Biogen Inc. BIIB announced two strategic collaborations to develop potential therapies for Alzheimer's disease, Parkinson's disease and other devastating neurological diseases.
The first collaboration was with private biotech C4 Therapeutics (C4T), per which the latter's novel protein degradation platform would be leveraged to discover and develop potential novel targets for treating neurological conditions, such as Alzheimer's disease and Parkinson's disease. Under this deal, while Biogen and C4T have agreed to discover the potential targets together, Biogen will be responsible for advancing the candidates for future development and potential commercialization. For the deal, Biogen will be entitled to pay C4T up to a total of $415 million in upfront and potential future milestone payments plus potential future royalties.
The second deal is with Waltham-based Skyhawk Therapeutics, under which Biogen will use Skyhawk's SkySTAR technology platform to develop potential targets using selective RNA-modulating small molecules that can treat multiple sclerosis, spinal muscular atrophy and other neurological diseases. For its research services and the exclusive license to the SkySTAR's platform, Biogen made an upfront payment of $74 million to Skyhawk while the latter will also be entitled to potential future milestones and royalties. Biogen has also reserved the option to license any therapies resulting from this collaboration and will take care of its future development and commercialization.
The collaborations are in line with Biogen's strategic priority to build potential therapies for neurological conditions. In 2017, Biogen added seven new clinical stage programs to its neuroscience pipeline through advancing internal pipeline candidates and external deals. In 2018, Biogen signed five business development pacts with several having transformative potential.
Shares of Biogen were up almost 4% on Friday after it announced the two deals. The stock has dipped 3.5% in the past year compared with the industry 's decline of 18.9%.
Several companies have lately invested in collaborations with smaller biotechs to discover potential treatments for AD and other neurological diseases.
Last month, Lilly LLY signed a collaboration agreement with Swiss biotech AC Immune SA ACIU to jointly develop tau aggregation inhibitors, which have potential to treat AD and other neurodegenerative diseases.
In October, Pfizer PFE announced the creation of a new biotech called Cerevel Therapeutics in partnership with private equity firm Bain Capital, LP, which will focus on developing drugs to treat central nervous system (CNS) disorders including Parkinson's and Alzheimer's disease.
Alzheimer's, a fatal illness that causes progressive decline in memory, has always been a highly challenging area with not much progress being made in spite of significant investments (both funds and resources) to that end. Several companies have failed to develop safe and effective treatment options for this deadly brain disease.
Despite several setbacks, the companies continue to invest heavily in developing Alzheimer's disease treatments, given the high commercial potential in this market. Success in this area means huge returns. This is because more than five million Americans are living with Alzheimer's disease with the numbers expected to triple by 2050 (Data: Alzheimer's Association). The market has immense commercial potential and companies coming out with new treatments could rake in billions of dollars in sales.
Biogen currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
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