Editor

"First to market is generally a good place to be," said John Howarth, vice president of investor relations and corporate affairs for Kos Pharmaceuticals Inc., in a wry understatement last week.

The occasion was Kos' entry into a race with Dyax Corp. for an approved compound against hereditary angioedema, the painful, debilitating and sometimes life-threatening condition characterized by recurrent swelling of subcutaneous tissue, the gastrointestinal tract and the larynx, the last of which can lead to suffocation.

Caused by a deficiency of C1 esterase inhibitor (C1-INH), HAE attacks can last as long as five days and happen from once a year to twice per week. Abdominal episodes are particularly painful. No approved therapy is available in the U.S., and in Europe, plasma-derived C1-INH is the standard of care.

Kos paid Berlin-based Jerini AG 22 million (about US$27 million) for rights to develop, market and distribute the bradykinin inhibitor icatibant that is in Phase III trials in the U.S., Canada and Europe against HAE.

Under the terms, Kos is paying 12 million up front as a licensing fee and making an equity investment of 10 million, paying the weighted average of the closing price of Jerini's shares during the last four trading days, or 3.20 per share - which is also the price at which Jerini shares settled on the day of the firm's recent initial public offering. Jerini opened on IPO day at 3.10, under the low end of the desired range of $3.20 to $3.60, raising 51.5 million.

The deal includes undisclosed milestone payments and sales royalties, and collaborative efforts will be put forth not only in HAE but also in other forms of angioedema, asthma, and refractory ascites in liver cirrhosis. Proof-of-concept trials already have been completed in those indications.

Jerini retains commercial rights to icatibant outside the U.S. and Canada and continues to be responsible for HAE Phase III trials, as well as regulatory approval. Trial results are expected in mid-2006, with filing for market approval in the U.S. and Europe also planned next year.

Kos and Jerini will collaborate on the global branding and positioning of icatibant in HAE and other forms of angioedema, and Jerini will continue to supply the drug. But analyst Gregory Wade, with Pacific Growth Equities, expects the Dyax drug to win approval first.

An inhibitor of kallikrein, described as bradykinin's enzymatic "liberator" in the body, Dyax's DX-88 (like icatibant) has orphan drug status and fast-track designation from the FDA, and a Phase III trial with DX-88 is expected to start by the end of this year, with a filing of the biologics license application in 2006 and the European filing soon after.

About a year ago, Dyax and partner Genzyme Corp. - which Dyax's CEO Henry Blair co-founded in 1981 - said the company expected to beat Jerini to market with DX-88, after completing more clinical work requested by the FDA. That plan still stands, Blair said last week.

"Our trial will go very quickly," he said. "And we know how to apply for a drug. Genzyme has been there, done that, many times."

Analyst Wade said the estimates of HAE's prevalence vary from about 16,000 to 66,000 patients in North America, and his firm put the number at 26,000. But the market depends on other factors, such as the number of attacks each patient has, and the patient's willingness to go to the hospital. When DX-88 is first launched (and icatibant, for that matter), patients would need to visit an emergency room for therapy, although "a self-injectable formulation is something we know [Dyax] would like to develop," Wade said.

Dyax and Jerini with Kos would like to come up with a formulation that prevents an HAE attack in the first place, "which we think will be the largest market for these types of drugs," Wade told BioWorld Financial Watch. "No company has demonstrated they can do that."

Meanwhile, getting a handle on the hospital market is tricky, though Wade assumes the price of Dyax's drug would be about $2,500 per attack.

Jerini has been less public about data from its trials or progress about the icatibant program than others. Lev Pharmaceuticals Inc.'s C1-INH started Phase III testing in the first quarter. The Netherlands-based Pharming Group NV's Phase II/III studies yielded positive data in May.

"Lev's product is plasma derived, and clearly there are problems with that," Wade said. Pharming's product is developed in the milk of transgenic rabbits.

Aventis Behring (formerly part of the French firm Aventis SA but recently acquired by Australia's CSL Ltd.) has Berinert-P, another plasma-derived, intravenous C1-INH, available on a limited basis in Europe.

Dyax and Jerini/Kos are likely to become the main fighters over the space, though Wade noted that the approval of one firm's drug wouldn't preclude the other's so patients and physicians will determine who gets the larger slice of the pie. Data from Dyax looks "extremely promising," he said, but there hasn't yet been enough offered from Jerini to make comparisons.

Blair pointed out that DX-88 has been administered 297 times to 107 patients. One experienced flushing but still responded positively to the drug. In the particularly acute setting of an HAE attack, the Dyax drug has treated 33 events in 20 patients, "100 percent of them successfully," Blair said.

Site reactions, unlike those with Jerini's drug, have amounted to nothing more than would be expected from ordinary saline, he said, and Dyax hopes to nail down the larger market cited by Wade, by doing more than treating HAE situations when the afflicted person is in distress.

"We're aiming to come out with a product that patients can take when they feel an attack coming on," he said.