with Reata Pharmaceuticals Inc., and an in-house compound (atrasentan) for diabetic kidney disease.
In addition, Abbott is using an acquisition approach common to many pharma companies looking to supplement their pipelines, snapping up early-stage or midstage compounds one at a time.
"You're seeing the asset-centric focus of pharma coming to play in this deal," said Dechert LLP's Kristopher Brown, who represented Zealand Pharma in the transaction.
Abbott made a similar move on a much larger scale in February when it agreed to pay $150 million upfront and as much as $1.35 billion total to Galapagos NV for the rights to a midstage compound for rheumatoid arthritis. It has also supplemented its pipeline through additional partnerships over the past few years, forging deals with Reata, Biogen Idec Inc. (daclizumab for multiple sclerosis) and Bristol-Myers Squibb Co. with its MS drug elotuzumab.
Action, meanwhile, it backed by a number of European investment groups including Sunstone Capital, Global Life Science Ventures, SLS Invest AB, InnovationsKapital, Incuba Venture and Ostjysk Innovation. Sunstone is both Action and Zealand's largest shareholder. AP214 is Action's main asset, though it also has an early-stage compound under development for the treatment of inflammatory skin diseases.
Zealand Pharma is a publicly traded biotech based in Copenhagen with a pipeline of drugs targeting Type 2 diabetes, chemotherapy-induced diarrhea and other disorders.
Lawrence Wittenberg and Mulon Luo of Goodwin Procter LLP were Action's legal counsel, while Jonathan Gertler and Vasilios Kofitsas of Back Bay Life Science Advisors were the seller's financial advisers.
Denis Segota and Kevin Grant of Morgan, Lewis & Bockius LLP provided Abbott with legal advice.
Brown, Jonathan A. Schur and Thomas A. Rayski of Dechert advised Zealand.
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