Staff Writer

NovaDel Pharma Inc. is slated to receive a $3 million up-front payment and up to $24 million in future milestones under a deal with BioAlliance Pharma SA to develop and market ondansetron oral spray in Europe.

Flemington, N.J.-based NovaDel plans to use the money to "reinitiate a lot of our clinical development" that had been curtailed due to a lack of money, Mike Spicer, chief financial officer, told BioWorld Today. The company has not yet decided what its funding priorities will be, he said.

Under the deal, Paris-based BioAlliance will be responsible for European regulatory and pricing approvals and commercialization activities for ondansetron oral spray. NovaDel will be responsible for supplying the product, which is used to prevent nausea and vomiting after chemotherapy, radiation and surgery.

The $24 million in milestone payments consists of a regulatory approval milestone of $5 million and sales-related milestone payments of $19 million, as well as a royalty on net sales during the term of the agreement.

NovaDel and BioAlliance will jointly develop ondansetron oral spray (OS), with BioAlliance paying 100 percent of the costs up to a certain amount after which the development costs are shared 50-50 between the parties, according to NovaDel.

NovaDel believes ondansetron OS could be the first antiemetic, an agent for controlling nausea and vomiting, to be available in Europe in an oral spray form.

A tablet form of the drug, GlaxoSmithKline plc's Zofran, already is approved in the U.S. and abroad and generic versions currently are available.

In 2007, more than 2 million prescriptions for ondansetron were written in the U.S., NovaDel said, citing IMS data. In Europe, ondansetron unit growth was 19 percent, representing about 1 million prescriptions in Europe in retail and hospitals.

Steven B. Ratoff, chairman, interim president and CEO of NovaDel, said in a statement, "We are looking forward to working closely with our colleagues at BioAlliance to establish this product as an innovative alternative to patients having difficulty taking tablets and other forms of ondansetron."

NovaDel said its technology, in comparison to conventional oral dosage forms, offers the potential for faster absorption of drugs into the bloodstream. Oral sprays also eliminate the need for water or swallowing, potentially improving patient compliance, the company said.

Its most advanced oral spray candidates target angina, nausea, insomnia, migraine headaches and disorders of the central nervous system. NovaDel plans to develop these and other products independently and through collaborative arrangements with pharmaceutical and biotechnology companies.

In the U.S., NovaDel partner Par Pharmaceutical Inc. unit Strativa Pharmaceuticals is working to advance clinical studies of ondansetron OS under the trade name Zensana. A new drug application for Zensana is expected to be filed with FDA in the fourth quarter, NovaDel said.

The FDA requires bioequivalence tests for this new oral drug delivery formulation, Spicer said. Specifically, the agency requires pharmacokinetic trials - a pilot trial and a definitive trial - to show that the oral spray form delivers a safe dose in the same amount of time as the approved tablet form, Spicer said. Zensana is now entering the definitive trial, he said.

Strativa is responsible for the clinical development of this product in the U.S., and BioAlliance will use its dossier for European registration, Dominique Costantini, president and CEO of BioAlliance, said in a statement. BioAlliance expects to file the European dossier in 2009-2010.

Costantini said the product "aligns well with BioAlliance's strategy to expand its presence in supportive care for oncology and hospitalized patients, and focusing on patient convenience."

BioAlliance, a specialty pharmaceutical company focused on the treatment of opportunistic infections in cancer and HIV, develops and commercializes products that address resistance issues. The company has launched its first portfolio product (Loramyc) in France and already received European Marketing Authorizations in the UK, Germany, Belgium, Denmark and Luxemburg. The compound has completed the pivotal Phase III clinical development in oropharyngeal candidiasis in the U.S.

In addition, two other innovative products are currently in Phase III clinical trials: acyclovir Lauriad in oral herpes, based on the same Lauriad muco-adhesive technology as Loramyc; and doxorubicin Transdrug in primary liver cancer.

Shares in NovaDel (AMEX:NVD) rose 8 cents or 36.7 percent, to close 31 cents. Shares of BioAlliance (PARIS:BIO) were up 25 cents or 3.6 percent, closing at $7.16.