Andy, I just re-read the LGND press release on the European trials. The duration was 12 weeks (not 120 days as I posted). Thus patients enrolled immediately would have finished in late June (although I don't know when the first patient was enrolled), which is when LGND had a very big meeting with WLA (Parke-Davis). There is some skepticism on WLA's willingness to pay out big time up front fees (and I'm not sure that the European data was presented at the meeting). I think that LGND will sign a deal soon, although I don't know with whom. Here's why:
I think that LGND will sign a large diabetes deal with someone soon.
They already have many alliances (PFE, GLX, AGN, ABT, AHP, SBH, Sankyo) and
those deals are probably similar to the ones that WLA will be signing with
other Biotechs. A relatively small up front payment (usually associated with
an equity position) coupled with milestone and royalty payments. For these
alliances, LGND screens the big company's library of compounds and then the
pharma is responsible for clinicals and marketing. However, the diabetes
deal is quite different. LGND already has one rexinoid (Targretin) in Phase
III trials (for cancer), and it is in Phase II trails for diabetes (announced
in late March - each patient is to be on the drug for 12 weeks, so patients
enrolled then should now be completing the schedule). Thus, LGND has already
done the initial clinical (I'm sure that the Phase III trial will be much
larger) and they are expecting much more than what they get from the earlier
alliances (which are more of a research deal on LGND's part). Moreover, LGND
is the industry leader in rexinoids (which they discovered). They have
another compound, ALRT268, which is more potent than Targretin, as well as
LG100754 which can actually substitute for the Rexinoid/TZD combo (it
produces a change in the RXR which causes it to partner with PPARs, even when
the PPAR is not activated by TZDs). Moreover, LGND has an active PPAR
program (they just published a paper showing that PPAR gamma, the target of
Rezulin, actually exists in two or three forms so they will have a lead in
the area of 2nd and 3rd generation TZDs also.
As far as GLX is concerned, LGND's alliance with them began in 1992. They
target TZDs and PPARs (as well as HNF-4) for control of lipid metabolism and
I'm sure that GLX is interested in Rexinoids (for partnering in controling
lipid metabolism as well as insulin resistance) and they do need a
blockbuster to shore up Tagament sales (which go off patent soon).
Of course LGND also has an alliance with Sankyo (inflammation using GLYC
technology) and I have heard rumors that they are in talks with LGND also.
Sankyo discovered Rezulin and they have partnered with GLX (and PFE?) for
European sales.
Although I know that LGND's current partners are interested in LGND's
rexinoids, I'm sure that others (LLY, JNJ, ZEN, MRK, BMY, PNU) would also be
interested (the potential markets are huge as shown by recent WLA sales) and
I think that LGND wants to do the deal this quarter (4Q at the latest).
Although WLA may not be willing to put up big bucks, I'm sure that LGND
thinks its daibetes program is a slam dunk and many others are very
interested. I agree that sales are several years off (although off label
sales could begin as early as next year), but I think that WLA would be smart
to begin to protect their market share now.
As far as holding onto a big price pop, I think that LGND has much more going
(including Panretin Phase III data and NDA filing) which will shore up the
price. I'm still trying to find out the status of the leptin deal(s), which
if signed would also shore up a price jump.
LGND has a huge potential and when the street begins to see big deals or FDA
approvals, they will provide tremendous price support. LGND's pipeline and
underlying technology put many of the big boys to shame. |
