After a clinical hiccough five months ago set Coley Pharmaceutical's drug development funding back several years, Pfizer has stepped in to save the day, snapping up the biotech for $164m.
The deal was announced on Friday (three days after Pfizer announced a payout to its former Exubera partner, Nektar Therapeutics), and has been gladly seized upon by Coley, with CEO Bob Bratzler exclaiming that the firm couldn't have found "a more committed or a more qualified partner." While Pfizer's former collaborators might find this high praise debatable, Coley appears more than happy with the deal, having earned $8 per share through the acquisition to total around $164m.
Coley and Pfizer have been working together since 2005, collaborating on compounds that make use of Coley's toll like receptor (TLR) technology platform to develop new anti-cancer treatments. Back in June, however, the company hit a stumbling block when Pfizer discontinued trials of the partners' lung cancer candidate PF-3512676, after it was found to offer no additional clinical efficacy over standard treatment.
This unexpected turn of events was a major disappointment for Coley, and served to throw the company's development plans out of sync: "Our timeline to product commercialisation shifted," explained Bratzler during the company's conference call on Friday.
"In essence our access to milestone in royalty revenues necessary for funding drug development and fortifying our pipeline was delayed…we recognised that the most significant value creation opportunity would now be at least five years out." With Pfizer now taking control, however, there is a lot more money behind Coley's pipeline as it heads towards commercialisation.
The company's most advanced product is its vaccine adjuvant, VaxImmune, touted by the company as the "emerging gold standard of vaccine adjuvants" and currently in over 30 vaccine clinical trials worldwide. With Pfizer keen to add expertise and technology to enhance its vaccines pipeline, this acquisition fits squarely with the company's strategy, and will hopefully add potential earners to the company's portfolio to help mitigate losses anticipated as a number of its drugs go off patent in the next few years.
With the vaccine market worth around $10bn in 2006, and expected to grow to nearer $24bn by 2012, Pfizer will be tapping into a lucrative market. In addition to the existing VaxImmune possibilities, the acquisition means Pfizer also gets its hands on second- and third-generation vaccine adjuvants Coley is in the process of developing.
Bratzler also highlighted that Coley is a strategic fit for Pfizer as the company's products and technology cover nine of Pfizer's eleven therapeutic areas. On top of the technology and Coley's individual products, Pfizer also gains control of the firm's collaborations and partnerships with other pharma companies, which include the likes of Merck, GlaxoSmithKline, Novartis and Sanofi-Aventis.
The deal is expected to complete in early 2008, with this latest biotech buyout starting tongues wagging as to who will be next on big pharma's shopping list, with Discovery Laboratories and Neopharm just two names being bandied around in industry speculation.