Web Date: October 12, 2009
Onyx To Buy Proteolix
Onyx Pharmaceuticals has signed a definitive agreement to acquire biopharmaceutical firm Proteolix for $276 million in cash. The acquisition would extend Onyx's current franchise in the treatment of liver and kidney cancer to the treatment of hematological malignancies.
Proteolix's lead compound, carfilzomib, is a proteasome inhibitor now in clinical trials to treat patients with multiple myeloma. The blood disease affects more than 180,000 people worldwide.
The acquisition "provides strategic expansion into the $16 billion hematological malignancies market," says N. Anthony Coles, Onyx president and chief executive officer. Onyx, based in Emeryville, Calif., now sells Nexavar, a multiple kinase inhibitor to treat liver and kidney cancer, in partnership with Bayer HealthCare.
In addition to a cash payment, Onyx says it will pay up to an additional $535 million for Proteolix based on various milestones, including $170 million if carfilzomib receives accelerated FDA approval. Onyx expects to close the deal by the end of this year pending regulatory approvals.
Given the good prospects for carfilzomib, analyst Howard Liang with investment bank Leerink Swann says in a note to clients, "the total potential acquisition price of $851 million including all milestones does not seem outrageous."
San Francisco-based Proteolix was founded in 2003 based on intellectual property from Yale University and California Institute of Technology. The firm's investors include several venture capital firms including Nomura, Delphi Ventures, and U.S. Venture Partners.
Todd Yancey, Onyx vice president of clinical development, says carfilzomib will satisfy the need for a new multiple myeloma agent "that can extend and improve the lives of patients and be used in combination with existing therapies. Current therapies are limited by serious side effects, particularly neurotoxicity, as well as limited duration of response and resistance."
In addition to multiple myeloma, Proteolix is also exploring use of carfilzomib to treat a variety of solid tumors. The firm has other cancer drug candidates including an oral proteosome inhibitor and a selective immunoproteasome inhibitor.
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