- Allergan kicked off what has become a hectic week for Alzheimer's disease news on Tuesday, revealing in a statement it had acquired private Chase Pharmaceuticals for $125 million upfront.
- Washington-based Chase is a specialty drugmaker focused on creating treatments for Alzheimer's. It has a handful of drugs in development, led by CPC-201, which works to stop the breakdown of the neurotransmitter acetylcholine in the brain.
- Chase unveiled results from a Phase 2 study of CPC-201 in July. While the trial mainly investigated dosing levels, it also found patients receiving the drug showed increased cognition and dampened Alzheimer's side effects.
Allergan needs a pick-me-up in its central nervous system (CNS) business as generic competition to Namenda XR, one of its most profitable products, has cut into earnings. The company reported total CNS drug sales of $325.5 million in the third quarter, a 20% decline from the $406.7 million it earned during the same period in 2015, according to its most recent filing with the Securities and Exchange Commission.
Alzheimer's drugs may help offset those declines, although the risk of failure remains as high as ever. Aside from the deal with Chase, Allergan inked a licensing agreement back in April with Heptares Therapeutics for access to the clinical-stage company's muscarinic receptor agonists, which work to improve cognition in patients with the disease. The deal was worth up to $3.3 billion.
In addition to the initial compensation, Allergan is offering Chase regulatory and sales milestone payments for select compounds, though it did not give further public details on total value.
Allergan's sale of its generic unit to Teva has given it a sizable warchest to spend on M&A and stock buybacks, netting the Irish company over $33 billion in cash.
The company's new deal came less than a day before Eli Lilly reported it would not seek approval for its highly-anticipated Alzheimer's drug solanezumab after the treatment failed to meet its primary endpoint in a Phase 3 trial.
Considered a bellwether for other drugs operating under the amyloid hypothesis — which argues that the buildup of amyloid protein in the brain contributes to the disease's progression — solanezumab's failure is likely to shake investor and drug manufacturer confidence in the therapeutic area. Eli Lilly's stock, for instance, dropped more than 12% following the Wednesday morning announcement.
On the plus side for Allergan, Chase's candidates have different mechanisms of action than Eli Lilly's drug.
"We believe our lead candidate, CPC-201, will offer a significant improvement over existing therapy in the symptomatic treatment of Alzheimer's disease, and will benefit all those suffering from this disease," Chase's co-founder and Chief Scientific Officer Thomas Chase said in the Nov. 22 statement.