Pfenex is built on a platform that uses a high throughput robotically-enabled approach to build and test thousands of protein production strains in parallel. Using the platform, Pfenex is aiming to make and characterize complex proteins while cutting the time and money it takes to develop and produce them.
The platform, which Pfenex frames as an alternative to existing approaches that use trial and error to select strains, has attracted the attention of multiple drugmakers, leading to deals with companies including Alvogen, Jazz Pharmaceuticals, Merck & Co and Serum Institute of India.
Now, Ligand has decided it likes the platform enough to buy Pfenex outright. Once the deal closes, Pfenex’s protein expression platform will slot into a portfolio of Ligand technologies that facilitate the production of therapeutic antibodies, the expression of recombinant proteins and other tasks key to the development and manufacture of medicines.
Ligand plans to use the platform to secure additional licensing deals in the coming years. Until those deals start to materialize, Ligand will rely on Pfenex’s existing agreements to generate a return on its investment.
In October, the US Food and Drug Administration (FDA) approved Pfenex’s teriparatide, a follow-on biologic referencing Eli Lilly’s blockbuster osteoporosis drug Forteo. Alvogen is handling the launch and will give Pfenex a 40% or 50% gross profit split on sales.
The split Pfenex will receive depends on whether the FDA rates teriparatide, also known as PF708, as therapeutically equivalent to Forteo. Securing the designation may enable the automatic substitution of teriparatide for Forteo, which would boost Alvogen’s attempt to win market share.
Other payments are tied to the designation. Investors in Pfenex will receive an additional $78 million from Ligand if the FDA rules that teriparatide is therapeutically equivalent to Forteo by end of next year.
The timing of the decision could also trigger a payment from Alvogen to Pfenex. If the FDA grants teriparatide a therapeutic equivalence designation by October 4, Alvogen will pay Pfenex $15 million. The figure falls to $7.5 million after that date and to zero if Pfenex receives the designation after October 4, 2021.
Pfenex ran a comparative use human factors study to show equivalence and submitted the results to the FDA in October. According to Pfenex, the study showed the user interface of teriparatide “was noninferior to that of Forteo for each critical user task.”