Less than a week after taking the reins at Theratechnologies Inc., newly appointed CEO John-Michel Huss led the Canadian biotech in signing a deal to commercialize its recently FDA-approved drug Egrifta (tesamorelin) in Latin America, Africa and the Middle East with Sanofi-Aventis Group SA – the Paris-based company where Huss spent the past 11 years.
"While at Sanofi, I was able to experience firsthand the regulatory and commercial strengths of the company," he said.
Sanofi is "the leader" in marketing drugs in emerging markets, particularly in Latin America, Huss said during a conference call with investors and analysts.
"Over the years, they have developed expertise for commercializing products in emerging markets and have been very successful in doing so," he said, noting that 29 percent of Sanofi's third-quarter sales came from emerging market territories.
"They have a very strong presence in these geographies, which means they understand the regulatory processes and have the influence necessary to support an expeditious regulatory review, which in turn, would ensure patients who need Egrifta would have access to it," Huss said. Sanofi, he added, also has an "extensive mature distribution network" in Latin America, Africa and the Middle East.
Egrifta is a synthetic analogue of human growth hormone-releasing factor (GRF), a hypothalamic peptide that acts on the pituitary cells in the brain to stimulate the synthesis and release of endogenous growth hormone. It won U.S. approval last month as the first and only therapy for HIV-associated lipodystrophy, a metabolic complication that affects patients taking antiretroviral therapies long term. (See BioWorld Today, Nov. 12, 2010.)
The Sanofi deal, which Huss said "validates the promising future of GRF compounds," is the second commercialization deal for Egrifta, following Thera's October 2008 agreement with EMD Serono Inc., an affiliate of Darmstadt. Germany-based Merck KGaA, for the U.S. marketing rights. (See BioWorld Today, Oct. 30, 2008.)
The EMD Serono partnership included a $30 million up-front payment for Montreal-based Thera, in addition to a $22 million licensing fee and an $8 million equity investment, plus milestones and royalties, for a potential deal value of $215 million.
The FDA's OK of Egrifta last month garnered Thera a $25 million milestone payment from EMD Serono, Huss noted. He emphasized, however, that the Sanofi transaction does not include any milestones or an up-front payment.
Instead, Huss said, Thera will receive a "significant" percentage of the drug's selling price in Latin America, Africa and the Middle East.
Although a price in Latin America and the other ex-U.S. territories has not yet been set – because the drug has yet to gain approval anywhere other than the U.S. – Huss noted that the company recently disclosed that the U.S. wholesale acquisition price was set at $23,900 per year.
Typically, a reference price is taken from a "basket of prices," including the U.S. price, he said, noting that the population affected by HIV-associated lipodystrophy in Latin America is about half that of the U.S. population, which is about 230,000.
With Sanofi's regulatory and commercial strength, "we expect to start generating revenue in the back half of 2012 in some of these emerging countries," Huss said. "Ensuring recurring future earnings was our number-one priority."
Under the new agreement, Sanofi will be responsible for all regulatory and commercial activities in Latin America, Africa and the Middle East for Egrifta for HIV-associated lipodystrophy, and has the option to commercialize the drug in those territories for other indications, Huss explained.
"I know Sanofi will do everything they can to ensure patients who need this drug get access to it rapidly," he said, adding that he has "great confidence this will be a successful partnership" that will "contribute to Thera's future growth."
Huss emphasized that Thera kept all future development rights for Egrifta and is responsible for conducting R&D activities for any additional clinical programs. "We believe that this transaction represents the best path forward for Thera, to capitalize on the value of Egrifta in major markets outside the U.S.," he said. "I firmly believe my relationship with Sanofi's top management and the vision I share with them will result in a successful partnership for both companies."
Thera is continuing discussions with potential partners for Europe and other geographies, Huss noted.
"What is clear to me, is that the FDA approval has significantly increased the interest in Egrifta, which we hope will boost the interest in this new class of drugs," he said.
With the EMD Serono and Sanofi deals in hand, Thera's next priority is pursuing an additional clinical program for Egrifta, Huss said.
"I'd like to assure you that I'm diligently working on that and will come back to you at beginning of the year with a decision," he said.
Shares of Theratechnologies (TSX:TH) closed Monday at C$5.65 (US$5.62), down C3 cents.