Medical Device Daily Contributing Writer

LONDON – Biocompatibles International (Farnham, UK) has sealed a deal with AstraZeneca (London) worth a potential €302.3 million ($422.6 million) for a glucagon-like peptide (GLP-1) analogue for treating diabetes and obesity.

As yet, the compound is in discovery. Signing the agreement triggers payment of €8.8 million to complete preclinical development and take the product through to Phase IIa.

"At that point AstraZeneca will decide whether or not to take up the option to license [the product], in which case [it] will assume all further development costs," Crispin Simon, CEO, told Medical Device Daily's sister publication BioWorld International.

"Obviously, if you out-license in preclinical you don't expect to get much. So we're very pleased. The program is paid for to Phase IIa, a cost we would otherwise have had to bear ourselves," said Simon. On exercise of the option, AstraZeneca will pay a fee of €25 million, with further milestones of €37.5 million, payable up to commercialization and sales-related milestones of €256 million. Royalties on sales will vary from single figures to mid-teens depending on volume

The compound is on the edges of Biocompatible's mainstream interest of drug delivery. GLP-1 analogues are emerging as an important class of drugs for treating Type II diabetes, but since the natural form of the molecule has an extremely short half life, the challenge is to come up with long-acting formulations.

The treatment involves the use of the company's drug delivery technology CellBeads, which were implanted in the injury site during the surgery. These are programmed to deliver CM1, a proprietary version of naturally occurring GLP-1, which has been shown to have powerful anti-apoptotic effects.

The delivery mechanism is a cluster of human adult mesenchymal stem cells obtained from a healthy donor and encapsulated in alginate beads. The cells are genetically engineered to produce the protein, which is delivered continuously, directly to the injury site. The alginate beads protect the stem cells from the body's immune system. CellBeads are transplanted within a retrievable mesh device that is removed completely after 14 days, preventing possible long-term side effects.

Simon said much of the preclinical work will focus on how to deliver the drug. "What the product looks like will depend on this work. It will be delivered in a different way from existing GLP-1 therapies and not necessarily with Biocompatibles' technology."

The aim is to offer a superior dosing schedule to Novo Nordisk's liraglutide, which is taken once daily, and to reduce the incidence of nausea, a serious side effect of GLP-1 analogues. "We think if we extend the time with dosing, and/or reduce nausea, it could be a class-leading product," said Simon. "Diabetes is massive and growing, and not terribly well-controlled. Most treatments start to become ineffective after a while. GLP-1 products sit right in the heart of the main area of market development."

The 80-page licensing agreement sets out all future terms should AstraZeneca decide to take up its option. "As soon as [AstraZeneca] believes it will be a clinical and commercial success, the option is ready to go. We're not a biopharmaceutical company, so for our brilliant scientists to come up with something we could license like this is great," said Simon.

The GLP-1 analogue was discovered by Biocompatibles' German subsidiary CellMed, acquired in March 2005. The deal with AstraZeneca excludes neurological applications of GLP-1 products. Earlier in December Biocompatibles announced the first patient was treated in a trial of a GLP-1 product in treating hemorrhagic stroke.

The International Neuroscience Institute (Hannover, Germany), which is running the trial, claims this is the first ever clinical trial for the treatment of stroke with a stem cell product. The first patient was admitted to hospital on October 15 and diagnosed with a haemorrhagic stroke. He made a good recovery from the surgery, there were no safety issues and there are clear signs of improvement from his condition prior to surgery. He has now been discharged from hospital.

In all, 20 patients will be treated in the Phase I/II trial. The primary end-point is safety and data will be gathered on a number of indicators of efficacy.

In other dealmaking news:

• Medtronic (Minneapolis) reported the acquisition of InfluENT Medical's (Concord, New Hampshire) Repose GAHM product line for the treatment of obstructive sleep apnea (OSA). The company said the acquisition expands its Surgical Technologies business unit portfolio of treatments for sleep-disordered breathing. Financial terms were not disclosed.

The Repose Genioglossus Advancement and Hyoid Advancement (GAHA) surgical devices advance the base of the tongue and the hyoid bone to prevent obstructions of the airway during sleep.

"The Repose GAHM devices provide our surgeon customers with another minimally invasive, low-morbidity option to treat patients suffering from OSA," said Bob Blankemeyer, president of the Surgical Technologies business and senior VP at Medtronic.

• Favrille (San Diego) and MyMedicalRecords.com (MMR; Los Angeles), a health information company focused on secure web-based storage of electronic Personal Health Records (PHRs), reported that their merger, previously disclosed in October (Medical Device Daily, Oct. 27, 2008), is now expected to close in January.

"As we had announced earlier this month, two significant conditions for closing the merger, MMR's stockholder vote and settlement with creditors holding more than 85% of the dollar value of all of Favrille's known creditor claims, have been accomplished," said John Longenecker, president/CEO of Favrille. "We are now pleased to announce that a third significant condition, completion of the audit of MMR's financial statements for the years ended 2005 through 2007 is well underway with completion expected in early January. We anticipate closing the transaction in January 2009."

The merger is subject to customary closing conditions including Favrille meeting certain minimum cash requirements as of closing. The audited financial statements for MMR will be available shortly after closing.