In 2011, Imbruvica (ibrutinib), a Pharmacyclics drug in Phase II trials, caught the eye of Peter Lebowitz, Johnson & Johnson's research director. Lebowitz convinced J&J's CSO Paul Stoffels and CEO Alex Gorsky to fly up to Sunnyvale to meet with Robert Duggan. Duggan had accumulated 13+ million shares in Pharmacyclics over the past six years and now served as company CEO.Back in 2006, Pharmacyclics had purchased a number of small molecule candidates from Celera, including the BTK inhibitor ibrutinib. Not all went well, and by 2008 it appeared Pharmacyclics was headed for biotech oblivion.
However in 2011, Gorksy and team were so impressed with they saw in ibrutinib that J&J's Janssen Biotech division made a $150 million up-front payment and provided $825 million in development and regulatory milestones related to the drug. The companies would split development expenses 40/60 (Pharmacyclics/Janssen), and global profits and losses 50/50.
Over the next three years, J&J made at least five milestone payments relating to ibrutinib. The drug, now branded as Imbruvica, was approved for the treatment of mantle cell lymphoma in 2013 and for chronic lymphocytic leukemia in 2014. Additional approvals followed.
In 2015, Abbvie purchased Pharmacyclics for $21 billion in cash and stock. Robert Duggan's personal gain was a whopping $3 billion. Since J&J remained entitled to 50% of Imbruvica's profits, a Sanford Bernstein analyst argued that Abbvie was essentially valuing the drug at $42 billion.
In third quarter 2017 results, J&J reported $512M as its share of Imbruvica sales, implying a current annual run rate of over $2B for J&J.
Even if Imbruvica is not approved for treatment of new indications as a result of ongoing clinical trials, Johnson and Johnson's 2011 deal could prove out to be one of the most successful Phase II partnerships in biotech history.
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