Washington Editor

Swiss biotech Addex Pharmaceuticals has granted rights to Merck & Co. Inc. to develop ADX63365, an investigational treatment for schizophrenia, in a deal potentially worth $702 million.

Under the agreement, Whitehouse Station, N.J.-based Merck will pay Geneva-based Addex $22 million up front, Tim Dyer, Addex's chief financial officer, said Thursday in a conference call. The biotech could bank up to $455 million in research, development, regulatory and sales milestones if a product makes it to market for the schizophrenia indication and a second undisclosed indication.

Additionally, Dyer said, the Swiss firm could receive up to $225 million in milestones if a second product based on ADX63365, a positive allosteric modulator (PAM) that targets the metabotropic glutamate receptor 5 (mGluR5), achieves approval in at least two indications.

Addex also is eligible to receive an undisclosed amount in royalties on sales of any products resulting from the partnership, he added.

The deal calls for Merck to be responsible for clinical development of ADX63365, Addex CEO Vincent Mutel told investors and analysts. He noted that his firm has the option to co-promote products based on ADX63365 in certain EU countries and will participate in a joint oversight committee led by Merck for further development of the compound, which currently is in the preclinical stage.

The terms of the Merck agreement, Mutel said, prohibited him from disclosing what indications, other than schizophrenia, would be investigated for the compound.

In addition to ADX63365, the Merck deal includes mGluR5 PAM backup compounds discovered by Addex, Mutel said.

In preclinical testing, he added, mGluR5 activation has shown antipsychotic effects similar to drugs approved to treat schizophrenia. However, Mutel insisted, mGluR5 activation has not shown signs of adverse effects, such as weight gain, extrapyramidal symptoms and hyperprolactinemia, associated with currently marketed antipsychotic medications.

In addition, he said, in preclinical models, mGluR5 activation has demonstrated reversals in cognitive dysfunction, whereas currently marketed antipsychotic products, such as D2 blockers, do not reverse cognitive decline.

Targeting mGluR5, Mutel noted, is a new approach in treating schizophrenia, a condition characterized by delusions, hallucination, neurosis, depression and antisocial behavior that affects more than 1 percent of the U.S. adult population. Only about one in five people diagnosed with schizophrenia fully recover, demonstrating "quite a large" medical need for new products to treat the condition, Mutel maintained.

He noted that sales for Indianapolis-based Eli Lilly and Co.'s Zyprexa (olanzapine) and New Brunswick, N.J.-based Johnson & Johnson's Risperdal (risperidone) reached about $4.5 billion each in 2007.

Mutel said he expected Merck to rapidly move to develop and commercialize ADX63365, which he called "one of the most, if not the most advanced product in this field today," to ensure the New Jersey pharmaceutical giant keeps its competitive edge in the mGlu receptor space. "We are ahead of the crowd . . . and I don't think Merck is considering not to keep this advantage." Merck, he added, is "the most knowledgeable" of the big pharma firms in researching products that target the mGlu receptors.

The deal for ADX63365 is the second recently announced collaboration between Addex and Merck to develop products targeting mGlu receptors, Mutel explained. Last month, the companies inked a deal worth up to $170 million to discover and development selective mGluR4 PAMs for Parkinson's disease. (See BioWorld Today, Dec. 4, 2007.)

Addex also has a deal with J&J, signed in 2004, to discover and develop mGluR2 PAMs for schizophrenia and anxiety, Mutel said.

In addition to mGluR PAM products, Addex's investigational pipeline includes a negative allosteric modulator (NAM) that targets mGluR5, including its lead compound ADX10059, which is being developed to treat gastroesophageal reflux disease, migraines and anxiety disorders.

During Thursday's conference call, Charlotte Keywood, Addex's chief medical officer, noted that results of a double-blind, placebo-controlled Phase IIa trial of ADX10059 revealed that the compound did not reduce acute anticipatory anxiety in patients with dental anxiety.

However, she said, some signs of anxiolytic activity were observed in the study, which involved 50 patients in the UK with moderately severe dental anxiety who underwent routine dental procedures.

Patients received a single 250-mg dose of ADX10059 or placebo 60 minutes before a dental procedure. Anxiety was measured at specific time points before, during and after the procedure using a subjective rating scale, called the Visual Analogue Scale (VAS) of anxiety, Keywood noted.

However, she acknowledged, the primary endpoint of VAS anxiety at 60 minutes after dosing immediately before the start of the dental procedure did not show a statistical difference between ADX10059 and placebo.

Keywood said her firm will complete analysis of the study's data before deciding future plans for ADX10059 in the anxiety indication.