Johnson & Johnson To Pay Nearly $1 Billion for Pharmacyclics' Cancer Drug

Johnson & Johnson have entered into an agreement to help develop a cancer compound discovered by Pharmacyclics in a deal that could be worth close to $1 billion to Pharmacyclics.

Johnson & Johnson's Janssen Biotech subsidiary will work together to develop and market the drug, known as PCI-32765, which is currently involved in a range of Phase I and II studies "across a panel of B-cell malignancy disorders".  These include chronic lymphocytic leukaemia, mantle cell lymphoma, and diffuse large B-cell lymphoma.

PCI-32765 is an orally active, small molecule inhibitor of Bruton's tyrosine kinase, which Johnson & Johnson says is an essential element of the B-cell antigen receptor (BCR) signalling pathway.  The latter is a critical pathway required for tumour expansion and proliferation.

Under the terms of the agreement, Janssen has paid an upfront fee of $150 million, which will be recorded in the fourth quarter, and up to $825 million in development and regulatory milestone payments.  The transaction, which will impact Johnson & Johnson's 2011 earnings per share by $0.04-$0.05, will see the two firms share profits (and losses) 50/50, plus development costs (Pharmacyclics 40% and Janssen 60%).

The agreement with Pharmacyclics "is an opportunity to bring a new form of oral therapy to patients with B-cell malignancies" commented William Hait, head of oncology at Janssen.  He added that PCI-32765 is "an innovative compound, with broad applicability and the potential to help a large number of patients".

Pharmacyclics chief executive Bob Duggan added that "over the past 18 months, we have met a number of outstanding individuals and very high quality organisations around the world.  In the end, we felt that Janssen was the appropriate strategic fit for us and for PCI-32765".

Links:
www.jnj.com
www.pharmacyclics.com
www.pharmatimes.com

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