Staff Writer

Entering its first major collaboration to date, PTC Therapeutics Inc. licensed rights to its preclinical compounds for treating hepatitis C virus infection to Schering-Plough Corp. in a potential $200 million deal.

The companies will work together on the research and discovery needed to advance small-molecule candidates aimed at inhibiting the HCV internal ribosome entry site (IRES)-mediated production of viral proteins. Schering then would be responsible for clinical development and worldwide commercialization.

PTC will receive an up-front payment of $12 million, plus research funding and milestones that could exceed $200 million. On top of that, the South Plainfield, N.J.-based company would be entitled to royalties if a product makes it to the market.

"This is not your regular preclinical deal," said Claudia Hirawat, vice president of corporate development for PTC. "It’s really very large for preclinical compounds of any nature, and is possibly the largest antiviral deal at this stage ever done."

PTC has been working on the HCV program for the last couple of years, and "had this been our only program, we probably would not have partnered it because it’s such an exciting area," she added, but "it was a matter of balancing our pipeline."

The company has three ongoing Phase II trials with its lead compound, PTC124, in genetic disorders, and has started Phase I testing of a second product, PTC299, an anti-angiogenic compound.

"It just made sense to partner with someone who had an established bio-franchise," Hirawat said. "We’re very excited to do this deal with Schering."

Based in Kenilworth, N.J., Schering-Plough has a global market reach in several areas, including hepatitis, as well as its own internal research and development efforts. One of the products advancing through its clinical pipeline is another HCV compound, SCH 503034, a protease inhibitor in Phase II studies in patients with HCV genotype 1 virus who have failed to respond to combination therapy with pegylated interferon and ribavirin.

PTC’s HCV program is aimed at the IRES target, which is highly conserved on all HCV genotypes and is involved in the expression of all proteins needed for the virus to replicate. Though other companies have not had success developing drugs against the IRES target, PTC is expecting its small molecules to prove successful because they could minimize the development of drug resistance and, therefore, "play an important role in the treatment of HCV infection caused by any of the known genotypes of the virus," Hirawat told BioWorld Today. "That’s really a significant unmet medical need right now."

Chronic hepatitis C, which can lead to liver disease, affects an estimated 10 million people worldwide.

The HCV program was the third group of compounds identified using the company’s platform technology, the Gene Expression Modulation by Small-molecules (GEMS) system, which targets post-transcriptional control mechanisms.

PTC’s lead product, PTC124, is in proof-of-concept Phase II studies in patients with Duchenne’s muscular dystrophy and cystic fibrosis due to a nonsense mutation. Data are expected by the end of the year.

Characterized by an interruption in the translation process, nonsense mutations result in non-functional proteins and are responsible for causing anywhere from 5 percent to 15 percent of all genetic disorders, and PTC likely will look at expanding the drug into other genetic indications.

At this time, the company is planning to commercialize PTC124 itself. The second product in its pipeline, PTC299, is an oral inhibitor of vascular endothelial growth factor, in Phase I development in cancer.

Late last year, PTC licensed selected compounds from its anti-angiogenesis program to Rochester, N.Y.-based Bausch & Lomb for use in ophthalmology indications, though financial terms of that collaboration were not disclosed.

To date, privately held PTC has raised a total of $139 million in venture capital and grant funding. In its most recent financing, the company pulled in $26.6 million in a private placement in November. (See BioWorld Today, Nov. 11, 2005.)