Washington Editor

Intercept Pharmaceuticals Inc. is looking to a $163 million collaboration agreement with Les Laboratoires Servier to help it scale the mountainous challenges involved in developing a novel diabetes drug.

The agreement – which includes up-front, research support and milestone payments, as well as royalties – covers the discovery and clinical development stages of TGR5 agonists for the treatment of Type II diabetes and other metabolic indications.

Intercept and Servier will jointly support the discovery stage, while Neuilly, France-based Servier will be responsible for all costs associated with the global development, regulatory approval and commercialization of any compound selected as a lead candidate.

Intercept will retain all rights in Japan and the U.S., and Servier will have rights in the rest of the world.

"Developing a novel drug for the treatment of diabetes has become more challenging in recent years," Intercept President and CEO Mark Pruzanski told BioWorld Today.

"The landscape has changed," he said. "That's why we're excited about this deal."

After a 2007 article in The New England Journal of Medicine linked Avandia (rosiglitazone, GlaxoSmithKline plc) to an increased risk of heart attack, the FDA issued guidance requiring large cardiovascular safety studies for all new diabetes drugs.

Those requirements essentially put diabetes out of the reach of many small biotechs, contributing to the demise of firms like Phenomix Corp. (See BioWorld Today, July 3, 2008, and BioWorld Insight, Nov. 15, 2010.)

But Servier is an experienced mountain climber when it comes to Type II diabetes, which is one of the firm's primary focuses. And it has the resources needed to reach the summit.

The leading independent pharmaceutical company in France, Servier had worldwide sales last year of about $5 billion, and its research group is established in 140 countries.

Intercept also is counting on the potential of TGR5 to give it a foothold against diabetes.

TGR5 is a cell-surface G protein coupled receptor regulated by bile acids that has been shown to be a key regulator of energy homeostasis through stimulation of GLP-1 in the intestine.

By enhancing the GLP-1 mechanism, TGR5 has insulin sensitizing effects, Pruzanski said.

TGR5 also induces energy expenditures, which may make it useful in fighting weight gain, a big concern in treating diabetes as the disease is often accompanied by obesity.

Intercept has two different TGR5 programs. The agreement with Servier involves its earliest stage candidate, Intercept CFO Barbara Duncan told BioWorld Today. She expects the discovery stage will be completed in one or two years. If successful, the candidate would then advance to clinical trials to be conducted by Servier.

The New York-based company has completed all the work necessary to file an investigational new drug application for its more advanced TGR5 candidate and is looking for a partner to help with those clinical trials, Duncan said.

Intercept is not the only biotech pursuing TGR5. Last year, Bristol-Myers Squibb Co. acquired exclusive worldwide rights to develop and commercialize Exelixis Inc.'s TGR5 agonist program.

That agreement included $250 million in milestone payments. (See BioWorld Today, Oct. 12, 2010.)

In addition to its TGR5 agonists, Intercept has INT-747, a first-in-class FXR agonist obeticholic acid for the treatment of chronic liver diseases, in Phase III development. The biotech signed an exclusive licensing agreement with Dainippon Sumitomo Pharma Co. Ltd. for the development and commercialization of that compound earlier this year. (See BioWorld Today, March 31, 2011.)

Incorporated in 2002, privately held Intercept has received much of its backing from Genextra SpA.

The Italian holding company invested $4.5 million in seed financing, led a $45.5 million Series A round and provided $25 million in Series B funding. (See BioWorld Today, Jan. 26, 2010.)

Genextra has invested solely in Italian life science companies. Although based in the U.S., Intercept was founded on intellectual property out of Italy's University of Perugia.