The biopharma industry saw a significant increase in the number of deal terminations in the last two years. Clinical and regulatory results, change in control limitations, and strategic reprioritizations were among the most common reasons for deal termination. We used the DealForma database to track partnership terminations announced in 2018 and 2019. We compiled a list of the top 20 terminations of 2018 and 2019 based on the total value received during the partnership, including upfront, milestone payments, and termination fees the company received.
In 2019, Reata / Abbott positioned first with Reata reacquiring baradoxolone and two additional NrF2 activators for $330M plus royalties. Second goes to Celgene’s agreement with BeiGene and Jounce Therapeutics for limitations and priorities related to the BMS acquisition. Sanofi secured third place when it terminated its $1.8B agreement with Lexicon Pharmaceuticals for mixed clinical results. In 2018, Eli Lilly came in first with its discontinuation of Phase III development of Lanabecestat. Additionally, Biogen terminated a $1B partnership with AGTC following the failure of a gene therapy trial.
1. Reata Terminated its Bardoxolone Agreement with Abbott
In Sep. 2010, Reata granted Abbott exclusive rights to develop and commercialize bardoxolone and other molecules for the treatment of renal, metabolic, and cardiovascular diseases, including CKD and PH, worldwide excluding the U.S. and the territories previously granted to Kyowa Hakko Kirin (KHK). In 2009, Reata granted KHK exclusive rights to commercialize bardoxolone in Japan, China, South Korea, Taiwan, Thailand, Singapore, Philippines, Malaysia, Indonesia, Brunei, Vietnam, Laos, Myanmar, and Cambodia. Reata would receive $450M in upfront and near time milestone payments and to up to $350M in milestones per product, plus royalties. Further in 2011, Abbott expanded the partnership by adding 2nd and 3rd generation NrF2 activators globally for all indications excluding renal, CVS, and metabolic disease for an additional $400M up front and a 50% share of profits for the therapies excluding rheumatoid arthritis and autoimmune disease for which Abbott retains 70% of profits. As of Dec. 2018, Abbott had not opted for any program and Reata received $300M in upfront cash and equity. In Oct. 2019, Reata reacquired baradoxolone and additional NrF2 activators in exchange for $330M.
2. Celgene Terminated its 2017 Agreement with BeiGene
In Jul. 2017, BeiGene granted Celgene worldwide rights, excluding Asia, to develop and commercialize PD-1 inhibitor tislelizumab for solid tumors. BeiGene received $413M up front, including the purchase of 32.7M shares in BeiGene for approximately 5.9%, with a potential for up to $980M in milestones plus royalties. In Jan. 2019, BMS’s acquisition of Celgene mandated that BMS not hold two PD-1 assets. Further, Celgene decided to terminate its agreement with BeiGene and paid $150M as an exit fee.
3. Sanofi Terminated its $1.7B Diabetes Agreement with Lexicon
In Nov. 2015, Lexicon signed an exclusive, worldwide license agreement with Sanofi for its dual SGLT 1/2 inhibitor, Zynquista, for diabetes. Lexicon received $300M upfront and was eligible for up to $1.42B in milestones, including accelerated royalties of up to 40%. Lexicon had an option to co-promote in the U.S. for up to 40% in addition to a $100M contribution in Phase II development. In Jul. 2019, Lexicon published Phase III results for Zynquista. Sanofi decided to terminate the agreement and cited that the Zynquista study generated mixed clinical data. Lexicon denied accepting Sanofi’s statement and concluded that Sanofi breached the agreement. Further, Sanofi decided to pay a $260M exit fee.
4. Celgene Terminated its $2.6B mAb Partnership with Jounce
In Jul. 2016, Jounce Therapeutics granted Celgene exclusive, worldwide rights to develop and commercialize mAb JTX211 and 4 early-stage programs. Jounce and Celgene will conduct research over 4 years and can expand to 3 additional 1-year periods. In addition, Celgene has an exclusive option to license JTX4041. Jounce will receive $224M in cash, $36M in its B1 preferred stock in the form of 10.4M shares, and up to $2.3B in milestones, plus option exercise fees. Celgene will lead the commercialization for all programs exercised, excluding JTX4014. Jounce is eligible for 60% of US profits for JTX211, 25% for the first early-stage program, and 50% of the other three. In addition, Jounce is eligible for mid-teens royalties outside the US. If Celgene exercises JTX4014, the companies would sign a separate license agreement to develop a combination therapy under equal rights to develop their respective pipelines and a 50% profit and loss share; otherwise, Celgene would be fully responsible for that development. In January 2019, BMS proposed to acquire Celgene and Celgene terminated this agreement with Jounce after a pipeline review with BMS.
5. MyoKardia Terminated its Development and Commercialization Deal with Sanofi
In Sep. 2014, MyoKardia granted Sanofi exclusive, worldwide rights to develop and commercialize 3 programs for genetic heart disease. Two programs focused on hypertrophic cardiomyopathy (HCM) and the other for dilated cardiomyopathy. In Jan. 2019, MyoKardia regained worldwide rights to mavacamten and MYK-491. Sanofi paid $230M to MyoKardia over the course of the agreement.
6. Novartis Discontinued the Development of MorphoSys ’ MOR106 Candidate
In Jul. 2018, MorphoSys and Galapagos granted Novartis exclusive, worldwide rights to develop and commercialize mAb candidate MOR106 for atopic dermatitis and additional skin disorders. MorphoSys and Galapagos received $111M up front and were eligible for up to $1B in milestones, plus royalties of up to the low twenty percent range. MOR106 is a mAb developed by MorphoSys and Galapagos in 2008 where the companies share profit equally. In Oct. 2019, the companies terminated their P-II IGUANA trial following an interim analysis, which showed a lack of efficacy and a low possibility to achieve its primary endpoint.
7. Hanmi Terminated its Metabolic Disorder Agreement with Janssen
In Nov. 2015, Hanmi granted Janssen exclusive, worldwide rights to develop and commercialize oxyntomodulin-based therapies, including HM12525A, for the treatment of diabetes and obesity. Hanmi received $105M up front and was eligible for up to $810M in milestones, plus royalties. Janssen terminated the agreement in Jun. 2019 after reviewing data from the Phase II obesity trial.
8. Sanofi Terminated its Option Agreement with Voyager for VY-AADC01, VY-FXN01, and VY-HTT01
In Feb. 2015, Voyager granted Sanofi Genzyme an exclusive option to license worldwide ex-US rights to develop and commercialize its gene-therapies VY-ADC01, VY-FXN01, and VY-HTT01 for neurological indications. Voyager received $65M in cash, $30M in equity, an additional $5M in fair value, and was eligible for up to $745M in milestones. In 2017, Sanofi suspended the development of VYADC following Voyager turning down efforts to co-commercialize in the US, and in Jun. 2019, Sanofi terminated the agreement.
9. Novartis Terminated its Agreement with Conatus
In Dec. 2016, Conatus granted Novartis exclusive, worldwide option rights to develop and commercialize orally active pancaspase inhibitors as monotherapy or in combination with Novartis products. Conatus received $50M up front, a $7M option exercise fee, $15M in the form of convertible permission notes, and is eligible for up to $650M in milestones, plus royalties. Conatus had the option to co-promote in the US and share profit equally in exchange for US royalties with the reduction in ROW royalties. Novartis would contribute 50% of the Phase IIb emricascan development costs which cover the ENCORE-PH trial for NASH fibrosis, POLIHCVSVR trial for post-transplant HCV fibrosis and cirrhosis, and ENCORE-NF trial for NASH fibrosis. In May 2017, Novartis exercised its option and Conatus received a $7M option exercise fee plus $15M convertible note. On Sep. 30, 2019, the Phase II trial of emricascan in NASH therapy failed to achieve its primary endpoint and Novartis terminated the agreement with Conatus. Novartis agreed to pay up to $150,000 in clinical trial expenses in 2020.
10. Hanmi Pharmaceutical Terminated its Development and Commercialization Deal with Eli Lilly
In Mar. 2015, Hanmi Pharmaceutical granted Eli Lilly rights outside of China, Hong Kong, Taiwan, and Korea to develop and commercialize its BTK inhibitor, HM71224, for the treatment of autoimmune and other immunological diseases. Hanmi received $50M up front and was eligible for up to $640M in development, regulatory, and sales milestones, plus double-digit royalties. In Feb. 2018, Eli Lilly discontinued the Phase II development of LY3337641 after an interim analysis. On Jan. 23, 2019, Eli Lilly returned the rights to Hanmi Pharmaceutical after the review of all clinical data and the BTK inhibitor market.
1. Eli Lilly Discontinued the Development of Lanabecestat with AstraZeneca
In Sep. 2014, AstraZeneca granted Lilly rights to co-develop and commercialize its small molecule, AZD3293, for Alzheimer’s Disease. Lilly would lead clinical development and AstraZeneca would be responsible for manufacturing AZD3293. AstraZeneca was eligible for up to $500M in milestones. The partners shared costs and profits 50/50. The partners formed a second deal in 2016 for the antibody, MEDI1814, for Alzheimer’s. On Jun. 12, 2018, AstraZeneca and Eli Lilly discontinued Phase III development of lanabecestat, which effectively terminated this deal.
2. Biogen Terminated its $1B Partnership with AGTC
In Jul. 2015, Applied Genetic Technologies granted Biogen exclusive, worldwide rights to its preclinical and clinical gene therapy candidates for the treatment of ophthalmic disease. In addition, Biogen had the option to license 2 early-stage discovery programs for ophthalmic disease and 1 program for non-ophthalmic disease. AGTC received $94M and Biogen invested $30M in equity at 20.63/per share. Additionally, AGTC was eligible to receive up to $472.5M in milestones for 2 lead programs and up to $592.5M for discovery programs, plus royalties. In Dec. 2018, Biogen terminated the agreement following the failure of the gene therapy trial.
3. Amgen Terminated its Agreement with Advaxis
In Aug. 2016, Advaxis granted Amgen exclusive, worldwide rights to develop and commercialize its preclinical Immunotherapy, ADXS-NEO, for cancer. Advaxis will receive $65M up front, including $25M in its common stock, and is eligible for up to $475M in milestones, plus single digit to mid-double digit royalties. In December 2018, Amgen terminated the agreement with Advaxis following their internal portfolio review.
4. Servier Terminated its Agreement for E-3810 with Ethical Oncology Science
In Oct. 2012, Ethical Oncology Science (EOS) granted Servier exclusive, worldwide rights excluding China to develop and commercialize VEGFR-1-3 inhibitor E-3810 for the treatment of cancer. E-3810 is currently in a Phase II/III study. EOS is eligible to receive up to €45 (approx.$58M) in total undisclosed upfront and milestone payments, plus royalties. In October 2018, Servier notified Clovis Oncology, the holding entity of Ethical Oncology Science, of its intention to terminate the agreement.
5. Janssen Terminated its Agreement with Aduro Biotech
In Oct. 2014, Aduro granted Janssen exclusive, worldwide rights to develop its AD741 gene therapy for the treatment of prostate cancer. Aduro was eligible to receive up to $365M in milestones. Additionally, in 2014, Aduro licensed its GVAX prostate cancer vaccine and to generate revenue of up to $2M. In Nov. 2014, Aduro expanded the agreement with Janssen for the development of LADD product ADU214 for an additional $847M in potential payments. Aduro received $12M up front for ADU714, $30M for ADU214, and $0.5M for the GVAX prostate cancer vaccine. In 2015, Aduro received a $22.4M milestone payment. In Sep. 2018, Janssen terminated the agreement.
6. Servier Terminated its GeNeuro Agreement for Multiple Sclerosis
In Dec. 2014, GeNeuro granted Servier an exclusive option to license GNbAC1 worldwide ex-US and Japan rights to its treatment of multiple sclerosis. GeNeuro holds responsibility for the development until Phase II, Servier had an option of further development and commercialization. GeNeuro received $47M up front and was eligible for up to $408M in milestones, plus royalties. Servier acquired a minority stake in GeNeuro. In addition, GeNeuro received up to $40M in milestones from Servier on completion of the Phase II study. In Mar. 2018, GeNeuro regained worldwide rights to GNbAC1 following Servier’s strategic decision to terminate.
7. Teva Terminated its Agreement with Xenon for Pain Medication
In Dec. 2012, Xenon granted Teva exclusive, worldwide rights to develop and commercialize XEN402 for the treatment of various pain disorders. Xenon received $41M up front and was eligible for up to $335M in development, regulatory, and sales milestones. In Mar. 2018, Teva terminated the agreement after XEN402 failed to meet its primary endpoint in a Phase II study.
8. Teijin Terminated its Agreement with Versartis
In Aug. 2016, Versartis granted Teijin exclusive rights to develop and commercialize its recombinant fusion protein, somavaratan, for somatotropin deficiencies. Versartis received $40M up front and was eligible for up to $125M in milestones, plus royalties. In Jan. 2018, Teijin Pharma terminated the agreement after the Phase III clinical study of somavaratan failed to meet its primary endpoint.
9. Janssen Biotech Terminated its Agreement with Geron
In Nov. 2014, Geron granted Janssen exclusive, worldwide rights to develop and commercialize its telomerase inhibitor, Imetelstat, for the treatment of cancer. Imetelstat is a modified oligonucleotide once viewed as a potential blockbuster. Geron received $35M up front was eligible for up to $900M in milestones, plus royalties. In Sep 2018, Janssen Biotech announced its decision to terminate the agreement following a strategic portfolio evaluation and prioritization.
10. BMS Terminated its Agreement with Rigel for TGF beta
In Feb. 2015, Rigel Pharmaceuticals granted BMS exclusive, worldwide rights to develop and commercialize its small molecule TGF beta receptor kinase inhibitor, including its library for immuno-oncology indications. Rigel received $30M up front and was eligible for up to $309M in milestones, plus royalties. In Jul. 2018, BMS discontinued preclinical development of the small molecule.