Privately held Portola had planned to follow tradition and wait for Phase IIb data before partnering its anti-thrombotic elinogrel, but Novartis offered a deal the biotech couldn't refuse - or didn't refuse, despite the possibility that the arrangement may somewhat restrict a merger or acquisition exit for Portola's investors down the road.

It all happens after Sanofi-Aventis, facing the loss of patent protection for its high-selling clot preventer Plavix as well as the anticoagulant Lovenox (enoxaparin) in 2012, seems to have passed on a chance to buy not only Portola's elinogrel (which could have followed up Plavix) but possibly betrixiban (which could have followed up Lovenox).

And Portola's glad to have Novartis, which enters the anti-thrombotics fray with this deal. "We'll bear some of the [remaining] Phase II costs, but Novartis will pay the majority," plus all of Phase III costs, said William Lis, Portola's vice president of business and commercial development.

He called the deal, which brings Portola $75 million upfront, "fairly balanced" between front and back end milestone payments. The 800-patient Phase II trial just started in December.

In addition to the $75 million upfront, Novartis has also agreed to pay another $500 million in milestone payments, including $75 million more when the compound enters Phase III trials (probably in the middle of next year), plus royalties on worldwide sales.

Portola is testing the oral and intravenous forms of elinogrel in a broad group of patients undergoing non-urgent percutaneous coronary intervention. Portola, with Novartis, plans to further develop the compound for patients with acute coronary syndromes and broadly in patients with a prior heart attack or stroke, as well as those with peripheral vascular disease.

The two companies hope elinogrel, a direct-acting, reversible P2Y12 ADP receptor antagonist that would compete with Lilly/Daiichi Sankyo's prasugrel, will prove better than standard of care, non-reversible Plavix (clopidogrel), which sold about $7.8 billion last year for Sanofi and Bristol Myers-Squibb, but carries the risk of bleeding.

Plavix faces generic competition in 2012, but Portola expects the anti-thrombosis market to reach $15 billion by 2020. Sanofi is up against the wall, with the impending loss of protection for Plavix after FDA's thumbs-down last year on the diet pill Acomplia (¹ Also see "Sanofi CEO Debuts With Sobering News" - Pink Sheet, 11 February, 2009.).

According to a source among Portola's investors, Sanofi - with a total of $10 billion in sales endangered by patent-loss in 2012, between Plavix and Lovenox - had an ideal opportunity to grab not just elinogrel but the rest of Portola's pipeline, including another anti-clotting agent, betrixiban, an oral Factor Xa inhibitor in Phase IIb trials (² Also see "Portola Anticipates “Best In Class” Status For Novel Phase II Anticoagulant" - Pink Sheet, 5 November, 2008.). "They could have bought the whole thing for a reasonable price," the source said. A couple of other players are said to be sniffing around betrixiban, with partnering news likely later this year, or maybe something bigger.

Plavix's biggest drawback is a two-stage process of metabolism through the liver, and "it's very slow to get up to therapeutic levels," noted Portola's Lis. Up to 40 percent of patients don't respond at all, since they lack the polymorphism needed to make the drug work. "Onset [of elinogrel] should be faster and we believe we should not have the same problem with non-responders," Lis added, though this has yet to be proven.

Investors apparently are convinced. Portola has raised $218 million in equity through several rounds, most recently $60 million last summer. There was also a $20 million debt placement, down to $15 million now. So the South San Francisco, Calif.-based biotech was on firm footing as it entered talks with Novartis, and now has enough to last another 24 months.

Takeout still possible, Novartis or not

With the chances of an initial public offering slim to nil, especially in the current market, some Portola backers might raise their brows at the Novartis deal, as it complicates an exit by way of merger or acquisition.

"It's an interesting question," said Marci C. Dier, Portola's chief financial officer, pointing out that Portola has two plays in thrombosis, a very large therapeutic space. "Partnering one compound doesn't reduce our optionality, in terms of exit," she said. The Novartis tie-up or something like it almost had to happen "because of the development dollars that need to go into these programs," Dier said.

"It really comes down to Phase III development costs, and the risks," she said. Phase III trials in thrombosis can involve 20,000 to 30,000 patients. Bottom line for Dier: The still-growing anti-thrombotics space is so lucrative that a takeout is not beyond the pale. If hungry enough - or desperate enough - a big pharma player could, after all, buy Portola and pay off Novartis for elinogrel rights.

Portola was formed as a spinout in 2003 from Millennium, which was bought by Takeda last year (³ Also see "Takeda Reaffirms Oncology Goals With $8.8 Billion Millennium Acquisition" - Pink Sheet, 10 April, 2008.). Dier said Portola is obligated to pay some sales royalties to Millennium, but they are "minimal at this point, low single digit."

For his part, the Portola investor was "not disappointed there wasn't a merger or acquisition" this time around. "If I were not a believer in the compounds, then I totally would like to be taken out - give me [the money] now and I'm done. But there are only six or seven blockbusters out there in anybody's pipeline, and I really believe this is one of them."

Of course, Novartis itself could take all of Portola, though Novartis, like other big pharmas, is facing profit/loss pressures. "Somebody could have just bought [Portola], but it was the burn" that turned them off, said the source, who believes that some of the would-be buyers have overestimated the costs of developing Portola's candidates.

Deals designed to put oomph behind costly anti-thrombotics efforts while sharing risk include the Phase II pact signed by Bayer and Johnson & Johnson in 2005 around Xarelto (rivaroxaban, BAY 59-7939), which is also a Factor Xa inhibitor (⁴ Also see "Bayer Moves Anti-Thrombotic Into Phase III For Two Indications" - Pink Sheet, 13 June, 2006.).

That compound is approved in Canada and Europe but still pending at FDA, with an advisory panel meeting slated for March 19. Pfizer and BMS also have a risk-sharing collaboration around apixaban, in the same class as Xarelto (⁵ Also see "Bristol And Pfizer Team Up To Develop Anticoagulant Apixaban In $1 Billion Deal" - Pink Sheet, 26 April, 2007.).

Farah Champsi, with Alta Partners, another Portola investor, would not comment on what Sanofi did or chose not to do, but said elinogrel was "viewed as a very attractive asset by a number of companies." The form an exit takes "all depends on what happens in the market in the next 12 to 24 months, she added. "We're building a very strong company, with multiple attractive programs in thrombosis. When the time is right, we'll consider all our options for an exit."

Novartis' involvement, Champsi said, does not hamstring Portola with regard to M&A, and the deal "does leave us some upside, since we have a co-promote option and some good back-end economics." That option, in the U.S., is limited to hospitals and specialty markets.

Coming up with a good clot fighter, and figuring out in which stage of a medical event to use it most wisely, has led some in the research field to adopt the term "acute coronary confusion." This is especially so in the case of Plavix, with its known drawbacks and possibility of non-response, but pertains across the whole therapeutic zone.

"Prasugrel is only going to add to that confusion," predicted Dier, referring to the ADP receptor antagonist branded Effient by Lilly and partner Daiichi Sankyo. The compound has run into trouble with cancer and bleeding risks, but managed a favorable vote from an FDA advisory panel earlier this month (⁶ Also see "Lilly’s Prasugrel Overcomes Cancer Hurdle, Receives Favorable Panel Recommendation" - Pink Sheet, 3 February, 2009.).

- Randall Osborne (r.osborne@elsevier.com)

Coulda, Shoulda? Sanofi's Skip On Portola Proves Clot-Buster Gain For Novartis

More from Archive

More from Pink Sheet