BioWorld International Correspondent

Swedish biotechnology firm Medivir AB unveiled Monday its biggest drug development deal to date a licensing agreement worth up to US$42 million with F. Hoffmann-La Roche Ltd. for Medivir’s candidate HIV treatment, MV026048.

The compound, a non-nucleoside reverse transcriptase inhibitor, is still in preclinical development. The company, which decided to take it forward for further development in December, expects the product to enter Phase I trials early next year.

“We said in order to drive this all the way out to development, out to the market as fast as possible, we should seek a partner with the right tools to do so,” CEO Jonas Frick said in a conference call Tuesday.

The company’s choice of partner was strongly influenced by the prevalence of combination therapy in HIV treatment. “It is important to line up with a company that can perform clinical trials with a variety of compounds included,” Frick said.

Basel, Switzerland-based Roche’s HIV franchise is built upon its protease inhibitors, Viracept and Invirase/Fortovase. T-20, a fusion inhibitor it is developing in collaboration with Trimeris Inc., of Durham, N.C., is nearing completion of Phase III studies.

Under the terms of the Medivir deal, Roche takes on responsibility for developing MV026048 and gains exclusive worldwide marketing rights, apart from Denmark, Finland, Iceland, Norway and Sweden, which Huddinge-based Medivir retains. Medivir will receive an up-front payment of US$5 million, US$2 million of which represents new equity it has issued to Roche, priced at SEK68 per share. Additional milestone payments would bring the total to US$42 million, should MV026048 reach the market. Medivir also would receive royalties on eventual product sales.

“There is a possibility of a double-digit royalty coming into this deal,” Frick said. “The HIV market is still growing. The NNRTI segment of the HIV market is growing even faster.”

Medivir Chief Financial Officer and Vice President for Investor Relations Rein Piir said the NNRTI market was worth approximately US$1 billion last year. According to analyst estimates, he said, it will exhibit “tremendous growth, up to US$4 billion by year-end 2006.”

One problem with existing treatments is the development of cross-resistance. Once one NNRTI drug fails, a patient is unlikely to gain any benefit from an alternate treatment. MV026048, the company said, has a unique resistance profile that could make it an important treatment option. The compound also is likely to show low levels of interaction with other drugs.

“Preclinical results show a completely different profile compared with Sustiva, for example,” Piir said, referring to the drug marketed by Bristol-Myers Squibb Co., of New York.

This is Medivir’s second major deal involving an NNRTI. In 1999, it entered an agreement with Chiron Corp., of Emeryville, Calif., worth potentially US$35 million, plus royalties, to develop MIV-150. The project, which yielded US$12.6 million in payments to Medivir in 1999, is still in Phase I trials, Piir said.