Cubist moves to buy Calif. drug maker
Deal could cost up to $402.5m
Cubist Pharmaceuticals Inc., leaping into the biotech deal-making bazaar, is set to disclose today that it will spend up to $402.5 million to buy a California company that is developing an antibiotic to fight so-called superbugs.
Cubist, a Lexington therapeutics company, already markets an antibiotic, Cubicin, to battle infections caused by the methicillin-resistant Staphylococcus aureus (MRSA) bacteria. Now it has agreed to pay $92.5 million cash - and as much as $310 million more in future milestone payments - to acquire two-year-old Calixa Therapeutics of San Diego, which is testing an antibiotic called CXA-201 to treat complicated urinary tract and intra-abdominal infections.
“It’s right in our sweet spot, right in our strike zone,’’ said Michael W. Bonney, president and chief executive of Cubist.
The deal continues a flurry of buyout activity in the biotechnology industry.
Last week, Gloucester Pharmaceuticals Inc., of Cambridge, agreed to be purchased by the drug maker Celgene Corp. for $340 million in cash and up to $300 million in milestone payments. Another Cambridge biotech, Merrimack Pharmaceuticals Inc., bought Hermes Biosciences Inc., of South San Francisco, Calif., for an undisclosed sum.
With the Cubist deal, there have been more than 90 mergers and acquisitions involving US biotechs this year, compared to 84 last year, according to the research firm Thomson Reuters.
Cubist’s agreement to buy Calixa already has been approved by the boards of both companies, and Bonney said he expects to complete the transaction by the end of the month.
Calixa, which purchased the rights to CXA-201 from Japan’s Astella Pharma Inc. and has farmed out much of the development and clinical work to contract researchers, has seven employees, in San Diego and San Francisco. Bonney said Cubist and Calixa are discussing whether the employees will remain in California or join the Cubist staff in Lexington.
“We’ve opened a new chapter in the Cubist story,’’ Bonney said. “Their product fits in beautifully with what we know how to do so well, which is to fight these multi-drug-resistant strains.’’
Cubist employs about 600 people worldwide, including 370 in Massachusetts.
Calixa, which is backed financially by a consortium of venture capital firms led by Domain Associates, of Princeton, N.J., has its CXA-201 drug in Phase 2 clinical trials, focused on complicated urinary tract and intra-abdominal infections.
Cubist plans to take over management of Calixa’s clinical trials and extend them to treat nosocomial pneumonia, also known as hospital-acquired pneumonia. It plans to file a new drug application for CXA-201 with the Food and Drug Administration by the second half of 2013.
The acquisition could strengthen Cubist’s pipeline as it faces challenges on two fronts. Early this month, Cubist said it had stopped enrolling patients in trials of a drug intended to reduce bleeding during heart surgery because of deaths among patients that took the drug. Bonney said Cubist will be analyzing data collected in the trials and decide whether to go forward with the drug, initially developed by its partner, Dyax Corp. of Cambridge.
Cubist is also pressing a patent suit against Teva Parenteral Medicines Inc. of Israel, which is developing a generic version of Cubist’s primary drug, Cubicin. A trial has been set for April 25, 2011, four months before the FDA could rule on Teva’s application to sell its generic drug in the United States.
Robert Weisman can be reached at email@example.com.