MedImmune, which already markets Synagis to prevent respiratory syncytial virus in high-risk infants, made another investment in the RSV space by signing a $112 million deal to develop small-molecule compounds discovered by Australian company Biota Holdings Ltd.

The agreement calls for MedImmune to pay $5 million up front, plus reimbursement of all future development expenses, and up to an additional $107.5 million in clinical and regulatory milestones. In exchange, MedImmune will hold exclusive marketing rights in the U.S., Europe, Japan and other countries.

The Gaithersburg, Md.-based company is no stranger to RSV drug development. Its first product, a polyclonal antibody called RespiGam, was approved in 1996. A few years later, MedImmune replaced RespiGam, which had to be administered as a four-hour intravenous infusion, with Synagis (palivizumab), the first monoclonal antibody to gain FDA approval against an infectious disease.

"We're continuing to make strides in RSV development," said Jamie Lacey, MedImmune spokeswoman, adding that the Biota collaboration is "designed to help us evaluate whether small-molecule therapeutics have potential for treating or preventing RSV. It seems a natural fit to our pipeline," she added.

RSV is the most common respiratory infection among infants. Synagis, given by an intramuscular injection once a month during the RSV season, is indicated for the prevention of serious lower respiratory tract disease in high-risk pediatric patients.

"But there are other groups who are also susceptible to RSV," Lacey told BioWorld Today, "such as older children, the elderly and immunocompromised patients."

Since Biota's lead compound could be administered orally, it "may have applicability" in those broader patient groups, though it's too early to tell whether the small-molecules would be efficacious enough against RSV to supplant Synagis as the standard of care, she said.

In the meantime, MedImmune is working on a potential improvement to Synagis. The company completed enrollment this week in a pivotal Phase III study of Numax, another monoclonal antibody, in comparison with Synagis. That study involves 6,600 high-risk infants. A second study, which evaluates Numax in children with hemodynamically significant congenital heart disease, also completed enrollment at more than 620 patients.

"We're hoping, if Phase III is successful, that we can bring [Numax] to the market in 2008," Lacey said.

MedImmune's top-selling drug, Synagis, recorded worldwide sales of $624 million for the first nine months of 2005, with $526 million coming from the U.S. In late August, the company arranged to take over all U.S. sales of Synagis from its marketing partner, Abbott Laboratories, of Abbott Park, Ill., after June 2006. As part of that deal, MedImmune agreed to pay a portion of U.S. sales to Abbott through 2006. If its second-generation product, Numax, does not clear regulatory hurdles by September 2008, MedImmune will make more payments to Abbott for up to two years. (See BioWorld Today, Sept. 1, 2005.)

MedImmune also has an RSV vaccine in early stage development. The vaccine, aimed at preventing RSV and parainfluenzavirus type 3 (PIV-3) is in Phase I. Its intranasal flu vaccine FluMist is approved through Sept. 30 and brought the company $13 million.

MedImmune reported a net income of $6 million, or 2 cents per share, for the first nine months of 2005. As of Sept. 30, it has cash and marketable securities totaling $1.4 billion.

The up-front payment to Biota was not included in MedImmune's previously stated financial guidance for the year - the most recently updated projections anticipate earnings per share in the range of 4 cents to 10 cents. Also not included was the estimated $10 million in recruiting and enrollment costs for the two Numax trials.

Shares of MedImmune (NASDAQ:MEDI) closed at $35.67 Thursday, down 17 cents.

In addition to up-front and milestone payments, Melbourne, Australia-based Biota would be entitled to royalties from any product sales by MedImmune. Biota also retains exclusive marketing rights in Australia, New Zealand, China and Southeast Asia.

Biota has an approved influenza drug, Relenza (zanamivir), sold by London-based GlaxoSmithKline plc, and is developing products to treat human rhinovirus, HIV and hepatitis C.