With a new drug application for its sedative product, Aquavan, nearing submission, MGI Pharma Inc. decided to add a new drug to its development pipeline, gaining rights to a midstage thrombocytopenia drug from small biotech firm AkaRx Inc.
MGI agreed to pay $45 million up front to Paramus, N.J.-based AkaRx, a privately held spin-off launched in 2005 following the merger of Japanese firms Astellas Pharma Inc. and Yamanouchi Pharmaceutical Co. Ltd. The deal does not include milestones and royalties; instead, Minneapolis-based MGI retains an option to acquire AkaRx for $255 million any time before Jan. 8, 2010. That gives the firm about two and a half years to test AKR-501, a small-molecule thrombopoietin mimetic in three indications, before having to decide whether to exercise that option.
"It's quite a creative structure," said Lonnie Moulder, MGI's president and CEO. MGI is able to "manage the risk and control the development" of AKR-501, and AkaRx gets to see the product in the hands of a firm that has the resources to move it forward. If AKR-501 is approved in three thrombocytopenia indications, MGI estimates that potential peak U.S. revenue could exceed $1 billion.
The drug also is an "excellent operational fit," for MGI, Moulder said. The firm already has in place sales teams targeting hematology and supportive care for its marketed products, Dacogen and Aloxi, and plans to establish an acute care market in anticipation of Aquavan approval. MGI said all three of those areas would be crucial to successfully commercialize a drug for thrombocytopenia.
Characterized by a reduction in platelet count, thrombocytopenia is a condition that can be caused "by a number of disease states," Moulder said, but existing treatments - primarily glucocorticoids and intravenous immunoglobulin (IVIG) - are not always effective in increasing platelet count. AKR-501, a full agonist targeting the c-Mpl receptor to stimulate platelet production, is designed to stimulate platelet reduction, and has shown promising results in Phase I studies, with researchers observing significant increases in platelet count relative to baseline values.
The drug is in an ongoing Phase II trial in idiopathic thrombocytopenic purpura (ITP), and pending positive results, MGI expects to move into a Phase III program in about 18 months. Over the next several quarters, the company intends to begin Phase II testing in hepatitis C-related thrombocytopenia and in chemotherapy-induced thrombocytopenia. Other indications could follow, such as thrombocytopenia associated with myelodysplastic syndromes (MDS).
With AKR-501, MGI enters an increasingly crowded space, though Moulder told BioWorld Today that the drug has some advantages over potential competitors. For one, it can be dosed orally and does not bind to thrombopoietin, unlike AMG 531, a thrombopoiesis-stimulating Fc-peptide fusion protein expected to be submitted for marketing approval in ITP later this year by Thousand Oaks, Calif.-based Amgen Inc. AKR-501 also might prove superior to London-based GlaxoSmithKline plc's Promacta (eltrombopag), an oral drug that acts only as a partial agonist to the c-Mpl receptor. Promacta is in Phase III testing.
Other companies developing thrombocytopenia drugs include Protalex Inc., of New Hope, Pa., which is in Phase I testing with PRTX-100, a purified form of Protein A, a Staphylococcal bacterial protein. Earlier this year, South San Francisco-based Rigel Pharmaceuticals Inc. started an exploratory Phase II study of R788, an oral syk kinase inhibitor, in ITP patients, and San Diego-based Ligand Pharmaceuticals Inc. is in Phase I with its ITP drug, LGD 4665.
"AKR-501 will enter into an already active market," wrote analyst Christopher Raymond, of Chicago-based Robert W. Baird & Co., who reiterated a "neutral" rating on the company. The drug will "need to show significant advantage over incumbent development programs," and a "potential upside likely [may be] a long time in coming."
During a conference call Tuesday afternoon, Bill Spengler, MGI's chief financial officer, said AKR-501 could end up with peak U.S. sales of more than $1 billion if it achieves 30 percent to 40 percent market penetration in each of the ITP, hepatitis C-related thrombocytopenia and chemotherapy-induced thrombocytopenia markets.
Moulder said MGI intends to fund AKR-501 development by shifting resources from its Aquavan (fospropofol disodium) program, which has wrapped up clinical development and is headed for a regulatory submission later this quarter for moderate sedation of patients undergoing diagnostic and therapeutic procedures. And the $45 million up-front payment is "manageable, given our cash position," he added. Therefore, the firm does not anticipate any increases to its overall research and development costs, and continues to project profitability for 2007.
MGI reported revenues of $93 million for the second quarter - nearly all of that coming from sales of its three products: Dacogen (decitabine) for MDS, Aloxi (palonesetron hydrochloride) for chemotherapy-induced nausea and vomiting, and Gliadel Wafer (polifeprosan 20 with carmustine implant) for malignant glioma. The company had a net income $11.1 million, or 13 cents per share, and ended the quarter with $160.1 million.
As part of its deal with AkaRx, MGI also picks up rights to AKR-201, a preclinical-stage compound for thyroid cancer. A metabolite of thyroid hormone, AKR-201 has received orphan drug designation in both the U.S. and Europe.