Alexion Pharmaceuticals Inc., of Cheshire, Conn., closed out 2011 with an impressive all-cash acquisition of Montreal-based Enobia Pharma Corp. for $610 million up front and $470 million in sales and regulatory milestones. Enobia's lead product, asfotase alfa (ENB-040), is a Phase II enzyme therapy for the ultra-orphan disease hypophosphatasia (HPP), which causes death and severe morbidity in its sufferers.

The disease is caused by a mutation of the gene for alkaline phosphatase and affects just a few thousand patients in the U.S. Early clinical results showing reversal of symptoms suggested the drug could be a slam-dunk for new owner Alexion.

'We're excited to add this highly promising and innovative late-stage product to the pipeline,' said Alexion CEO Leonard Bell in a conference call Thursday morning.

There are no approved treatments for HPP. It can be diagnosed at any age, and the severity of the disease varies widely. Among infants born with HPP, survival at 1 year is about 50 percent. Symptoms include skeletal deformity, severe muscle weakness and progressive damage to vital organs. It affects an estimated 1 in 100,000 newborns.

Asfotase alfa has orphan drug status in the U.S. and in Europe, and has been granted fast-track status by the FDA.

The drug is designed to replace the deficient enzyme, with modifications aimed at improving the pharmacokinetics compared to the natural enzyme, while targeting the drug specifically to bone. The targeting sequence consists of 10 aspartate residues, which bring the enzyme directly to bone tissue.

An Fc domain is added to improve serum half-life. Bell said the targeted version of the enzyme has 30-fold greater binding efficiency to hydroxyapatite, the form of calcium found in bone, than the untargeted form, and accumulated at a fourfold greater rate in bone.

Promising preclinical results showed asfotase alfa significantly increased survival, prevented hypomineralization and healed bones severely weakened by disease. Two six-month Phase I/II studies, one in infants and one in pediatric patients ages 5 to 12, also had strong results. Patients in both studies rolled over to an extension trial.

Data from an ongoing Phase II trial in 19 adult and adolescent patients are expected in the second quarter of 2012. That study is measuring the effect of asfotase alfa on HPP-related osteomalacia via trans-iliac crest bone biopsy.

In the open-label, multinational juvenile trial, 13 children between the ages of 5 and 12 with rickets and gross motor deficits from HPP received subcutaneous injections of asfotase alfa for six months. All 12 patients who completed the trial showed radiographic improvement as early as six weeks after beginning therapy. The trial met its endpoint of statistically significant improvement in rickets compared to historical matched cohort controls.

Enobia presented results from its infant study at the American Society of Bone Mineral Research in Denver in 2009. In that study, four of five severely affected infants showed marked improvements in bone mineralization, skeletal defects, respiratory function, cognitive and motor development, and weaning from assisted ventilation after six months of treatment with asfotase alfa.

In August, Enobia raised $40 million in a private placement to support development of asfotase alfa, for a total of $100 million in venture capital raised in the lifetime of the company leading up to its current acquisition by Alexion. (See BioWorld Today, Aug. 11, 2011.)

Alexion's acquisition will be all cash, with no equity issued in connection. It will finance the acquisition using cash on hand and $300 million in committed bank debt.

Coming in at the 11th hour, Alexion's acquisition of Enobia represents one of the biggest biotech deals of 2011. It's Alexion's third acquisition this year. In February, Alexion acquired Taligen Therapeutics Inc. and key technology assets of Orphatec Pharmaceuticals GmbH, including an investigational therapy for molybdenum cofactor deficiency Type A, a disease that causes brain damage and death in infants.

Alexion paid $111 million up front for Taligen, with additional potential milestone payments based on clinical and regulatory milestones. Among its properties from Taligen, it gained TT30, a therapy for wet age-related macular degeneration (AMD). (See BioWorld Today, Feb. 1, 2011.)

The company has stayed in its rare disease comfort zone. Alexion currently markets Soliris (eculizumab), a fully humanized monoclonal antibody targeted at complement protein C5, which has shown strong sales in paroxysmal nocturnal hemoglobinuria and atypical hemolytic uremic syndrome. Alexion also has programs in hematology and neurology, including B-chronic lymphocytic leukemia and myasthenia gravis.

Comparable deals have been few and far between in a year marked by a continuously sluggish economy and correspondingly cautious pharma activity. The last time in recent memory that a pharma company paid a sum approaching $1 billion for a biotech with a single major asset was Daiichi Sankyo Co. Ltd.'s purchase of Plexxikon Inc., and its red hot melanoma antibody, PLX4032, in March for $805 million up front and $130 million in milestones. (See BioWorld Today, March 2, 2011.)

Most big money mergers of 2011 followed the pattern of Pfizer Inc./King Pharmaceuticals Inc. ($3.6 billion, February 2011) or Sanofi/Genzyme Corp. ($21.1 billion, April 2011). In other words, the big deals have been a marriage of relatively big companies with big pipelines, rather than a takeover driven by a single standout product like asfotase alfa.

Piper Jaffray's Ian Somaiya was impressed with the deal. 'Alexion remains one of our top picks heading into 2012 as we expect it to remain a 'beat and raise' story for years to come' with Soliris sales eventually exceeding $5 billion.

And Leerink Swann's Howard Liang liked the clinical results for asfotase alfa. 'ALXN's pending acquisition of Enobia adds a late-stage biologic for another ultra-rare orphan disease (hypophosphatasia, or HPP) that could reach the market in 2014.' Liang added that, while the price tag for Enobia was 'not cheap, likely as a result of competitive bidding, we believe there is a good chance for a positive return.'

Wells Fargo's Brian Abrahams crunched the numbers for potential sales, and found much to like. 'Enobia's recent physician survey indicated there could be several thousand treatment-eligible patients worldwide. If one assumes a $250K/year annual cost and 50 percent penetration, this would suggest ENB-0040 could have peak sales potential of at least $300 million to $500 million worldwide.'