Transfer of Cardiome rights from Astellas to Merck

I was pleased to help Cardiome with its consent to the assignment by Astellas to Merck of Astellas' interest in Cardiome's vernakalant program.

On July 26, 2011, Cardiome announced that it consented to the transfer of rights for the development and commercialization of vernakalant (IV) in Canada, Mexico and the United States, from Astellas to Merck.

The Astellas Cardiome agreement provided that the Agreement could not be assigned "without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed."

All terms, responsibilities and payments that Astellas committed to under the original collaboration and license agreement are now assumed by Merck without change.

Pluristem Reaches Licensing Pact With United Therapeutics - WSJ.com

Pluristem Reaches Licensing Pact With United Therapeutics from WSJ.com: This morning Pluristem and United Therapeutics entered into an exclusive licensing agreement. United Therapeutics will commercialize the Israel-based company's treatment for pulmonary hypertension, and Pluristem willl receive milestones of up to $55 million plus royalties.

I was fortunate to act for United Therapeutics on this transaction. The eleven hour time difference between Haifa and Vancouver probably aided negotiations, since no one wanted to be on the phone for too long...

Deal making and risk mitigation

I will be the keynote speaker at the Canadian Healthcare Licensing Association's Summer Meeting 2010, on June 9-11, 2010, which is billing itself this way (from the registration form):

"An ounce of prevention is worth a pound of cure; How to successfully mitigate risks in deal making."

Deal making involves risks: risk of financial failure, risk of product failure, risk that the company’s investment won’t be returned. The focus of the summer meeting is learning ways to mitigate the risks we encounter on a daily basis. Led by James Hatton, a commercial solicitor with more than 20 years experience focusing on licensing and related transactions, the summer meeting will tackle significant risks including:
• What happens when a licensee acquires a competing product or restructuring de-emphasizes their focus on your product?
• How do you manage performance expectations and ensure/define “reasonable” efforts?
• How do you avoid litigation when everything is going wrong?
• What are the effects of termination, under what circumstances is it best to terminate?

This meeting is a must for all those involved in healthcare licensing." [emphasis added] :-)

I forgive anyone in advance who doesn't consider hearing me exactly a must. I will post the guts of my thoughts on the subject here over the next two weeks.

MedGenesis Announces GDNF Licenses and Collaboration with Amgen and Biovail

On January 12, 2010, MedGenesis Therapeutix Inc. announced that it had entered into a collaboration with Biovail Corp. on developing glial cell line-derived neurotrophic factor (GDNF) protein to treat Parkinson's disease. Concurrently, MGT and BLS licensed from Amgen Inc. the rights to GDNF in CNS and non-CNS indications.

MedGenesis and Biovail will initially focus on the development of GDNF for Parkinson's disease, a progressive and debilitating neurological disease affecting close to 5 million patients worldwide.

GDNF is a naturally-occurring growth factor capable of protecting and promoting the survival of the dopamine producing nerve cells that are attacked in Parkinson's.

I acted for MGT in respect of the Biovail collaboration and the Amgen licenses, as well as certain other strategic relationships.

What the press releases for any life sciences collaboration don't explain, and what is so easy to lose sight of in the course of any negotiation, is the human element of why we do what we do.

GDNF has a history (see below). It has worked for some people in the past, but failed in clinical trials. If you watch the two short videos below, you can't help but be moved by seeing Parkinson's patients treated with GDNF put away their canes and walk.

It takes so many people for a new treatment to succeed. My role in this things is to be there at the birth of the collaboration - I don't get to see how the baby grows up. But I am fervently hoping this one develops well.

Congratulations to Amgen for putting GDNF back out there. And godspeed to MGT and BLS in making GDNF a success.

United Therapeutics & Lilly is an LES Deals of Distinction Award winner

On October 21, 2009, the Licensing Executives Society (USA & Canada), Inc. presented its Deals of Distinction Awards to winners in five industry sectors. The 2009 LES Deals of Distinction Award Winner in the Health Care Sector was the Eli Lilly and United Therapeutics transaction.

I was proud to have acted for United Therapeutics on this. I am sorry to report that the award did not come with a large plaque or anything.

In November, 2008, Eli Lilly and Company and United Therapeutics Corporation entered into a license and a supply agreement related to the U.S. commercialization rights for the pulmonary arterial hypertension indication of Lilly`s molecule, tadalafil. United Therapeutics made an upfront payment of $150 million to Lilly for the exclusive rights to commercialize tadalafil for PAH in the United States, as well as for a product manufacturing and supply arrangement. Lilly purchased $150 million of United Therapeutics common stock. The transaction will greatly enhance the ability to provide this medicine as a new therapeutic option for patients of this very serious disease.

"This deal is a clear demonstration of the power of courage and creativity in licensing," said Mark Nawacki, chair of the LES Life Sciences Sector.

"Historically, large pharma has been very cautious in partnering deals for new indications on major strategic brands such as tadalafil (marketed as Cialis by Lilly). This is an inspired transaction because the financial deal structure mitigates such concerns while the equity purchase component enables a solution in the worst capital market we have seen in a generation."

Website gives lawyers leg up on big pharma

This week Business in Vancouver newspaper (website) published some coverage on my collection of licenses and related agreements, as a follow up to the Cardiome Merck transaction. Please see the pdf here: Website gives lawyers leg up on big pharma.

A little education on licensing...

A friend of a friend is an inventor who has someone who wants to partner/buy the inventor's invention.

The inventor wants to know how to find examples of contracts so he can educate himself on the issues that must be addressed.

Reading the full text of the agreements is no way for an inventor to educate himself!

I have a cache online of checklists, papers, presentations, guidelines and the like on licensing. Though much of it is life-sciences-centric, the issues apply pretty much across the board, with things like the warranties, allocation of risk &c. varying somewhat, depending on the industry.

"Full text" of publicly disclosed agreements

Here is the (redacted) full text of more than 800 licensing and related agreements that I have collected.

These agreements have been disclosed by publicly traded companies in the US on the edgar website. I have posted links to the agreements to the delicious.com social bookmarking site as I come across them.

Check the tags in the column on the right hand side of the page. If you are interested in a particular type of agreement (for example, university/industry licenses or co-promotion agreements) or a particular contracting party (for example, Lilly or Merck), just click on the tag, and you will get a collection of publicly disclosed agreements.

I hope there is something there that interests you.

Cardiome hits home run

The National Post covered the Cardiome Merck alliance on April 15, 2009. Please see the pdf here: Cardiome hits home run, which includes a nicely captioned picture.

Merck and Cardiome Sign License Agreement for Vernakalant

Merck & Co., Inc. and Cardiome Sign License Agreement for Vernakalant, an Investigational Drug for Treatment of Atrial Fibrillation

I have been doing Cardiome's alliances since their first one with Astrazeneca in 2000, culminating yesterday in a fantastic deal for Cardiome and the industry:

WHITEHOUSE STATION, N.J. and VANCOUVER, CANADA, April 8, 2009 — Merck & Co., Inc. and Cardiome Pharma Corp. (NASDAQ: CRME / TSX: COM) today announced a collaboration and license agreement for the development and commercialization of vernakalant, an investigational candidate for the treatment of atrial fibrillation. The agreement provides Merck with exclusive global rights to the oral formulation of vernakalant (vernakalant [oral]) for the maintenance of normal heart rhythm in patients with atrial fibrillation, and provides a Merck affiliate, Merck Sharp & Dohme (Switzerland) GmbH, with exclusive rights outside of the United States, Canada and Mexico to the intravenous (IV) formulation of vernakalant (vernakalant [IV]) for rapid conversion of acute atrial fibrillation to normal heart rhythm...

Under terms of the agreement, Merck will pay Cardiome an initial fee of US$60 million. In addition, Cardiome is eligible to receive up to US$200 million in payments based on achievement of certain milestones associated with the development and approval of vernakalant products (including a total of US$35 million for initiation of a planned Phase III program for vernakalant [oral] and submission for regulatory approval in Europe of vernakalant [IV]), and up to US$100 million for milestones associated with approvals in other subsequent indications of both the intravenous and oral formulations. Also, Cardiome will receive tiered royalty payments on sales of any approved products and has the potential to receive up to US$340 million in milestone payments based on achievement of significant sales thresholds.

Cardiome has retained an option to co-promote vernakalant (oral) with Merck through a hospital-based sales force in the United States. Merck will be responsible for all future costs associated with the development, manufacturing and commercialization of these candidates. Merck has granted Cardiome a secured, interest-bearing credit facility of up to US$100 million that Cardiome may access in tranches over several years commencing in 2010.

The most important alliances of 2008 per Recap.com

I am collecting the most important alliances of 2008 from a few reliable sources.

First, from the Recap.com | Allicense 2008 - Ballot Page: The "Breakthrough alliance" winner was

Bristol-Myers Squibb/Adnexus

The nominees were (links are to the full text of the agreements):

Companies	Date	Deal
Bristol-Myers Squibb/Adnexus	2/07	Discovery and Development of Adnectin-Based Therapeutics in Oncology
Merck/Ariad Pharmaceuticals	7/07	Defrolimus mTOR Inhibitor for Treatment of Cancer
Ortho-McNeil/ISIS Pharmaceuticals	9/07	Antisense Drugs to Treat Metabolic Diseases
Roche/Alnylam Pharmaceuticals	7/07	Discovery and Development of RNAi Therapeutics
Sanofi-Aventis/Regeneron Pharmaceuticals	11/07	Co-Development of Fully-Human Therapeutic Antibodies

Day4 Energy Completes Outsourcing Agreement with Jabil

Ron Chin, Chelsea Thompson and I assisted Day4 Energy Inc. (TSX: DFE), a solar electric technology developer and manufacturer of superior performance solar modules, outsource some manufacturing capacity under a long term Manufacturing and Supply Agreement with Jabil Circuit Inc., a leading global electronic solutions company, effective December 23, 2008.

Vancouver Sun coverage of my role in the United Therapeutics Lilly deal

The article Vancouver lawyer in the game with pharmaceutical giants is no longer visible on the Vancouver Sun website, so the preceding link is to a pdf.

James Hatton is working on a deal that would allow a U.S. company to test erectile dysfunction drug Cialis on heart patients By Gillian Shaw on December 19, 2008.

Of the many comments I received after the article was published, my favourite was:
"Vancouver lawyer in the game with Cialis" :-)

Lilly and United Therapeutics License and Supply Agreements

I met the United Therapeutics folks last year when they almost did a deal with a local client of mine. They retained me to act when they got a chance to in-license tadalafil from Lilly:

"Eli Lilly and and United Therapeutics have entered into a license and a supply agreement related to the U.S. commercialization rights for the pulmonary arterial hypertension (PAH) indication of Lilly’s molecule, tadalafil.

Under the terms of the agreements, United Therapeutics will make an upfront payment of $150 million to Lilly for the exclusive rights to commercialize tadalafil for PAH in the United States, as well as for a product manufacturing and supply arrangement. In addition, Lilly will purchase $150 million of common stock from United Therapeutics."

Tadalafil lowers pulmonary arterial pressure and pulmonary vascular resistance – a good thing in pulmonary hypertension – but it also has other uses. Tadalafil is also the active ingredient in Cialis (in case you don’t know, a well-advertised drug for the treatment of erectile dysfunction). It has a recreational use, and soon also a life-saving use.

"Material use" of clinical data

The defined term occurs only once in the Archemix Merck Collaborative Research and License Agreement of January 17, 2007 as disclosed. But you have to wonder how the agreement uses the term. A royalty back on use outside the field or after termination perhaps?

'“Material Use”: means, with respect to Clinical Data, the inclusion of such Clinical Data in a core report of an NDA filed by ARCHEMIX as evidenced by (i) the use of a bridging study to utilize such Clinical Data, (ii) the elimination for the need to duplicate such Clinical Data, or (iii) the ability to reduce the number of patients enrolled in a clinical trial due to the use of such Clinical Data.'

Spin-outs from big pharma: some background reading

- Big Pharma Looks to Out-Licensing to Grow Revenue

- The New Out-Licensing Start-ups: Securing Product Supply

- Spin-Outs Offer Biotech Creative Financing Option

- Giving your spinout the right spin

- Achieving venture returns through corporate spinouts

- The Top Five Drivers of a Successful Out-licensing Process

- Ten Tips to Out-Licensing Using the Carrot Instead of the Stick

Sweet Science

The August 2008 edition of BC Business magazine contains an article about the health of the local biotech industry. I am in the magazine for a different reason (just in case this law thing doesn't work out).

See the .pdf here.

Making a great deal: ingredients for success

Here are my slides from Making a great deal: ingredients for success (pdf), presented at BioPartnering North America held on February 4, 2008.

The Checklist

Annals of Medicine: The Checklist: Reporting & Essays: The New Yorker: If something so simple can transform intensive care, what else can it do? by Atul Gawande"

New Trends in Biotech - Pharma Alliance Agreements at the LES Annual Meeting in Vancouver

The New Deal: Competing in a Global Economy

Licensing Executives Society

October 14-18, 2007
Pan Pacific Hotel and Fairmont Waterfront Hotel
Vancouver, Canada

Wednesday, 2:00 p.m. - 3:15 p.m.

5-E NEW TRENDS IN BIOTECH - PHARMA ALLIANCE AGREEMENTS
Intermediate/Advanced
Market pressures are driving biotechs and pharmas to stretch the bounds of traditional licenses in their strategic alliances. The creative approaches these companies have brought to bear can be extracted from publicly filed alliance agreements. Alliance partners seeking to maximise value for themselves and each other are extending the traditional structure of the alliance. Some examples: Alliances are allowing maturing biotechs to retain more of the value of the opportunity by bearing more of the expense and risk of development. More alliances are arising early in the development process. In order to maximise each party’s flexibility, alliances are structured to give each party multiple opportunities to opt in or opt out of development and commercialisation. Biotechs are retaining more rights, including co-promotion rights, and obtaining other quids to help grow their businesses as part of these collaborations. All trends discussed will be detailed with multiple examples.
James Hatton, Partner, Farris, Vaughan, Wills & Murphy LLP