Janssen/Diamyd Medical – Top 10 biotech deal terminations of 2011

Posted under Blog, Companies, Diagnostics, Diamyd, Funding, Janssen, Medical Devices, Medical Supply, Pharmaceuticals, Startups, Universities, Videos by John Carroll

Partners: Janssen Pharmaceuticals (a subsidiary of J&J)/Diamyd Medical
Based: $JNJ - New Brunswick, NJ; $DMYDY - Stockholm
Termination date: June 2011
Length: 1 year
Deal: $625 million, including $45 million upfront
Program: Diamyd's GAD65-based treatment, a Phase III drug for Type 1 diabetes

What went wrong: J&J jumped on board Diamyd's diabetes bandwagon just as the pivotal European trial was getting under way, a favorite entry spot for the Big Pharma company. In May, when the treatment proved no better than a placebo at preserving beta cell function, Janssen was quick to bail.

Within a few weeks, Diamyd had not only closed the European trial, but it also shuttered a separate Phase III in the U.S. after concluding that the diabetes therapy would do no better on a different continent.

"With all the rights returned to us, we are free to decide on how to extract the most value from GAD65 going forward," said Diamyd CEO Peter Zerhouni at the time. Faced with a total late-stage disaster, though, Diamyd quickly determined that its diabetes-focused Swedish staff would have to go and switched its therapeutic focus to pain--another tough field for developers.