KaloBios Pharmaceuticals (KBIO) slid 16% to $1.61 in after hours trading on the news that Sanofi Pasteur, the vaccines division of French pharma giant Sanofi, killed a collaboration and licensing agreement with the biotech for its phase II drug candidate, KB001-A, targeting infections in patients with cystic fibrosis.
While termination of collaboration like this with a big pharma can often be a killer for a small biotech company, the news wasn’t all bad for KaloBios.The company, which struck the deal with Sanofi in 2010 for an exclusive worldwide license to develop and commercialize biologic KB001-A, said it had completed enrollment of 180 cystic fibrosis patients in the phase II study and will have topline results early in the first quater of 2015, up from the second quarter.
KaloBios also had $64.8 million in cash (as of March 31) that will help it continue clinical studies for the drug, which would treat and prevent pseudomonas aeruginosa infections. In the first quarter, KaloBios spent $7.7 million on research and development.
Under the termination deal, KaloBios agreed to pay Sanofi Pasteur royalties at low single-digit rates on future net sales of KB001-A up to a $40 million cap. If KaloBios finds another partner for KB001-A, it would still have to pay Sanofi 10 percent of sub-license payments, up to another cap of $40 million.
It could be that a new partner will have to be significantly smaller than a giant like Sanofi where this kind of agreement, in the end, might not have moved the needle for the big pharma company.
