National Editor

Adding a third product to its marketed line of dermatology treatments, Connetics Corp. entered an agreement to buy exclusive U.S. rights to F. Hoffmann-La Roche Ltd.'s marketed oral psoriasis drug, Soriatane, for $123 million.

Thomas Wiggans, Palo Alto, Calif.-based Connetics' president and CEO, called the acquisition a "transforming event" for the company.

"We believe with this acquisition we have pulled Connetics breakout year forward by one year," into 2004, Wiggans told investors during a conference call.

Wall Street apparently liked it. Connetics' stock (NASDAQ:CNCT) rose $1.88 Monday to close at $24.91.

The deal is expected to close by the end of the first quarter. Connetics will pay for the rights in cash plus a $30 million bank note from Goldman, Sachs & Co. in New York to the extent needed. Soriatane (acitretin) is a retinoic acid analogue approved by the FDA for severe psoriasis in 1997; it sold about $41 million last year.

Gregory Vontz, chief operating officer of Connetics, said Basel, Switzerland-based Roche has done only "limited" promotion of the drug, but growth has continued anyway, with 2003 prescriptions up 4 percent over the previous year. Connetics already markets Olux (clobetasol propionate) and Luxiq (betamethasone valerate) foams for scalp dermatoses.

"Once the [Soriatane] deal closes in early March, we will begin training our territory managers," Vontz said. "We would expect our sales force to begin detailing the product probably in the middle of the second quarter."

Connetics' development pipeline includes Extina, a foam formulation of the antifungal drug ketoconazole; Actiza, a foam formulation of clindamycin for treating acne; and Velac Gel, a combination of clindamycin and tretinoin, also for acne.

But the buzz Monday was about Soriatane, which Lincoln Krochmal, vice president of research and development for Connetics, said offers psoriasis relief "for the first time without some of the previous side effect issues" noted when patients are given cyclosporine and methotrexate.

Soriatane is indicated as a first-line initial treatment and for maintenance and might be synergistic with other therapies, the company said.

"Patients have to be tried on other forms of therapy [such as Soriatane] before they can be moved to the more expensive biologics," Krochmal added. "That's a very important distinction."

South San Francisco-based Genentech Inc.'s Raptiva (efalizumab) was approved last fall for chronic moderate to severe plaque psoriasis in adults who are candidates for systemic therapy or phototherapy. (See BioWorld Today, Jan. 8, 2004.)

Cost also is a factor. Wiggans pointed out that Soriatane is priced "in the range of $3,500 to $5,000 per year," which, depending on which biologic it's compared with, can amount to as little as 25 percent of the competition's cost.

Another biologic is Cambridge, Mass.-based Biogen Idec's Amevive (alefacept), approved about a year ago, also for moderate to severe chronic plaque psoriasis patients who are candidates for systemic therapy or phototherapy. (See BioWorld Today, Feb. 3, 2003.)

Raptiva and Amevive are pitted against each other in a market that also includes a pair of anti-tumor necrosis factor therapies: Amgen's mighty Enbrel (etanercept), approved for rheumatoid arthritis and psoriatic arthritis but used off label for psoriasis; and Malvern, Pa.-based Centocor Inc.'s Remicade (infliximab), approved for Crohn's disease and rheumatoid arthritis.

Coming down the pike is Humira (adalimumab), from Abbott Laboratories, of Abbott Park, Ill., another TNF-blocker approved for RA that could get a psoriasis label in 2005 or 2006.

Connetics officials attending the American Academy of Dermatology meeting in Washington were seeing "a lot of data about the potential for expansion in the oral retinoid market for the treatment of psoriasis," Wiggans said. Although Soriatane has been off patent since 1999, no generics have cropped up or are known to be in the works, company officials said.

Expansion of the market is important because Irvine, Calif.-based Allergan Inc. may get a piece of it. The company submitted its new drug application to the FDA in November for its oral retinoid tazarotene, for the treatment of moderate to very severe psoriasis. Allergan already markets a topical form of the drug, called Tazorac.

Krochmal noted Soriatane has been on the market for years, providing solid proof of efficacy and a physician comfort level. What's more, he said, the Roche drug is indicated for the five types of psoriasis (plaque, guttate, erythrodermic, pustular and palmar-plantar) and tazarotene has been evaluated only in one type (plaque).

Vontz said the company expanded its sales force to 66 territory managers last year, and the increased attention being paid to biologics for psoriasis, as well as the Allergan drug, likely will only bring more attention to the disease and potential therapies.

"We think this market now is poised for tremendous growth," he said. "The timing is absolutely right."