Halozyme Therapeutics Inc. could earn up to $47 million in its latest deal with Baxter International Inc., which aims to develop a subcutaneous version of Gammagard, Baxter's intravenous immune globulin (IVIG) product approved for primary immunodeficiency disorders.

The deal involves the use of Halozyme's Enhanze technology, a drug delivery platform based on recombinant human hyaluronidase (rHuPH20), a synthetic enzyme that temporarily breaks down hyaluronic acid in skin tissue to allow penetration and diffusion of drugs and biologics. Essentially, it works by clearing space in the tissue matrix to increase absorption of injected drugs.

"What it does is open up a pathway for subcutaneous administration," said David Ramsay, chief financial officer for San Diego-based Halozyme, about the technology. The goal is to be able to deliver Gammagard subcutaneously, improving overall dispersion of the therapy and making it more convenient for patients.

Marketed as Kiovig in Europe, Baxter's Gammagard Liquid 10 percent is a large-molecule product made from human plasma. It's indicated to treat primary immunodeficiency disorders associated with a number of immune system defects, such as congenital X-linked agammaglobulinemia, common variable immunodeficiency, Wiskott-Aldrich syndrome and severe immunodeficiencies.

Under the collaboration terms, Halozyme will receive $10 million up front, with the potential to bank up to $37 million in regulatory and sales milestones. Baxter will be responsible for all costs associated with development, manufacturing and marketing, while Halozyme will supply rHuPH20 for the Enhanze technology. Upon approval, Halozyme would be entitled to an undisclosed royalty on product sales.

The deal represents "more validation for our technology," Ramsay told BioWorld Today, as the company forms a "deeper and broader relationship with Baxter."

Halozyme began working with the Deerfield, Ill.-based firm in 2004, when it signed a marketing and distribution deal for a recombinant human hyaluronidase enzyme product in development as a spreading agent. The companies gained marketing approval in 2005 for Hylenex for use to increase the absorption and dispersion of other injected drugs. Baxter now is conducting Phase IV studies and preparing marketing and sales teams for a full market launch of the product.

Earlier this year, Halozyme and Baxter expanded the Hylenex agreement to include the drug's use with small-molecule drugs from Baxter. That deal carries a potential value of $65 million for Halozyme, including an up-front payment of $10 million and a $20 million equity investment. (See BioWorld Today, Feb. 15, 2007.)

Baxter isn't the only firm interested in Halozyme's drug delivery technology. Late last year, the firm signed F. Hoffmann-La Roche Ltd. to a collaboration deal involving the use of Enhanze with undisclosed large-molecule drug candidates. Roche agreed to pay Halozyme $20 million up front, plus $11 million in equity, and up to $11 million in milestones for the first three targets. Beyond that, Roche has options for 10 additional targets, which could total $47 million in milestones per target. (See BioWorld Today, Dec. 7, 2006.)

In addition to its work with partners, Halozyme continues to work on its development pipeline. The company hopes to complete enrollment in a Phase I/IIa study of Chemophase this quarter, Ramsay said. Also based on the hyaluronidase platform, Chemophase is a chemoadjuvant aimed at improving the delivery of chemotherapy to previously chemo-refractory tumors in patients with solid malignancies that accumulate hyaluronic acid. Halozyme is looking to file an investigational new drug application in the first half of next year for a product in its "Improve" program, which is designed to co-formulate rHuPH20 with an existing small molecule, followed by an IND from its "Innovate" program, which develops new molecular entities targeting the extracellular matrix.

Halozyme recorded a net loss of $4.8 million, or 7 cents per share, for the second-quarter. As of June 30, the company had cash totaling $44.2 million.

Its shares (NASDAQ:HALO) closed at $9.41 Monday, up 34 cents.