Staff Writer

Cardiome Pharma Corp. partnered its late-stage antiarrhythmic agent with Fujisawa Healthcare Inc. in a $68 million deal covering the development and marketing of the product in North America.

Fujisawa, of Deerfield, Ill., will co-develop RSD1235 with Vancouver-based Cardiome as an intravenous formulation to treat atrial fibrillation and atrial flutter. If approved, Fujisawa would market it in North America. Cardiome retains rights elsewhere for the intravenous version, and global rights for the oral version of the product.

"Fujisawa from the very beginning was very high on our list [as a partner] because we knew they had a very strong in-hospital franchise that was based in the cardiovascular arena," Cardiome's president and CEO Robert Rieder said in a conference call Thursday.

Fujisawa has a 70-person sales force that sells cardiovascular drugs and anti-infectives to hospitals. Rieder said the intravenous and oral versions of the drug are "quite distinct physiological applications" and are "very distinct marketing applications." The company would likely seek a larger pharmaceutical company to partner with for the oral version of RSD1235.

Cardiome will receive an up-front payment of $10 million and has the right to place $4 million of equity with Fujisawa at a premium at any time over the next 12 months.

"This equity option is entirely at Cardiome's discretion," said Sheila Grant, vice president of commercial affairs at Cardiome.

The company also is eligible for up to $54 million in milestone payments, about two-thirds of which will come from hitting development milestones, and the other third will come from commercial milestones.

Fujisawa will be responsible for 75 percent of all future clinical development costs, while Cardiome will cover the rest.

"This is actually retroactive to the start of the Phase III," Grant said in the conference call, "so we will be getting reimbursement on any costs incurred."

Fujisawa will be responsible for the development plan, new drug application and the commercial manufacturing, marketing and sale of RSD1235, while development activities will be jointly managed between the two companies. Cardiome will manage the ongoing Phase III trial and the manufacturing of clinical supplies. It would receive royalties.

Cardiome began patient dosing in August in a Phase III program for RSD1235. The ACT 1 (atrial fibrillation conversion trial 1) study is measuring the compound's safety and efficacy in 420 patients. The placebo-controlled study will be conducted in 45 centers in the U.S., Canada and Scandinavia. (See BioWorld Today, May 15, 2003.)

The treatment is designed to selectively block ion channels in the heart known to be active during atrial fibrillation episodes. The company expects the costs of co-development to be around $35 million. Phase III trials should be completed within three years.

Cardiome's stock (OTCBB:COMRF) closed Thursday at $3.90, down 15 cents.