Building relationships is business 101, but building relationships that can help overcome obstacles while trying to close a big deal during a pandemic is in a class by itself.
That is exactly what MEI Pharma Inc. did recently when it closed a deal with Kyowa Kirin Co. that will bring in $100 million upfront and potentially an additional $582.5 million more to the San Diego-based MEI Pharma.
“It went smoothly thanks to David Urso, MEI chief operating office and legal counsel; he did much of the heavy lifting on this one,” said MEI CEO and President Dan Gold. I think it even beat his expectations considering all the complexities of the crisis.”
The Last 10%
CEO Gold likened the process to building a house. Initially, it goes up surprisingly quick; the last 10%, though, seems to take forever.
In deals, you need the face to face time, talking things through, Gold said. “Obviously we could not do it this time, but we have such good relationship with them (Kyowa Kirin) we could work out the the last percent through teleconferencing.”
“We were able to get the definitive agreement in five weeks which is pretty fast, largely because we had a working relationship with these guys and put a lot into the terms sheet,” said Urso. “The term sheet is a road map to the definitive agreement, so all that time and effort talking through the term sheet led to the definitive agreement.”
Through those efforts, MEI and Kyowa Kirin Co. (KKC) entered into a global license, development and commercialization agreement to further develop and commercialize MEI’s ME-401, an oral, once-daily, investigational drug candidate, selective for phosphatidylinositol 3-kinase delta (p13Ko), in clinical development for the treatment of B cell malignancies.
According to the companies, MEI and Kyowa Kirin will co-develop and co-promote ME-401 in the U.S. with MEI booking all the revenue from U.S sales. Kyowa Kirin has the exclusive commercialization rights outside of the U.S. and will lead commercialization and book all revenues from sales of ME-401.
Kyowa Kirin will pay MEI escalating tiered royalties on ex-U.S. sales starting in the teens. Kyowa Kirin will be responsible for all incremental ex-U.S. clinical development costs and all ex-U.S. regulatory, CMC and commercial costs, MEI said.
The decision to partner with Kyowa was a good one according to MEI.
“It was very important for us to find a partner who was willing to let us co-develop and co-commercialize and actually book the revenue so we could grow as an organization toward becoming a commercial entity rather than just taking a back seat to a large pharma that might let us have a few MSLs and a few reps while doing all the heavy lifting,” Gold said.”
“We feel this drug has a lot of promise in many indications, and in order to realize this promise, we really needed a strong partner and to firm up our balance sheet,” Gold said. “And having accomplished that now that we have kind of worked through a 3 to 5 year clinical development plan and now we start getting that into action with Kyowa Kirin.”
According to MEI, ME-401 is being studied in the ongoing Phase 2 TIDAL clinical trial evaluating patients with relapsed or refractory follicular lymphoma which, subject to results, may support an accelerated approval of a marketing application with the U.S. Food and Drug Administration (FDA). An ongoing Phase 1b study is evaluating ME-401 as a monotherapy and in combination with rituximab (Rituxan) or zanubrutinib (Brukinsa) in patients with B-cell malignancies. Also, a Phase 1 study was initiated in 2019 evaluating ME-401 as a monotherapy in patients with indolent B-cell malignancy in Japan.
MEI Pharm is a solely focused oncology company.
Four Clinical Assets
“We have four clinical assets that we are studying. One (ME 401) is in clinical trial for approval. We have another drug that is completely different for AML that is partnered with a Swiss pharmaceutical,” said Gold. “That is also in a phase III registration study with the intent to get the drug approved if the trial goes as we hope. We have two drugs in registration study and two in development and the two furthest (along) are both partnered.” Gold said.
According to MEI, all four of the drugs are small molecule with three taken orally and the fourth is injectable. Gold said there are competitors that have the same target as ME-401, and they have been approved, but some have some sort of toxicity issues that have plagued the field.
The company is positioning itself for continued expansion. MEI has a new lease in a new building taking twice as much room as the previous site. MEI is waiting to move in after the pandemic is over.
According to Gold, the company has been — and is — hiring. “We are doing Zoom interviews,” Gold said. “We have everything we need to keep hiring during the crisis.”
As for the San Diego talent pool, it has its strengths and a weakness. San Diego was and remains a hotbed for biotech. What we lack — San Diego has had many successes but what we lack — Gold said, is a lot of late stage and early commercial stage companies. We hope that will be the next wave of employment here.
“Hopefully, the ecosystem will evolve as more companies become commercial companies,” Urso said. “That is what happened in San Francisco and Boston.”