National Editor

Gearing up for pivotal trials of its vaccine for kidney infections, Nabi Biopharmaceuticals Inc. signed an agreement to pay Braintree Laboratories Inc. $90 million in cash and 1.5 million shares of stock for a product to treat patients with end-stage renal failure.

"It's a door opener, if you will," said Mark Soufleris, vice president of investor and public relations for Boca Raton, Fla.-based Nabi.

"This will be an important product in the nephrology setting, and it gives our sales force an opportunity to build relationships and begin calling on nephrologists," he told BioWorld Today.

The product is PhosLo (calcium acetate), used to treat end-stage renal failure patients who are suffering from hyperphosphatemia, or elevated levels of phosphate in the blood, a potentially fatal condition.

A tablet form of the drug has been available since 1991, and a gel-cap version was introduced in the past year or so, Soufleris said, although the patent for it, which pushed the buying price upward, was issued earlier this month.

Under the purchase terms, Nabi will pay $60 million in cash at closing, which is expected Aug. 4, and another $30 million over the period ending March 2007. The company will issue at closing 1.5 million shares that, valued at Monday's ending price of $6.83, would be worth another $10.2 million.

Braintree Laboratories, based in the Massachusetts city of the same name, will continue to manufacture the product for Nabi under a long-term agreement.

The largest PhosLo patient segment comprises those with end-stage renal disease on chronic renal dialysis, including hemodialysis and peritoneal dialysis.

About 275,000 Americans were on chronic renal dialysis in 2000 and the number is expected to grow by double-digit bounds through the decade because of more diabetics, an aging population and a slowing in the death rate for dialysis patients.

For the year ending in December, PhosLo sold about $14 million. On an end-user or patient-demand basis, sales for 2002 totaled slightly more, about $16 million.

Nabi is using cash on hand plus a new $35 million credit facility with Wells Fargo Foothill Inc., a subsidiary of San Francisco-based Wells Fargo Bank, to buy the drug, which complements Nabi's StaphVAX, a polysaccharide conjugate vaccine against Staphylococcus aureus infections in ESRD patients.

Last week, Nabi began clinical trials to evaluate the immunogenicity of a newly manufactured lot of StaphVAX, the same that will be used in a planned confirmatory Phase III trial later this year.

"The primary efficacy point will be eight months," Soufleris said, adding that patients will be given a booster at that point and followed another four months. Nabi plans to submit a new drug application for the product near the end of 2005.

In January, the company won priority review from the FDA for Nabi-HB Intravenous to prevent hepatitis B infection in transplanted livers. The treatment, a sterile solution of human antibodies, is already approved for preventing HBV upon acute exposure, and is being widely used off label for the sought indication. (See BioWorld Today, Jan. 24, 2003.)

"Getting the labeled indication would be very helpful from a couple of perspectives," Soufleris said. It would provide orphan drug protection and allow the sales force of 40 people, including 36 product specialists, to actively promote the product for liver transplant patients.

"It would also give us a more complete package to take to international registrations," Soufleris said. "Finding partners to help us globalize our business is something we've been looking to do." The company has four distribution agreements in other countries but the product still needs to be registered there, he added.

With the acquisition of PhosLo, "we'll probably add five to six [sales] representatives, but we're positioned well already," Soufleris said.

Nabi's stock (NASDAQ:NABI) closed Tuesday at $6.74, down 9 cents.