Associate

Biovitrum AB sprang from Pharmacia Corp., the large pharma company that spun it out in the second half of 2001, establishing Biovitrum as one of Europe's biggest biotechnology companies. Biovitrum said Monday it signed Amgen Inc., the largest biotechnology company on the globe, to a deal with potential financial rewards of pharmaceutical proportions.

"It's really a landmark agreement for us," said Paul de Potocki, senior vice president, commercial operations at Stockholm, Sweden-based Biovitrum. "Both financially for us today and also the future potential."

The agreement is centered on Biovitrum's small-molecule inhibitors of 11beta-hydroxysteroid dehydrogenase 1 and features its lead product BVT.3498. It calls for Amgen to pay $86.5 million up front, to fund a three-year Biovitrum research program on the inhibitors, and to fund and conduct all development and commercialization in the licensed territories that include North America, South America, the European Union, Australia and New Zealand. Product sales would bring Biovitrum tiered royalties.

All of which is great news, but it's the milestones that are particularly eye catching. De Potocki told BioWorld Today that if BVT.3489 is approved in two indications, Biovitrum would receive a total of $435 million in milestone payments.

"The milestones are associated with the first two indications that are metabolic disorders," de Potocki said. "For instance, if the first is diabetes and the second is a metabolic [disorder], we would receive that sum."

BVT.3489 is in Phase IIa trials in Type II diabetes now.

In the deal, Biovitrum gets co-promotion rights for Amgen's rheumatoid arthritis product Kineret (anakinra) in the European Union. Biovitrum will have co-promotion rights in the Nordic region for all products developed under the 11betaHSD1 enzyme inhibitors agreement. Also, Biovitrum would have Nordic co-promotion rights for Amgen's investigational products, cinacalcet hydrochloride for hyperparathyroid conditions and palifermin for oral chemotherapy-related inflammations.

Finally, Biovitrum and its 575 employees will conduct biopharmaceutical process development work directed by Amgen for the next three years. Amgen will pick up the tab for that work, too.

For Biovitrum, the deal not only represents a heavy nod from the most dominant biotech company the U.S. has to offer, but also is a model for the way Biovitrum would like to grow.

The company's general business model is to get its products to Phase II, much like BVT.3489. Without the funds to handle Phase III work and marketing for large indications, Biovitrum searches for partners. However, for its "niche indications," as de Potocki put it, the company plans to take products all the way through development. The company also would like to become a "more attractive partner for U.S. biotech companies looking to come to Europe" and would like to grow as a sales and marketing partner, he said.

The deal with Amgen should send a sign to others it is capable of doing both.

Biovitrum has a marketing agreement with Madison, N.J.-based Wyeth for its hemophilia A product ReFacto, in which it gets co-promotion rights in certain countries. It also has an agreement for GlaxoSmithKline plc, of London, to develop Biovitrum's 5-HT2C receptor agonists. If approved, Biovitrum would commercialize any products in the Nordic region. Now with Kineret to push and potentially cinacalcet hydrochloride and palifermin, as well, Biovitrum has "the embryo of a portfolio we can market in Europe," de Potocki said. And being located in Sweden, it boasts expertise in the region.

"[Biovitrum] is composed of members of the Pharmacia metabolic disorder group," said Sabrina Johnson, director, external communications at Amgen. "They are a specialist in the metabolic disease category. They know the Nordic and EU markets. They have an interest in expanding and they know the markets we wouldn't want to do on our own. It's a good fit."

A reasonable timeline for BVT.3489 Phase III work would be about two years, if all goes well, de Potocki said. While that's the primary indication, he indicated that the product and its mechanism of action have potential in cardiovascular risk factors, obesity and hypertension.

With the up-front payment, dangling milestone payments and funding for years to come, Biovitrum can push immediate funding worries aside, if it had any at all.

"We were in pretty good shape before this, but this certainly has a number of positive effects and gives us further strength financially," he said. "It will allow us to move aggressively in integrating forward."

Amgen's stock (NASDAQ:AMGN) rose 92 cents Monday to close at $68.20.