SHANGHAI – A new licensing deal is giving Taiwan’s Taigen Biotechnology Co. inroads into the large Russian market just as the parent company’s shares started trading in Taiwan.

On Jan. 17, Taigen announced that Taigen Biopharmaceuticals Holdings Ltd. began trading on the Taiwan Gretai Securities Emerging Stock Market (4157.TWO). The company sold 22 million shares through the initial public offering (IPO) to raise NT$1.1 billion (US$36.4 million). With 696 million shares outstanding, the company is valued at NT$36 billion.

Taipei-based Gretai Securities Market serves the over the counter (OTC) market and conducts bond trading. Bookrunners for the IPO were KGI Securities and Sinopac Securities.

Taigen raised $131 million in investment capital since its inception in 2001. Pre-IPO, the company listed principle shareholders to include the government’s Taiwan’s National Development Fund, Yuen Foong Yu (YFY) Group and China Development Industrial Bank.

Last year, Taigen posted revenues of $2.31 million, a 73 percent increase from the year previous.

The financial proceeds from the float will help advance the three drugs in Taigen’s pipeline: Taigexyn (nemonoxacin), Burixafor (TG-0054) and TG-2349.

Nemonoxacin is a broad-spectrum antibiotic treatment for bacterial infections including those caused by drug resistant bacteria. Burixafor mobilizes stem cells for leukemia patients while TG-2349 is a hepatitis C virus protease inhibitor for chronic HCV infection.

The IPO was bolstered by Taigen’s series of announcements for nemonoxacin, specifically a non-fluorinated quinolone antibiotic to be marketed under the trade name Taigexyn.

In an announcement on Jan. 15, Taigen licensed the rights for Taigexyn to R-Pharm, of Moscow, to cover the territory of Russia, Turkey and other members of the Commonwealth Independent States (CIS).

Under terms of the deal, Taigen will receive a down payment, milestone payments and royalties. R-Pharm will have exclusive rights to nemonoxacin for 15 years and will be responsible for the development, registration and commercialization along with covering the associated costs. Financial details were not disclosed as per a non-disclosure agreement signed with R-Pharm.

“We are impressed with R-Pharm’s commitment and enthusiasm for nemonoxacin,” Peter Tsao, vice president for business development, told Bioworld Asia.

R-Pharm has expertise in anti-infectives and strong distribution channels noted Tsao. R-Pharm’s 2013 revenues were $1.8 billion.

WHY RUSSIA?

Russia is a growing pharmaceutical market, considered the 11th largest by IMS Health, while Turkey is 17th.

“The Russian Federation and Turkey are among the world’s top 20 pharmaceutical markets and their growth in the next five years will outpace the U.S., EU and Japan, according to IMS. Both countries also have a very high incidence of drug-resistance bacterial infections,” said Ming-Chu Hsu, president and CEO of Taigen.

Taigen has said the pharmaceutical markets in the countries included in the deal are worth about $36 billion a year.

The company also is seeking approval for nemonoxacin in the U.S. In December, the U.S. FDA granted Taigexyn fast-track designation and qualified infectious disease product status for community-acquired bacterial pneumonia (CAP) and acute bacterial skin and skin structure infections (ABSSSI).

Taigen expects these important designations will speed the development of nemonoxacin as a new antibiotic, with the possibility of additional five-year new chemical entity (NCE) market exclusivity, priority review, and fast track status provided under the Generating Antibiotic Incentives Now (GAIN) act.

Meanwhile, Taigen has said the drug is on track to first launch in China. The company expects the drug to be marketed first on the mainland in 2014, with approval in Taiwan to follow in 2015. Taigen is the first to file the same new drug application in both countries, a milestone in regulatory harmonization. (See BioWorld Today, June 12, 2013.)

In 2012, Taigen signed a China licensing deal for nemonoxacin with Zhejiang Medicine Co. Ltd. (ZMC), for $8 million up front and 7 percent to 11 percent in future sales of the drug. ZMC, a publicly listed antibiotics manufacturer, has exclusive rights to mainland China for 20 years.

Taigen can expect to receive from ZMC royalty payments in the range of $1 million to $5 million in addition to sales royalties.

Taigen first in-licensed the Asian rights for nemonoxacin from Proctor & Gamble Pharmaceuticals, later acquired by Warner Chilcott. Taigen then obtained the global patent rights from Warner Chilcott in late 2011.

This follows a trend of Taiwanese companies to acquire, develop and then transfer rights to novel drugs. (See BioWorld Today, June 12, 2013.)

THE ADVANTAGES: ORAL ADMINISTRATOIN, NO FLUORINE

According to Tsao, nemonoxacin has distinct advantages as a novel non-fluorinated quinolone. Unlike most of the quinolones on the market, it does not contain fluorine in its chemical structure.

The drug can be administered either orally or intravenously, which facilitates the transition from hospital to outpatient care.

In the clinical trials conducted thus far, nemonoxacin has shown activity against drug-resistant bacteria such as methicillin-resistant Staphylococcus aureus (MRSA) and quinolone-resistant MRSA as well as quinolone-resistant Streptococcus pneumoniae.

In addition to its superior activity against drug resistant pathogens, nemonoxacin also has a better side effect profile and a lower propensity for resistance development compare to its competitors, stated Yeager.