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By Donna Young
Washington Editor
Shares of Vectura Group plc rose 8.5 percent on the London stock exchange Monday after the Chippenham, UK-based firm and its partner, Sosei Group Corp., of Tokyo, said Novartis AG had initiated a Phase III study of NVA237, a dry powder formulation of the muscarinic antagonist glycopyrronium bromide, as an inhalational treatment for chronic obstructive pulmonary disease.
The action triggered a $7.5 million payment to each of the companies from Basel, Switzerland-based Novartis, which obtained the global development and commercialization rights to NVA237 in April 2005.
Under that deal, Vectura and Sosei each could earn $175.2 million in addition to double-digit royalties.
Novartis is developing NVA237 as a monotherapy and in combination with its once-daily, long-acting beta-2 agonist indacaterol in COPD.
Novartis is expected to start a Phase III trial of the combination product, known as QVA149, later this year, which would trigger another $7.5 million to Vectura and Sosei, said Vectura CEO Christopher Blackwell. He said that his firm and Arakis Ltd., a UK-based drug discovery and development firm that was acquired by Sosei, each had received an initial payment of $15 million from Novartis under the 2005 deal.
Blackwell noted that glycopyrronium bromide has been on the market for several years as an agent administered intravenously to treat chronic gastric ulcers. It also has been used in a liquid form given to patients before surgical procedures to dry up secretions. "It's an old drug," he explained. NVA237, however, marks the first time glycopyrronium bromide has been used as an inhaled agent to treat COPD symptoms, Blackwell told BioWorld Today.
Based on Boehringer Ingelheim GmbH's and Pfizer Inc.'s success with their inhaled COPD drug Spiriva (tiotropium bromide), Blackwell said Vectura and its partner decided to pursue development in 2000 of an inhaled formulation of glycopyrronium bromide, which is similar pharmacologically to tiotropium bromide.
"So we had a very good feeling that our product, if we could actually formulate it and get it inhaled, would have the same benefit for COPD patients," he said.
Blackwell noted that sales of Spiriva have topped $3 billion annually. "So you can see what sort of potential our product has," he added.
The Phase III trial of NVA237 in COPD is a randomized, double-blind, placebo-controlled, parallel-group design, including an open-label tiotropium bromide arm. Novartis is expecting to enroll about 1,000 patients with moderate to severe COPD from study centers across the U.S., Europe and other territories, Blackwell noted.
Each patient will be randomized to receive a once-daily dosage of NVA237, tiotropium bromide or placebo for a 52-week period.
The primary endpoint of the study will be the change from baseline in forced expiratory volume in one second over 12 weeks of treatment. Novartis also plans to evaluate a number of secondary endpoints.
Novartis anticipates having data on the Phase III trials within 18 months after the studies begin and aims to file new drug applications for NVA237 and QVA149 in 2011, Blackwell said.
While Monday's announcement from Vectura and Sosei was not unexpected, it is significant because it shows that Novartis remains on schedule with its development program for NVA237 and on track for its NDA submissions for that drug and QVA149, said Piper Jaffray analyst Sam Fazeli.
The confirmation of the timing and the level of milestone payment, said Nomura Code analyst Michael King, is "reassuring and helps to reduce the perceived risk to the NVA237 project and to our forecasts for the year to March 2010."
Receipt of the payment for NVA237, he added, will mean that Vectura will have been paid $10.4 million of the total $17.2 million in milestones forecasted for the year.
Vectura is expecting to receive about $85 million - about half of the potential $172.5 million total - by the time both drugs make it to market, Blackwell said.
Blackwell noted that his company has ongoing partnerships with several other firms, including Novartis' generic arm, Sandoz GmbH, which is using Vectura's technology in two generic inhaled dry powder products.
Vectura in 2000 granted exclusive and nonexclusive, worldwide rights to use its protein stabilization patents to Baxter International, which has used the technology in its serum-free recombinant Factor VIII, Advate, a $1.5 billion-per-year product for which Vectura receives royalties on sales, he said.
The company also has a deal with Boehringer to develop a dry powder inhaler technology, for which it is earning revenue streams, with further milestones and royalties anticipated once the Ingelheim, Germany-based drugmaker's products are approved, Blackwell added.
Vectura also has partnered with GlaxoSmithKline plc, Otsuka Pharmaceuticals Co. Ltd., ProFibrix BV and UCB Pharma SA.
Shares of Vectura (LSE:VEC) closed at 70.50 pence (US$1.17), a gain of 5.50 pence. | 
