BioWorld Today Contributing Writer

Powerful multidrug cocktails are critically important for battling multidrug-resistant tuberculosis (TB). Industry is working hard to develop new drugs that will not only work well individually, but synergistically, creating an effect where the whole is more than the sum of the parts.

Sequella Inc., of Rockville, Md., has a great team player in its investigational drug SQ109, and a group of Russian venture capitalists, Maxwell Biotech Venture Fund, has acquired rights to develop it in one of the world's largest markets for TB.

"We believe that this reflects the very first actual deal for TB with industry standard terms in decades," Alan Klein, executive vice president of corporate development at Sequella, told BioWorld Today.

According to Klein, past transactions around TB have involved nonprofit organizations. The deal with Maxwell represents a shift where companies are not only trying to develop a promising product to meet a critical health need, but have clear expectations of making a profit by doing so.

The licensing agreement will give the Moscow-based group the right to develop and commercialize SQ109 in the Russian Federation and Commonwealth of Independent States including Armenia, Azerbaijan, Belorussia and others.

In exchange, Sequella will receive an equity investment, milestone payments and royalty payments upon successful commercialization. Maxwell also will purchase its clinical trial supply of SQ109 from Sequella. The overall deal has a potential value of $50 million for Sequella.

Klein said that Maxwell will set up a subsidiary company called Infectex to carry out the development work for SQ109 in Russia and surrounding territories. SQ109 will be a flagship product for Infectex, and the company will seek out additional complementary products.

Sequella did not disclose the amount of the equity investment made by Maxwell. Klein said, "We can share that the deal is a very good one for both parties."

Russia and countries in the Commonwealth of Independent States are among about 22 countries designated high burden for TB by the World Health Organization. Russia has more than 150,000 active cases of TB each year, and 43,000 are multidrug-resistant.

Sequella estimated the Russian market for antituberculin drugs at more than $150 million per year, with total TB control costs ranging over $1 billion a year.

Although the high burden countries, especially Russia, have larger numbers of cases and consume a larger number of drug doses, the U.S., Europe and Japan are the largest markets overall in terms of dollars spent per patient treating the disease.

"The number of cases is not as prevalent as some other parts of the world, but the actual market size for a tuberculosis drug is much higher there because of the health care costs put in to the system to treat everybody with tuberculosis," Klein noted. "Our biggest markets from a sales perspective are still the U.S., Europe and Japan."

Sequella retains its development and commercialization rights for SQ109 in those high sales markets, as well as other high burden markets such as Africa, some parts of Asia and some parts of South America.

Klein said SQ109 has attracted interest from Maxwell because it works well synergistically with existing drugs as well as some other drugs in development. "We think the fact that it could work and play well with so many different types of molecules makes it an extremely important asset going forward," Klein explained.

TB will always be a disease that is treated with more than one drug, and therefore it's important for candidates to have synergistic effects with other drugs. If SQ109 succeeds in clinical trials and is approved, it will likely either be given in combination with the current standard-of-care, four-drug therapy or it will replace one or more of the drugs in that cocktail.

Another possible postapproval scenario is for SQ109 to be combined with other newly approved drugs to create a new, more effective cocktail. The goal is develop a regimen that will be effective both for first-line therapy for drug-sensitive TB as well as salvage therapy for drug-resistant TB, and everything in between.

The current standard-of-care therapy for TB involves rifampin, isoniazid, pyrazinamide and ethambutol. The community of companies developing new drugs for TB includes most of the major pharmaceutical companies and quite a number of biotechs. However, the multidrug nature of therapy makes it "a collaboration more than a competition," according to Klein.

Large players in the space included Otsuka Pharmaceutical Development Co. Ltd., Johnson & Johnson, Pfizer Inc., GlaxoSmithKline plc, AstraZeneca plc and Sanofi-Aventis Group.

Sequella, like its product SQ109, has a history of playing well with others. SQ109 was co-discovered by Sequella scientists and investigators at the National Institutes of Health. A collaboration with Tibotec Pharmaceuticals Inc., a division of Johnson & Johnson, to combine SQ109 with Tibotec's TMC207, recently produced results showing that the SQ109 decreased the TMC207 inhibitor concentration fourfold to eightfold for the etiologic agent of TB. It also improved the rate of killing of TB bacteria compared to each drug alone and extended the drug post-antibiotic effect by four hours.

In addition to SQ109, Sequella's pipeline includes clinical programs for duodenal ulcers caused by H. pylori, and additional preclinical programs in tuberculosis, C. glabrata fungal infections, Crohn's disease, non-TB pneumonia and C. difficile.