LONDON – A year and a half after Roche AG handed back rights, Evotec AG has found a new home for its NMDA antagonist portfolio, in a licensing deal with Janssen Pharmaceuticals Inc. worth a potential $75 million up to launch. In addition, there will be milestones payable on further products and/or indications, plus $100 million in commercial milestones on any products that get to market.

"We are really pleased to relicense these compounds. We were disappointed when Roche returned rights," said Mario Polywka, chief operating officer. There has been significant investment over the last year. "We've worked hard to reposition and find another partner, and this is a validation of that effort," Polywka told BioWorld Today.

Evotec originally in-licensed the compounds, which are subtype-selective NMDA (N-methyl-D-aspartate) receptor antagonists from Roche in 2003, advancing them through Phase I development. Roche had options to buy back the compounds, but decided against doing so in May 2011, after Evotec terminated a Phase II proof-of-concept trial of lead product EVT 101 in treatment-resistant depression because of difficulties in recruiting patients. (See BioWorld International, May 25, 2011.)

That decision cost Evotec $65 million due if Roche had exercised the right to take EVT 101 back in-house, plus a further $225 million in development and commercial milestones if the product had made it to market. As the discoverer of the NMDA antagonists, Roche still retains some rights, and Evotec is due to share payments on the new deal with the Swiss pharma company.

Although NMDA receptors also are implicated in Alzheimer's disease, Parkinson's disease, neuropathic pain and epilepsy, Polywka said it is most likely that Janssen, a unit of Johnson & Johnson, will continue development of the orally available antagonists in depression. All future research is in Janssen's hands. "They've taken a whole chemical series, so we'll wait to see which compound they choose," Polywka said.

The NR2B subtype-selective antagonists have been shown to have an improved safety profile over nonselective NMDA antagonists, which although effective also cause unfavorable side effects, including hallucinations. NR2B-selective antagonists bind preferentially to the activated form of the NMDA receptor containing the NR2B subunit and allosterically modulate channel activity – in an activity-dependent manner – by inhibiting channel opening.

The proof-of-concept Phase II study with EVT 101 was designed as a double-blind, placebo-controlled, randomized study in 100 patients suffering from treatment-resistant depression. However, treatment-resistance had to be confirmed in a six-week lead-in antidepressant treatment phase preceding the actual treatment, and difficulties recruiting patients led to the decision by Evotec to terminate the trial. "We have always believed in NMDA antagonists, especially in the ability to be subtype selective, and with shareholders having made significant investment in these compounds we didn't want to give up. This new deal fits with our strategy of building our pipeline without taking the risk," Polywka said.

In October, Evotec's CEO, Werner Lanthaler, was awarded the title "Turnarounder of the Year 2012" in Germany, for implementing a new strategy that has seen the company distance itself from expensive clinical development in favor of drug discovery deals. Those are typically payment by result, long-term alliances focusing on particular targets or diseases, where Evotec is, in effect, acting as the outsourced drug discovery arm of pharma.

Hamburg, Germany-based Evotec also is positioning itself as a conduit for moving academic projects onto the point that they are of interest to commercial partners. In July, it licensed to Janssen a portfolio of small-molecules and biologics designed to trigger the regeneration of insulin-producing beta cells identified in collaboration with Douglas Melton at Harvard University. That agreement was sealed with an up-front payment of $8 million. Upon achievement of certain preclinical, clinical, regulatory and commercial goals, Janssen would make future milestone payments of up to $300 million per product.