In its most significant deal to date, Protherics plc licensed rights to its late-stage sepsis drug candidate to AstraZeneca plc for a potential £195 million (US$341 million).
The London-based company developed its polyclonal antibody CytoFab through Phase IIb trials before it began looking for a partner to handle a large Phase III trial, and the work of neighboring AstraZeneca in the field of anti-inflammatory drugs made it an ideal partner, said Saul Komisar, president of Protherics Inc., the company's U.S. operations based in Nashville, Tenn.
"It's really a transforming event," he said of the licensing agreement. "We've done some deals in the past, but this is the first product we've had in our development pipeline and been able to license that has blockbuster potential."
Shares of Protherics (NASDAQ:PTIL) jumped $5.90 Thursday, or 61.8 percent, to close at $15.45.
For Protherics, the effect of the deal is "multifaceted," Komisar said. For starters, it provides "a nice cash infusion" in the form of a £16.3 million up-front payment, plus a £7.5 million equity investment in cash. The investment, to be paid at 68.24 pence per share, a 30 percent premium to Protherics' average closing price over the past three months, will represent about 4.3 percent of Protherics' total share capital.
"For a company the size of Protherics, you have limited cash, and sometimes you have to put a hold on programs," he said. "So this frees us up to some of the things we want to do."
Some of the initial payments go toward manufacturing CytoFab. Under the deal, Protherics will be responsible for supplying CytoFab for the Phase III trial. The company expects to receive additional payments for supplying commercial amounts of the drug.
After the up-front fees, the company would receive the remaining £171 million upon certain development and regulatory milestones. On top of that, Protherics would get a 20 percent royalty on worldwide sales.
The company, which has spent years developing polyclonal antibodies, already has two products on the market based on the same technology as CytoFab - CroFab, a pit viper antivenom, and DigiFab, a digoxin antidote. But pursuing a drug for the sepsis market is basically going after "the holy grail of the pharmaceutical industry," he told BioWorld Today.
Sepsis is an infection of the blood or organs that in the U.S. affects an estimated 750,000 people annually, with about 30 percent dying from multiple organ failure. But, despite its size, the sepsis market largely is untapped. A number of biotech and pharmaceutical companies have tried and failed to get a sepsis drug candidate through regulatory approval.
Only one product has reached the market - Xigris, sold by Indianapolis-based Eli Lilly and Co. - but it carries a bleeding risk, which restricts its use to only a small percentage of the patient population, Komisar said.
"The good thing about CytoFab is that it's predicated upon the technology that we're already using on a commercial basis," he added, "and we don't see that level of side effects."
A polyclonal antibody, CytoFab is designed to neutralize tumor necrosis factor (TNF)-alpha by binding to multiple sites. Results of an 81-patient Phase IIb study showed that patients treated with CytoFab demonstrated reduced TNF-alpha levels in their blood and lungs, required significantly less mechanical ventilation, and spent less time overall in the critical care unit. The trial also showed a positive survival trend, though a larger study will be needed to determine statistical significance.
While announcing its deal with AstraZeneca, Protherics also reported its earnings for the six months ending Sept. 30. The company posted a loss of £3.7 million, and had a cash position totaling about £6.3 million.
Elsewhere in its pipeline, the company is developing Voraxaze for the control of high-dose methotrexate therapy in cancer. A marketing application has been submitted for the drug in Europe, and Protherics said the FDA confirmed that a biological license application can be filed following further analysis of patient samples. Another product, Prolarix, is in Phase I testing as a selective therapy for liver cancer and other solid tumors.