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Acquisition elevates Sunovionís respiratory focus
October 2012
by Amy Swinderman  |  Email the author
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MARLBOROUGH, Mass.óLooking to take its respiratory focus and that of parent company Dainippon Sumitomo Pharma Co. Ltd. (DSP) to the next level, Sunovion Pharmaceuticals Inc. announced Aug. 30 that it will acquire Elevation Pharmaceuticals Inc., a privately held biopharmaceutical company specializing in the development of new aerosol therapies for patients with respiratory diseases, for an upfront payment of $100 million.
 
The deal, which has been approved by both companies' boards and is subject to customary closing conditions, also includes up to $90 million in development milestone payments for EP-101, Elevation's inhalation solution of a long-acting muscarinic antagonist (LAMA) bronchodilator that is in Phase IIb clinical trials for the treatment of patients with moderate to severe chronic obstructive pulmonary disease (COPD). Once regulatory approvals are granted, Sunovion will also pay up to $210 million in commercial milestone payments for EP-101 as well as $30 million in subsequent milestone payments upon the successive development of additional new programs.

Sunovion is an indirect, wholly owned subsidiary of DSP, a top pharma in Japan with a diverse portfolio of pharmaceutical, animal health and food and specialty products, and a strong focus on developing products for central nervous system (CNS) disorders. DSP was formed in 2005 from the merger of Dainippon Pharmaceutical Co. Ltd. and Sumitomo Pharmaceuticals Co. Ltd.

Those large-scale resources and support are what sets this mid-sized company apart from similarly sized companies, says Bill Yelle, Sunovion's senior vice president of corporate development and licensing.

"Where we differ from similarly sized companies in the United States is that we have this strong backing and support outside of this market, as well as a strong focus on CNS disorders, respiratory conditions and oncology," he says.

Borrowing its company name from a combination of the words "sun" and "innovation," Sunovion's drug discovery resume includes the sleep drug Lunesta and the schizophrenia drug Latuda. It also has a strong respiratory focus with many products already on the market: Zopenex (levalbuterol HCl) Inhalation Solution, Xopenex (levalbuterol tartrate) Inhalation Aerosol, Brovana (arformoterol tartrate) Inhalation Solution, Omnaris (ciclesonide) Nasal Spray, Zetonna (ciclesonide) Nasal Aerosol and Alvesco (ciclesonide) Nasal Aerosol.

That's where its interests and those of Elevation intersect, says Yelle. EP-101 is currently the only LAMA in late-stage development in nebulized form, providing a significant opportunity to address the needs of patients struggling with the control of their COPD using handheld inhalers.

"This acquisition is very much in keeping with Sunovion's commitment to specialty respiratory conditions as a therapeutic area," says Yelle. "Elevation's internal development capabilities are right in our sweet spot in terms of our therapeutic focus. The acquisition was a matter of timing, as with a number of relationships that develop over time. We started having a meaningful dialogue roughly two years ago, and then later in earnest as they were releasing additional Phase II data."

EP-101 is a proprietary solution formulation of glycopyrrolate, delivered by a customized eFlow Nebulizer System (originated by and licensed from PARI Pharma GmbH), which was developed to optimize medication delivery and allow ease of use. Daily administration of inhaled bronchodilators (including LABAs and long-acting beta agonists) and corticosteroids are the main therapeutic options for managing the symptoms of COPD. EP-101 was designed for patients who are not well controlled on current standard of care or who prefer a nebulizer, notes Alistair Wheeler, Sunovion's vice president of clinical development and medical affairs.

"Unfortunately for patients with severe disease and for those unable to use handheld devices, these devices sometimes require a level of dexterity that some people are not able to come with," Wheeler says. "Conventional nebulizers are also noisy, require 10 to 20 minutes to deliver the drug and are bulky and can't be transported easily. This device is almost silent, completes delivery in two minutes and is very mobileóit can fit into a lunch bag-sized bag. This is a much better and more efficient delivery system for patients."

Wheeler adds with a laugh, "We like to think of it as moving from a Ford Model T to a Toyota Prius."

Two Phase II studies have been conducted, and an additional Phase II study will be conducted this year on EP-101 to evaluate its efficacy and safety in patients with moderate to severe COPD. Phase II trials are expected to initiate in the second half of 2013, and a commercial launch is expected in 2016.

For now, Sunovion is not releasing any projections about how the product may perform, "but we do feel it will be a very competitive product, and we think it will be a unique offering to a specialty group of patients with few options," says Yelle. According to a recent report from healthcare advisory firm Decision Resources, the global COPD market is expected to hit $13.4 billion in 2020.

Founded in January 2008, Elevation has raised more than $60 million from premier healthcare- and pharmaceutical-focused venture capital investors. The company was not available to comment on this story.

 
 
Code: E101223

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