Cephalon, Inc. (CEPH) recently announced the completion of its acquisition of biotechnology company Ception Therapeutics, Inc. With this acquisition, Cephalon will gain access to Ception’s lead product, Cinquil (reslizumab), an investigational humanized monoclonal antibody (mAb) against interleukin-5 (IL-5).
Earlier this year, Ception reported positive results on Cinquil from a phase II study that was conducted in adults with eosinophilic asthma. Results showed that Cinquil improved asthma control in adult patients with moderate to severe asthma and eosinophilic airway inflammation. Moreover, Cinquil also achieved statistical significance compared to placebo in an analysis of FEV1, which is a measure of lung function.
Based on these results, Cephalon decided to exercise its option to acquire Ception. The company intends to move the candidate into phase III studies for the treatment of eosinophilic asthma.
This deal will allow Cephalon to expand into the biologics market. Besides Cinquil, Ception has other biologics, peptides and small molecule compounds in its portfolio that should help boost Cephalon’s pipeline. Cephalon currently has six biologic candidates in its pipeline that are being developed for inflammatory diseases and cancer.
Over the past few quarters, Cephalon has been looking to expand into new therapeutic areas to drive long-term growth. Besides the recently concluded Ception acquisition, Cephalon has not only acquired biopharma company, Arana Therapeutics, it has also acquired rights to Lupuzor from ImmuPharma for the treatment of systemic lupus erythematosus.
Cephalon also signed an option agreement to buy the assets of BioAssets Development Corporation. This deal will help Cephalon advance the development of its tumor necrosis factor inhibitor.
In addition to building a presence in new therapeutic areas, Cephalon is also looking to enter the generics business through its plans to acquire Swiss generic company Mepha AG.
We currently have a Neutral recommendation on Cephalon. We expect investor focus to remain on the successful launch of Nuvigil and the performance of Cephalon’s emerging oncology pipeline.
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