Preclinical stage partnering refers to a commercial deal or alliance signed when a compound or product...
Preclinical stage partnering refers to a commercial deal or alliance signed when a compound or product is the subject of preclinical testing.
What is preclinical testing?
New chemical entities (NCEs, also known as new molecular entities or NMEs) are compounds which emerge from the process of drug discovery.
These will have promising activity against a particular biological target thought to be important in disease; however, little will be known about the safety, toxicity, pharmacokinetics and metabolism of this NCE in humans.
It is the function of drug development to assess all of these parameters prior to human clinical trials.
A further major objective of drug development is to make a recommendation of the dose and schedule to be used the first time an NCE is used in a human clinical trial ("first-in-man" [FIM] or First Human Dose [FHD]).
In addition, drug development is required to establish the physicochemical properties of the NCE: its chemical makeup, stability, solubility.
The process by which the chemical is made will be optimized so that from being made at the bench on a milligram scale by a medicinal chemist, it can be manufactured on the kilogram and then on the ton scale.
It will be further examined for its suitability to be made into capsules, tablets, aeresol, intramuscular injectable, subcuteneous injectable, or intravenous formulations.
Together these processes are known in preclinical development as Chemistry, Manufacturing and Control (CMC).
Many aspects of drug development are focused on satisfying the regulatory requirements of drug licensing authorities.
These generally constitute a number of tests designed to determine the major toxicities of a novel compound prior to first use in man.
It is a legal requirement that an assessment of major organ toxicity be performed (effects on the heart and lungs, brain, kidney, liver and digestive system), as well as effects on other parts of the body that might be affected by the drug (e.g. the skin if the new drug is to be delivered through the skin).
While, increasingly, these tests can be made using in vitro methods (e.g. with isolated cells), many tests can only be made by using experimental animals, since it is only in an intact organism that the complex interplay of metabolism and drug exposure on toxicity can be examined.
The information gathered from this pre-clinical testing, as well as information on CMC, and is submitted to regulatory authorities (in the US, to the FDA), as an Investigational New Drug application or IND. If the IND is approved, development moves to the clinical phase.
Preclinical stage partnering
Due to these high costs, many smaller companies need to partner their compound or product in order to obtain the necessary funds and expertise to complete testing required prior to registration and marketing approval.
Preclinical stage partnering deals are often announced once a compound or product has achieved a stage in the development cycle and where the licensor company requires funds and/or expertise from a licensee, often a larger company with expertise and marketed product track record in the therapy area of the compound/product.
For the licensor
There are numerous reasons for the licensor company entering into preclinical stage deals:
- Licensor unable to afford costs of next clinical studies
- Licensor lacks the expertise or capacity to efficiently progress next clinical studies
- Licensor seeking third party expertise to position clinical studies for maximum market opportunity and/or maximum chances of success with viable endpoint
- Need to secure additional revenue streams for existing or new activities, or to reward investors unwilling to wait for commercialization
- Alternative revenue stream to equity, bank or flotation routes when these routes are difficult to access
- Licensor wishing to explore new therapeutic opportunities
- Hedge against risk of clinical failure whereby value of asset may reduce to zero rapidly
- Positioning to maximize market opportunity assuming successful clinical development
- Expand market opportunity into additional territories
- Co-promote to maximize market penetration in shortest possible time
- Allow third party to exploit additional therapeutic opportunities outside core interest
- A previous merger/acquisition has forced asset disposal
- Access to quids in terms of training, marketing experience, products
- Endorsement of product or technology to satisfy investors
For the licensee
There are numerous reasons for the licensee company entering into preclinical stage deals:
- Seeking new drug candidates to bolster existing development pipeline
- Identifying complementary drug candidates to existing product portfolio
- Leverage existing expertise to accelerate promising drug candidates to the market
- Leverage existing territorial expertise to optimize a licensors product opportunity
- Hedge against own pipeline failures
- Protect market position against a potentially threatening new entrant
- Prevent competitor from accessing a product competitive to licensees market position
- Allow rapid entry into new therapeutic areas and territories
- Allow access to technology outside core expertise
- Provide next generation product to existing declining product range
LEO Pharma - 4SC
LEO Pharma has entered into an exclusive research and license agreement with the 4SC Discovery with the primary aim of jointly researching, developing and commercialising an oral treatment for inflammatory skin diseases such as psoriasis.
The deal breakdown:
- LEO Pharma will issue an upfront payment of EUR 1 million to 4SC Discovery
- Additional funding for research and development
- LEO Pharma will receive an exclusive option to license the worldwide marketing and commercialisation rights of the compound for use in inflammatory skin diseases, including psoriasis and other therapeutic areas
- Upon LEO Pharma exercising the option, 4SC Discovery will be eligible for a milestone payment of up to EUR 3 million
- Further payments upon achieving specific development milestones of up to EUR 92 million
- Double-digit royalties
View the full deal at Current Agreements: Research and licensing agreement for oral treatment for inflammatory skin diseases
Heptares Therapeutics - Cubist
Heptares Therapeutics have signed an agreement with Cubist Pharmaceuticals to collaborate on the research and discovery of new medicines targeting G protein-coupled receptors, which are membrane proteins involved in a broad range of biological processes and diseases.
The deal breakdown:
- Cubist will receive exclusive worldwide rights to research, develop and commercialize products generated from the collaboration
- The collaborative research will focus on up to two GPCR drug targets to be selected by Cubist
- For the first target, Heptares will receive $5.5 million (USD) upfront and up to approximately $4 million in research funding plus milestones and royalties
- Cubist also has the option to nominate a second GPCR target at a later point in the collaboration, which Heptares has agreed to work on according to pre-determined financials
- Further terms of the agreement are not disclosed
View the full deal at Current Agreements: Collaborative R&D agreement for medicines targeting GPCRs