International law firm Dechert LLP’s highly regarded cross-border transactional life sciences practice has advised on two major sector transactions announced this week, between Cellzome and GlaxoSmithKline (“GSK”) for £61 million (US$99 million), and between Italian-based companies Newron Pharmaceuticals S.p.A (“Newron”) and Zambon for €20 million (US$25.69 million).
In the first transaction, Dechert advised Cellzome, a leader in the development and advancement of proteomics technologies, in its £61 million worldwide strategic alliance with leading global pharmaceuticals company GSK to promote novel kinase-targeted therapeutics used to treat inflammatory diseases. Under the agreement, Cellzome, a privately owned company with laboratories in the UK and Germany, will become part of GSK’s R&D organisation.
GSK, which already owns a 20% equity interest in Cellzome, will assume full control of the company. Simultaneous with the acquisition, Cellzome shareholders, including GSK, intend to create a spin-off company, which would hold the rights to certain of Cellzome’s assets and activities that GSK does not wish to progress. The acquisition is not subject to any third party approvals and is anticipated to complete on 21 May 2012. Among the shareholders of Cellzome who have sold their stake are some of Europe’s leading biotech investors, including Advent, Index, Schroeder Ventures, Sofinnova and Atlas.
The alliance gives GSK access to Cellzome’s unique expertise in identifying and developing selective kinase inhibitors and its proprietary Kinobeads™ technology which, by screening compounds in a physiological setting, is designed to improve the predictability of these drug candidates’ performance in clinical testing. Kinases are key molecular switches in cellular signaling events with a central role in many inflammatory responses and selective inhibitors offer a different approach to therapeutic intervention in diseases such as rheumatoid arthritis or multiple sclerosis.
In the second transaction, Dechert advised Newron, a R&D company focused on CNS and pain alleviation therapies, on its newly announced strategic collaboration and license agreement with pharmaceuticals company Zambon for the former’s lead compound safinamide for €20 million. In aggregate, the total Zambon investment in Newron will be €20m as defined below, also covering the completion of safinamide’s clinical development and the preparation of the application for marketing approval in Europe and the US.
Zambon has already made an investment of €5m in Newron equity and an option fee, which was announced on April 5, 2012. In addition, Zambon will make a downpayment to Newron of €5m for the agreement that has now been executed, covering the license for safinamide research, development, manufacturing and marketing in all territories of the world with the exclusion of those covered by the recently announced license agreement with Meiji Seika Pharma (Japan and key Asian territories). Furthermore Zambon will meet the costs incurred by Newron to complete the development of safinamide and prepare the applications and file for marketing approval in Europe and the US. Zambon qualifies for one seat on the board of directors of Newron, at the upcoming Annual General Meeting.
Newron will receive significant success based regulatory milestone payments as well as customary double digit royalty payments on future sales of safinamide in the licensed territories.
The Dechert team advising Cellzome was led by London-based corporate life sciences partner Graham Defries, assisted by corporate associates Harriet Cahalane, Amy Grammer and Thomas Mieszkowski. Associate Dan Hawthorne advised on tax matters alongside Colin Hailey from Confluence Tax (All London).
The Dechert team advising Newron was led by corporate life sciences partner David Schulman (London, Washington), assisted by intellectual property partner Daniel Becker (Silicon Valley), counsel Thomas Rayski (New York) and associate Shirley Wang (New York).
