Deals

Cancer-drug biotech Agensys sells to Astellas for $387M — but is it a pig in a poke?

agensys-logo.jpgYet another biotech has succumbed to Big Pharma’s deep-pocketed blandishments. Agensys, a decade-old Santa Monica, Calif., biotech with an early-stage pipeline, just agreed to sell itself to Japan’s Astellas Pharma for $387 million in cash. The company’s shareholders can receive up to another $150 million in milestone payments.

Agensys, which called itself UroGenesys until 2001, is developing a range of antibody drugs against cancer. Oddly, though, the company hasn’t had much to say about its drug candidates outside of some fairly vague generalities, such as noting that it has developed a “portfolio” more than 40 validated cancer targets or that it has “identified multiple product opportunities” for antibodies and other drugs that attack cancer. (For a full list, see here.) It’s not even clear that any of Agensys’ drug candidates have entered human testing, which is pretty striking for a company that’s been around since 1997. The one drug Agensys managed to get into early-stage testing — a prostate-cancer treatment — hasn’t been heard from since 2005.

Given all that, when Agensys raised a $41 million fourth funding round in July (see our coverage) I was half convinced that the company’s secrecy cloaked a do-nothing pipeline, one that’s full of promise and always will be. Astellas, however, seems to think otherwise, although with its own pipeline is in fairly dismal shape, so it might not be the best judge at the moment. Desperation doesn’t tend to encourage critical thinking.

According to BioWorld Today, however, Agensys has 12 antibody programs in its pipeline (although what exactly that means is anyone’s guess), and aims to request permission to start a clinical trial for a new kidney-cancer drug later this year. That’s certainly something, I suppose.

The other striking thing about this deal is the price Astellas is paying for what is essentially an early stage biotech whose technology has barely reached the proof-of-concept stage. When Merck paid $350 million for NovaCardia in July, it was getting a company with a new heart drug that had already completed one late-stage “phase III” trial. By contrast, Astellas is picking up an unknown quantity in Agensys, whose drug-development technology could be every bit as good as it claims — or a giant bust.

In that, however, Astellas is hardly alone. Bristol-Myers dropped $430 million on Adnexus Therapeutics in September, and that company had only advanced one drug into clinical trials at that point.

In other words, it’s still a great time to hawk your biotech to a rich, hungry Big Pharma. The party’s in full swing, but don’t dawdle — this sort of frenzy won’t last forever.