Neurocrine Biosciences Inc. has licensed the Japanese development and marketing rights for its insomnia compound indiplon to Dainippon Sumitomo Pharma Co. Ltd.
Under the terms of the deal, San Diego-based Neurocrine will receive an up-front payment of $20 million and an additional $10 million when indiplon receives U.S. approval, said CEO Gary Lyons.
The California biotech could earn up to another $100 million if other development and commercialization milestones are met, Lyons told BioWorld Today. The company also could receive double-digit royalties based on certain sales achievements, he added.
Indiplon, a non-narcotic nonbenzodiazepine agent that acts on a specific site of the Gamma-Amino Butyric Acid-A receptor, has had its shifts in fortune over the past few years in the U.S. approval process.
Pfizer Inc. in June 2006 pulled out of a deal worth at least $400 million to develop and co-promote the compound worldwide a month after Neurocrine received an approvable letter on its application for indiplon 5-mg and 10-mg capsules and a not approvable letter for indiplon 15-mg tablets.
The FDA approvable letter requested that the firm reanalyze data from certain preclinical and clinical studies to support approval of indiplon 5-mg and 10-mg capsules for sleep initiation and middle-of-the-night dosing. Regulators also asked for a re-examination of the safety analysis for the elderly population.
The not approvable letter for indiplon 15-mg tablets asked Neurocrine to reanalyze certain safety and efficacy data. The letter also questioned the sufficiency of the firm's objective sleep maintenance clinical data with the 15-mg tablet because a majority of the company's studies were conducted with doses higher than 15 mg. Regulators said that additional clinical data likely would be required for the higher dosage.
Neurocrine resubmitted its new drug application to the FDA in June for the lower-dose capsules, Lyons said, adding that the agency has notified the firm that its Prescription Drug User Fee Act date is Dec. 12. (See BioWorld Today, June 14, 2007, and Aug. 23, 2007.)
The company is "working on the plans" to commercialize the 15-mg tablets "in the future," Lyons explained.
Neurocrine currently is seeking new partnerships to commercialize the product in North American and other countries outside of Japan, he said.
The indiplon deal with Dainippon Sumitomo, Lyons declared, is "an endorsement of the commercial potential of the product, not just in Japan, but throughout the world."
He said his firm chose Dainippon Sumitomo to develop and commercialize the product in Japan because of the firm's reputation as a leader of neuroscience products in that country. "We think they will pay adequate attention to this product to get it developed and commercialized as rapidly as possible," Lyons said. "It's a very important product to them. It's a very important deal for us."
Separately, Neurocrine has entered into a sale and leaseback agreement with San Diego-based Veralliance Properties Inc. for its real estate assets, which includes two 3-year-old office buildings built by the firm totaling 200,000 sq. ft. and a vacant parcel, Lyons said. The deal will garner the company $60 million in cash after it pays its mortgage, he said.
Neurocrine plans to lease back its corporate headquarters under a 10-year lease. The firm has the option to repurchase all of the properties in five years at a predetermined price, Lyons noted.
"We own the facilities, so rather than going to the capital equity markets, at this price, it was a very nice nondilutive way of raising money," he said.
The expected $60 million from the real estate deal combined with the $20 million up-front payment from Dainippon Sumitomo and the expected $10 million on indiplon's approval will aid the company in not only meeting, but exceeding its goals of replenishing its financial coffers for this year, Lyons maintained.
"We remain financially strong," he noted.
Shares of Neurocrine (NASDAQ:NBIX) Thursday closed at $9.25, unchanged.