Keen to address a rare vision-limiting disorder endured by nearly 1.9 million people globally, ophthalmology specialist Santen Pharmaceutical Co. Ltd. has negotiated a $252 million ex-U.S. licensing deal for Jcyte Inc.'s Jcell, a human retinal progenitor cell therapy initially aimed at treating retinitis pigmentosa. The agreement includes $50 million in up-front cash for Jcyte plus potential milestone payments and royalties, the Newport, Calif.-based company said.

Though other global pharma companies had expressed excitement about Jcell, Jcyte CEO Paul Bresge told BioWorld that he'd long has his eye on Santen, first taking the opportunity to introduce its team to Jcyte in Osaka, Japan, more than four years ago. "What I like the most about Santen is the fact that ophthalmology is everything that they do," he said. Furthermore, from its Japanese base, the company is well positioned to take advantage of the Ministry of Health, Labor and Welfare's Sakigake program, a benefit the partners will pursue together now to build on Jcell's already-granted FDA regenerative medicine advanced therapy designation. Jcell has also has orphan drug designations from the FDA and EMA.

Given Santen’s substantial ophthalmology portfolio, Jcell’s potential not just in RP, but beyond, was a major draw for Santen, Bresge said. Potential future applications for the treatment of conditions such as age-related macular degeneration and diabetic retinopathy also covered by the licensing of the asset are "very much part of the deal," he said.

Paul Bresge, CEO, Jcyte

Additional terms of the deal included $12 million in convertible debt, immediate available to the company, as well as up to $190 million in clinical, regulatory and sales milestones. Santen is Japan's 10th largest pharma company by market cap. If it's successful in bringing Jcell to market, Jcyte would receive tiered, double-digit royalty payments on net sales of the therapy outside the U.S.

Work intended to carry Jcell through the end of a phase IIb study and on toward global pivotal trials is up next, with expectations the program will move ahead as quickly as possible following an upcoming readout of the study. The evaluable portion of the trial, which tested two different doses of Jcell vs. a mock injection in a group of 84 participants is already complete, though a crossover portion remains underway.

The cells have been administered to more than 100 patients to date, development that has been supported in large part by the California Institute for Regenerative Medicine, which has funded previous preclinical development and ongoing clinical studies, most recently with an $6.6 million grant from the agency.

Reaching patients, growing markets

Caused by genetic mutations, RP causes wide-ranging degeneration of retinal photoreceptor cells and retinal pigment epithelial cells. Symptoms include night blindness, narrowing of the visual field, and decreased visual acuity. It often strikes people in their teens, with many patients rendered blind by middle age. In Japan, an estimated 18.7 people per 100,000 have the condition, according to the Japanese Ophthalmological Society.

As a small biotech with finite funds, Bresge knew the importance of keeping focused on Jcyte’s U.S. development program. "But we didn't want to leave patients in the rest of the world behind," he said. That meant that, while seeking to retain Jcyte's independence in the U.S., the company would need to find a partner that could advance the program ex-U.S. Santen proved a strong fit.

Founded in 2012 by University of California Irvine professors Henry Klassen and Jing Yang, Jcyte is focused on leveraging the release of neurotrophic factors from its cells to "rescue" diseased retinal cells. In RP, that means seeking to preserve vision by intervening in the disease at a time when host photoreceptors can be protected and potentially reactivated.

Santen's establishment of a partnership with Jcyte is part of a broader strategy for the 130-year-old company, which includes not just licensing partnerships, but also near-term commercial endeavors, such as its upcoming launch of its Microshunt device, an alternative to trabeculectomy surgery for people with severe glaucoma, and its Japanese marketing of the VEGF-targeting ophthalmic drug Eylea (aflibercept, Regeneron Pharmaceuticals Inc.). Speaking in January at the J.P. Morgan Healthcare Conference, Shigeo Taniuchi, head of Santen's North America business, said that, as it looks to grow its business in the years ahead, "rapidly growing business in China and Asia is critical element for Santen's longer-term growth."

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