By Karen Young
Staff Writer
Cephalon Inc. and Sanofi-Synthelabo agreed to co-develop and co-market angiogenesis inhibitors for oncology in a deal worth up to $32 million for Cephalon for the first product. Separately, Cephalon formed a joint venture company to bolster the U.S. sales of Provigil and Gabitril.
The two companies will jointly develop and market the angiogenesis inhibitors in the U.S., Canada and Mexico and will share in product sales in those countries. The agreement focuses on a compound called CEP-7055, a vascular endothelial growth factor (VEGF) kinase inhibitor. Other compounds involved in the deal are in the preclinical or research stage.
With these two companies sharing the development and commercialization costs of CEP-7055 and other angiogenesis inhibitors that may emerge from the research and development collaboration, it will hasten the speed with which we can bring these products to market, said Stacey Beckhardt, senior manager of product communications for Cephalon. The agreement also brings to Cephalon a partner with marketing experience in oncology, which is an important asset in that competitive market.
Sanofi-Synthelabo, of Paris, will acquire exclusive marketing rights to these angiogenesis inhibitors in Europe and the remainder of the world except Japan, where Cephalon will retain rights.
The agreement includes an up-front license fee, milestone payments and royalties on product sales for Cephalon, although the company declined to provide specifics.
West Chester, Pa.-based Cephalon is about to begin a Phase I trial for CEP-7055, Beckhardt said.
The technology is based on a VEGF platform. The pathological process of angiogenesis is induced by a number of factors, the primary of which is polypeptide vascular endothelial growth factor. Based on preclinical evidence, CEP-7055 inhibits the growth of endothelial cells necessary for angiogenesis in cancerous tumors.
The joint venture for sales and marketing of the two products was funded through a $50 million investment from institutional investors.
With the formation of the two-year joint venture, Cephalon plans to increase its internal sales force in the U.S. for Provigil (modafinil), a sleep disorder therapy, and Gabitril (tiagabine hydrochloride), a drug for epilepsy, by 50 people, from 135 to 185.
The joint venture was a straightforward way to raise capital for this particular purpose, said Robert Grupp, vice president of corporate communications for Cephalon. These are institutional investors who put equity into the joint venture, and it does not involve debt from Cephalon.
The joint venture will support sales beyond what was already budgeted for two of what the company considers high-growth products. Guidance for 2002 projects that Cephalon will sell $200 million to $205 million of Provigil and $40 million to $45 million of Gabitril, he said.
In addition to increasing the sales force, the joint venture may also fund Phase IV trials for both of these drugs, Grupp said.
Earlier this month, Cephalon acquired French pharmaceutical company Group Lafon for $450 million in cash. This deal also gave Cephalon worldwide rights to Provigil, a wake-promoting drug, which is considered to have a broader market in France than any other country. (See BioWorld Today, Dec. 4, 2001.)
Cephalons stock (NASDAQ:CEPH) rose $1.92 on Thursday to close at $71.96.