Staff Writer

Five months after signing a $575 million deal with Novartis AG for the Phase II antiplatelet drug elinogrel, Portola Pharmaceuticals Inc. nailed down a $470 million deal with Merck & Co. Inc. for its other lead compound, the Phase II anticoagulant betrixaban.

The new deal calls for South San Francisco-based Portola to receive $50 million up front, $420 million in potential milestone payments and double-digit royalties on worldwide sales. Merck will cover costs, but Portola retains the option to co-fund Phase III trials in exchange for U.S. copromotion rights and higher royalties.

In exchange, Whitehouse Station, N.J.-based Merck gets exclusive global rights to betrixaban, an oral Factor Xa inhibitor currently being studied in a 500-patient, dose-ranging Phase II trial for the prevention of stroke in patients with atrial fibrillation.

The ongoing study compares betrixaban to warfarin, the only oral anticoagulant available in the U.S. - and the only one in the world approved for chronic use in conditions such as atrial fibrillation rather than just acute use following surgery.

Despite the lack of other options, warfarin's use is limited by bleeding risks and other complications that require careful dose monitoring. And that has spurred plenty of interest in the development of next-generation anticoagulants, a path that has proven difficult thus far. Just this week ARYx Therapeutics Inc. saw its stock tumble 44 percent after its anticoagulant tecarfarin (ATI-5923) failed to beat warfarin in a Phase II/III study. (See BioWorld Today, July 9, 2009.)

ARYx blamed its failure on unprecedented responses in the warfarin arm due to the highly controlled nature of the trial, yet William Lis, Portola's vice president of business and commercial development, seemed unconcerned that Portola's ongoing betrixaban trial might suffer the same fate. Portola has "always planned on studying betrixaban against a well-controlled warfarin regimen," Lis told BioWorld Today, adding that tecarfarin and betrixaban have completely different mechanisms.

But there are other anticoagulants in the pipeline that more closely match betrixaban's mechanism - and several are farther along in development. Boehringer Ingelheim GmbH's thrombin inhibitor Pradaxa (dabigatran etexilate) and Bayer Schering Pharma AG's Factor Xa inhibitor Xarelto (rivaroxaban) are approved overseas for acute post - surgical use, and both are being studied in extensive Phase III programs. Also in Phase III are Daiichi-Sankyo Co. Ltd.'s Factor Xa inhibitor Edoxaban and Pfizer Inc.'s Factor Xa inhibitor apixaban.

Yet Portola President and CEO Charles Homcy maintained that "it's not the first - in - class, it's the best-in-class" that wins the market. And Portola believes betrixaban will be best in class for several reasons.

First, the drug has minimal renal excretion, which means it potentially can be used in patients with renal impairment. "I cannot overstate the role of renal failure in this patient population - betrixaban has a potential leg-up here over the competition," Homcy said.

Second, betrixaban doesn't inhibit CYP enzymes, which should limit cross-reactivity with other drugs - another concern with elderly patients who often take multiple medications.

Third, betrixaban has a long half-life, which should allow once-daily oral dosing, and low peak-to-trough variability, which means less monitoring and bleeding risk if patients accidentally skip or double-up on a dose. "This drug is forgiving," Homcy said, which is "really important" in elderly atrial fibrillation patients who have trouble remembering to take their medications.

Beyond atrial fibrillation, betrixaban could be used to prevent blood clots following surgery. In fact, a Phase II trial in patients undergoing total knee replacement turned out well, but Portola chose to conduct the Phase II chronic atrial fibrillation trial rather than move into a Phase III acute post-surgical trial because Homcy felt betrixaban's differentiating qualities would really shine in chronic markets.

Portola's new deal with Merck is somewhat similar to its earlier deal with Novartis for elinogrel, a P2Y12ADP receptor antagonist designed to compete with Plavix (clopidogrel bisulfate, Sanofi-Aventis Group and Bristol-Myers Squibb Co.). Both deals included healthy upfront cash payments, significant milestones, double-digit royalties and a U.S. copromote option. (See BioWorld Today, Feb. 13, 2009.)

Those co - promote options give Portola a path to become a fully - integrated pharmaceutical company - something that has always been a part of the biotech's long-term vision. Further feeding that vision are two preclinical programs that Portola believes it potentially could bring to market by 2013: a thromboxane receptor agonist for aspirin - intolerant patients and a universal Factor Xa inhibitor antidote. Both programs are slated for an investigational new drug application filing next year.

Portola also has a preclinical SYK inhibitor for autoimmune diseases and cancer and a preclinical JAK inhibitor for inflammation and transplant. With the up - front payments from its two deals and more than $200 million in private equity raised to date, Portola has plenty of cash to fund its early - stage programs, the company said.