While wrapping up a Phase I/II trial with ARX201, Ambrx Inc. exclusively licensed the pegylated recombinant human growth hormone (HGH) to Merck Serono SA.

Kevin Eastwood, vice president of corporate development at Ambrx, said the deal was "built around ARX201" but also includes the use of Ambrx's proprietary ReCODE pegylation technology to create backup molecules in the HGH space.

In exchange for worldwide development and commercialization rights to ARX201 and the rest of the HGH program, Geneva-based Merck Serono will pay San Diego-based Ambrx an undisclosed up-front fee as well as potential clinical, regulatory and commercial milestone payments. Ambrx retains the option to co-promote any resulting products in the U.S., sharing both costs and profits with Merck Serono, but otherwise will receive a royalty on net product sales worldwide.

Eastwood declined to elaborate on the financials of the deal but said Ambrx was "very pleased Merck Serono was open-minded regarding the co-promotion."

ARX201 is Ambrx's most advanced product candidate and the test case for its ReCODE (reconstituting chemically orthogonal directed engineering) technology. While pegylation can be used to create longer-acting protein-based drugs, current approaches are limited by their dependence on lysine to attach the poly(ethylene) glycol (PEG), Eastwood explained. Ambrx has created non-naturally occurring, chemically unique amino acids, which it uses to attach the PEG at specific sites on the protein. That precise spatial positioning of the site of attachment may allow for less-frequent dosing as well as improved pharmacological and pharmacodynamic performance.

A long-acting growth hormone fits nicely into Merck Serono's pipeline, which includes the growth hormone injection Saizen (somatropin [rDNA origin]). Saizen generated $209 million in sales last year. Merck Serono markets the "one click" auto-injector pen and the "cool click" needle-free delivery system to increase compliance, but a version that could be dosed weekly rather than daily could offer a significant market advantage.

Genentech Inc. may have been thinking along those same lines last year when it licensed rights to Altus Pharmaceuticals Inc.'s subcutaneous human growth hormone ALTU-238 after Phase II data showed the drug worked well when dosed once weekly. Genentech markets the once-daily HGH products Nutropin (somatropin) and Nutropin AQ, which together earned $378M in 2006. To get North American rights to ALTU-238, Genentech agreed to pay development and commercialization costs as well as $15 million up front, $15 million in equity and up to $140 million in milestones. Genentech also gained the option to buy worldwide rights for another $110 million, while Altus retained a co-promote option and double-digit royalties. (See BioWorld Today, Dec. 21, 2006.)

Eastwood said Ambrx's deal with MerckSerono had been in the works for more than a year. Merck Serono "surveyed the landscape of next-generation HGH products" and chose ARX201, he said. Ambrx's ex-CEO Martin Mattingly also had ties to Merck Serono through a previous position at CancerVax Corp., which was a Serono partner.

Beyond its HGH program, Ambrx has applied its ReCODE pegylation technology to interferon-alpha, interferon-beta, human granulocyte-colony stimulating factor (GCSF) and undisclosed proteins involved in metabolic disease, cardiovascular disease, inflammation and arthritis.

In late 2005, Ambrx exclusively licensed a subset of its ReCODE pegylated interferon-alpha molecules to F. Hoffmann-La Roche Ltd. in exchange for an equity investment, license fees, research funding, milestone payments and royalties. Internally, Ambrx has continued to advance interferon-alpha molecules outside of that subset and has identified a clinical candidate that Eastwood said demonstrated 10-fold improved activity over Roche's Pegasys (peginterferon alfa-2a) in in vivo and in vitro studies. A lead candidate for the interferon-beta program also has been identified, while the GCSF program is in lead optimization.

Eastwood said Ambrx is "in discussions" with potential partners on the interferon-beta and GCSF programs, but that the company has the money to drive those products into Phase I/II trials. Although he characterized Ambrx as an "IND engine," he said the board also recognizes the value that could be created by retaining rights to a program through Phase II trials.