Regeneron Pharmaceuticals Inc. snagged Teva Pharmaceutical Industries Ltd. as its latest collaborator in a global deal on lead pain asset fasinumab, a nerve growth factor (NGF) antibody in phase III development for osteoarthritis (OA) and phase II development to treat chronic low back pain. Teva, of Petach Tikva. Israel, agreed to pay $250 million up front, and Regeneron is eligible to receive up to $460 million in development and regulatory milestones.

The companies plan to share equally the remaining development costs for fasinumab, estimated to be approximately $1 billion. On the revenue side, the U.S. portion of the deal is structured as a traditional 50/50 profit-sharing agreement, according to Michael Aberman, Regeneron's senior vice president of strategy. Ex-U.S., Regeneron will manufacture and supply product in a purchase price arrangement that also will be calculated to include a "significant" share of profits.

Regeneron, of Tarrytown, N.Y., is eligible for additional sales milestone payments of up to $1.9 billion.

"Over the past couple of years, we've spoken to a lot of different people, obviously," Aberman told BioWorld Today. "At the end, we're very happy that Teva is the partner for us. They're a company with a commitment to the pain space and have shown a good ability to commercialize drugs in similar arenas."

Although Teva is recognized in pain care for its efforts to develop opioids with abuse-deterrent properties, "what's not always appreciated is that Teva is also working in another large unmet need – that of non-opioid analgesics," explained Richard Malamut, senior vice president of global clinical development and therapeutic area head of pain. "We've been tracking the anti-NGF story for several years. When the opportunity came to us earlier this year, we were very excited to initiate discussions with Regeneron."

The agreement excluded certain territories in Asia – among them, Japan, South Korea and Taiwan – that were part of a fasinumab collaboration Regeneron inked last year with Mitsubishi Tanabe Pharma Corp., of Osaka, Japan. That deal provided Regeneron with up to $55 million in up-front and near-term payments along with up to $170 million in R&D reimbursement and development milestones. The commercialization piece was structured in similar fashion to the Teva deal, with Regeneron set to supply product at a range of purchase prices linked to net sales with a profit share. Regeneron also is eligible for one-time purchase price adjustment payments of up to $100 million, based on annual net sales.

In the new deal, Regeneron is set to lead global development and commercialization in the U.S., while Teva guides ex-U.S. efforts. However, both companies insisted the collaboration will cross scientific and geographic boundaries, including the use of sales teams and marketing expertise from both companies in the U.S. commercialization effort.

"We've become pretty adept at working with collaborators," Aberman pointed out. "We expect to work very closely with Teva on all aspects of the program, both in the U.S. and outside the U.S. They're a partner that understands the pain space very well, and we hope to learn from them."

"It's a joint effort," Malamut agreed. "Both Teva and Regeneron came to the conclusion that combining our clinical development expertise and our combined commercialization capabilities will bring significant incremental benefit to the product."

'LONG ROAD FOR THE CLASS'

For Regeneron, the deal represents the culmination of more than 25 years of scientific work in neurotrophic factors. In targeting NGF – a protein that plays a central role in the regulation of pain signaling and is thought to be elevated in chronic pain conditions – fasinumab is designed to bind specifically to NGF and block NGF activity without binding to or blocking cell signaling for closely related neurotrophins (NT) such as NT-3, NT-4 or brain-derived neurotrophic factor.

Earlier this year, Regeneron reported that all four doses of fasinumab helped 338 patients with moderate to severe OA pain in their hip or knee achieve statistically significant relief at week 16 of a phase II/III study. The trial was the first to test subcutaneous delivery of the drug in patients with significant baseline pain who were intolerant of or inadequately served by acetaminophen and at least one oral nonsteroidal anti-inflammatory drug (NSAID) and an opioid. Regeneron previously evaluated an intravenous formulation of fasinumab in OA patients. (See BioWorld Today, May 3, 2016.)

"We have been committed to investing in the NGF class," Aberman said. "Having a novel pain therapy is quite unique. Other than NGF, there's really nothing else in late-stage development, and there seem to be only two parties now moving forward."

In addition to the Regeneron/Teva fasinumab alliance, the other program includes tanezumab, which resumed phase III development last year under partners Pfizer Inc. and Eli Lilly and Co. (See BioWorld Today, March 24, 2015.)

Both NGF programs were in limbo for more than two years after the FDA raised concerns in 2010 about a small number of patients in the tanezumab program whose OA worsened, necessitating joint replacement. (See BioWorld Today, June 25, 2010.)

In 2012, the FDA asked its Arthritis Advisory Committee to advise whether and how anti-NGFs could move forward, with the 21 members unanimously endorsing the need for ongoing development of the drugs to treat conditions such as OA. (See BioWorld Today, March 13, 2012.)

Committee members cited the unmet need for more effective painkillers and ongoing risks related both to opioids and NSAIDs, which represent the standard of care for pain treatment in those conditions.

While characterizing Regeneron as an "independent thinker" on a scientific basis, "it's always satisfying for us when another company sees a similar value in the class," Aberman acknowledged. In addition to Teva's interest in fasinumab, the decision by Lilly and Pfizer to restart the tanezumab program recognized that patients continue to search for other options to NSAIDs and opioids, he said.

The FDA panel also voiced overwhelming support to develop anti-NGFs in additional conditions, such as interstitial cystitis and chronic pancreatitis, without approved pain treatments.

In addition to OA and chronic back pain, Pfizer has examined tanezumab in indications such as diabetic peripheral neuropathy and interstitial cystitis and is currently examining the asset in cancer-related pain. Fasinumab could eventually show its mettle in such indications, as well, Teva's Malamut suggested, "but for right now, we are focusing on our two lead indications."

Most investors link Regeneron's long-term prospects to its large partnerships with Bayer AG, of Leverkusen, Germany, for Eylea (aflibercept) and Paris-based Sanofi SA for Praluent (alirocumab) and the late-stage candidates sarilumab and dupilumab, Aberman maintained. The Teva deal could bring more eyes to other assets in its pipeline.

"We certainly have a long history of research in the neurosciences and pain," he said. Without disclosing the target or timetable for a follow-on candidate, "this is an area of interest for us," Aberman added.

Leerink Partners LLC analyst Geoffrey Porges called the Teva deal "incrementally positive" for Regeneron and said the cost-sharing arrangement bolsters cash flow that has been dented by a "disappointing" Praluent launch.

"Fasinumab was not a major contributor to our valuation and thesis given the profile and history of the class," he wrote. "We view the deal positively since Regeneron gets cash up front for a risky asset and lays off some of the significant development and commercialization risk."

Acknowledging the "long road for the class," Roth Capital Partners analyst Joseph Pantginis reiterated his "buy" rating and $520 price target on Regeneron, calling the Teva alliance "an important next step for fasinumab as the anti-NGF class has seen a bumpy history, where fasinumab was included based on 'guilt by association.'"

On Tuesday, Regeneron's shares (NASDAQ:REGN) gained $3.41 to close at $406.24, while Teva shares (NYSE:TEVA) lost 34 cents to close at $50.36.