Washington Editor

The holiday season is coming early to BioCryst Pharmaceuticals Inc., which could earn more than half a billion dollars per terms of a just-announced licensing deal with F. Hoffmann-La Roche Ltd.

"We've always stated that we wanted to develop an asset to a point of high-value inflection, and then move it to a partnering opportunity where we still retain a significant portion of that value," said Randall Riggs, BioCryst's vice president of business development. "And that's exactly what we've done, or actually even better, because we're at Phase I."

The news sparked a 37.5 percent increase in the Birmingham, Ala.-based company's shares (NASDAQ:BCRX), which gained $4.43 on Wednesday, to close at $16.24.

The exclusive agreement centers on its Phase I compound for transplant rejection and autoimmune diseases, BCX-4208. Most recently, multiple oral doses of the product have been tested in a Phase Ib trial that comprised 39 healthy volunteers to evaluate its safety, tolerability and pharmacokinetics, a follow-up to a Phase I study that tested ascending single oral doses in 84 healthy volunteers. Both trials and animal studies have established a "wonderful side-effect profile" for the transition-state purine nucleoside phosphorylase (PNP) inhibitor, Riggs told BioWorld Today.

Roche, of Basel, Switzerland, is getting worldwide rights to develop and commercialize BCX-4208, which is thought to have a potent ability to modulate T-cell activity. Going forward, the pharmaceutical giant is responsible for all clinical work and regulatory activities, though BioCryst will have a word in development directions and study designs with equal representation on joint development and steering committees.

Roche's access is costing $25 million in an up-front payment to BioCryst, as well as a $5 million reimbursement payment for supply of material during the first two years of the collaboration. Future milestone payments could reach $530 million, in addition to royalties on product sales of BCX-4208. For five years, Roche will have a right of first negotiation on existing backup PNP inhibitors in transplant rejection or autoimmune diseases.

Riggs said the deal's potential high value stems from BCX-4208's "enormous opportunity upside" in a pair of indications that represent large-market prospects.

In transplantation, it could follow a path already blazed by Roche's Cellcept (mycophenolate mofetil), which Riggs said loses patent protection in five years. "Our product would be a very nice fit as a continuation of their leadership in that field," he added.

In autoimmune diseases, it could become a new treatment for psoriasis, rheumatoid arthritis, Crohn's disease and multiple sclerosis, which Riggs said are "unmet medical need markets." He also pointed out that BCX-4208's proof of principle has been laid out by Fodosine (BCX-1777), another PNP inhibitor that is about to enter pivotal development in oncology.

"Roche is the leader in transplantation with Cellcept, and they have demonstrated over the years that they have a continued long-term commitment for those patients," Riggs added. "For autoimmune, they have already put forth a lot of effort in their pipeline to bolster that area, as well as a recent study that showed that Rituxan (rituximab) is good for rheumatoid arthritis as well. So it's a very, very good fit."

He also said he expects Roche to adhere to a previously disclosed time frame for advancing BCX-4208 into Phase II for psoriasis within the first half of next year.

For BioCryst, in addition to the financial upside the deal's terms provide, it also retains the right to co-promote the compound in the U.S. for several indications. And any new PNP inhibitor the company discovers going forward will be exempt from that agreement, meaning BioCryst will retain all rights to such compounds.

The company licensed BCX-4208 and other PNP inhibitors from Albert Einstein College of Medicine at New York's Yeshiva University and Industrial Research Ltd. in Auckland, New Zealand, and will owe sublicense payments to these third parties on the up-front payment, future event payments and any eventual royalties.

Atop its pipeline beyond BCX-4208 is Fodosine, which is in a Phase IIa study for T-cell lymphoma and Phase I for cutaneous T-cell lymphoma. Its clinical development program also includes studies for chronic lymphocytic leukemia and B-cell leukemia.

Beyond cancer, the company's portfolio has gained recent attention for its antiviral agent peramivir, which could work against the H5N1 strain of bird flu. BioCryst recently submitted an investigational new drug application to the FDA to test injectable formulations of the neuraminidase inhibitor.

In addition, the company has preclinical programs to address hepatitis C virus and the tissue factor/factor VIIa complex that relates to blood clots and inflammation.

"To me, BioCryst is a hidden gem," Riggs said, "because we have such a strong pipeline for such a small company."