Shares of Fibrocell Science Inc. (NASDAQ:FCSC) climbed 42.7% to $2.54 Monday on news that Castle Creek Pharmaceuticals LLC has agreed to support the development and commercialization of FCX-007, Fibrocell's lead gene therapy candidate for the treatment of recessive dystrophic epidermolysis bullosa (RDEB). The deal, in which Castle Creek gains an exclusive license to FCX-007 in the U.S., includes a $7.5 million up-front payment for Fibrocell as well as coverage for up to $20 million in development expenses ahead of a potential BLA filing for the candidate. Millions of dollars more in regulatory and sales-based milestones to Fibrocell could follow, some of which will flow to Fibrocell's collaborator, Intrexon Corp.

The agreement caps an evaluation by Exton, Pa.-based Fibrocell of a variety of potential partners and gives Castle Creek a second entrant in the race to provide a new therapy to patients with epidermolysis bullosa, an rare disease niche in which it's already developing a topical ointment for a different form of the disease sourced from Taipei, Taiwan's Twi Biotechnology Inc. Parsippany, N.J.-based Castle Creek is part of Paragon Biosciences LLC, and is backed by Fidelity Management & Research Co. and Valor Equity Partners.

Fibrocell President and CEO John Maslowski told BioWorld the company's agreement with Castle Creek represents a way to not only pay for the development, but also to advance the company's larger portfolio, especially FCX-013 for the treatment of moderate to severe localized scleroderma.

"The most important part of the synergy is that they have commercial experience," he said, noting Castle Creek's ability to help with pharmacoeconomics analyses, reimbursement and marketing strategies, all of which can play important roles in any rare disease drug's ultimate success.

FCX-007 is a genetically modified autologous fibroblast that encodes the gene for type VII collagen (COL7). In a recent type B meeting, the FDA provided guidance on various design aspects of Fibrocell's proposed phase III trial, called DEFI-RDEB. The trial, expected to enroll 15 to 20 patients, is expected to start in the second quarter and would trigger a $2.5 million payment to Fibrocell from Castle Creek for the first patient enrolled.

Under the terms of the agreement, Fibrocell will receive $30 million upon a potential BLA approval and achieving commercial readiness. It is also eligible to receive up to $75 million in sales milestones, consisting of $25 million when FCX-007 achieves $250 million in cumulative net sales and an additional $50 million upon attaining $750 million in cumulative net sales. In addition, Castle Creek will pay Fibrocell a 30% share of gross profits from FCX-007 sales.

Half of the up-front, milestone and profit-share payments from Castle Creek will flow to Intrexon, which provided Fibrocell with the vector technology incorporated into FCX-007 that facilitates the assembly and delivery of the necessary target gene constructs for delivery to autologous fibroblast cells.

Castle Creek will be responsible for all development and manufacturing expenses up to $20 million prior to the initial BLA filing with the FDA. If development spending exceeds $20 million, it will be responsible for 70% of the excess costs and Fibrocell will cover 30% of the additional expenses. Castle Creek will also be responsible for all commercialization activities for FCX-007.

Fibrocell will maintain responsibility for clinical development, regulatory interactions and manufacturing of the product under a future supply agreement. Beneficially, it will also retain rights to any potential rare pediatric disease priority review voucher for the program, which it could sell or use itself in the future.

Fibrocell's program will compete in a field that includes a number of other COL7A1 gene stimulators, including Krystal Biotech Inc.'s bercolagene telserpavec, Wings Therapeutics's Inc.'s QR-313 and Abeona Therapeutics Inc.'s EB-101. Another potential treatment, Phoenix Tissue Repair Inc.'s PTR-01, a protein replacement therapy that uses a recombinant collagen type VII for the potential treatment of RDEB, is also under development. The company dosed the first patient in a phase I/II trial for the drug in February.

Maslowski said the number of programs in development is great for both doctors and patients, who have a heterogeneous mix of conditions that may require different therapies. Fibrocell's data so far have suggested that FCX-007 can provide durable wound healing on an outpatient basis, he said.

FCX-007 has orphan designations for treatment of epidermolysis bullosa in both the U.S. and Europe. In the U.S., the FDA has also granted it both rare pediatric disease and fast track status for the treatment of RDEB.

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