Citing events "external" to their working relationship, Dyax Corp. and Genzyme Corp. ended a four-year-old joint venture to commercialize DX-88 in hereditary angioedema.

Under the "mutual termination," Dyax will regain full worldwide ownership of DX-88, a kallikrein inhibitor in Phase III development in HAE, as well as $17 million in cash from Genzyme, which will be used to offset additional development costs, Henry Blair, Dyax chairman and CEO, said during the company's earnings call.

Dyax assured investors that the decision was not related to the anticipated release of pivotal data from the 72-patient EDEMA3 trial. Blair said data remain blinded and "neither Genzyme nor Dyax has any knowledge of the results," at this time. Pending those results, plus results from a second Phase III study set to start this quarter, Dyax still is anticipating a U.S. market launch "sometime in late 2008.

"There's no change in any of our development timelines," he said, and, in fact, called the news a "positive outcome for Dyax."

Wall Street's reaction was less enthusiastic, but that likely was due to the wider-than-expected loss reported in the company's fourth-quarter earnings. The net loss for the last three months of 2006 was $20.2 million, or 46 cents per share. Analysts had projected a loss of 24 cents per share. Shares of Dyax (NASDAQ:DYAX) fell as low as $3.27 Wednesday, though they rebounded somewhat to close at $4.25, down 8 cents.

The two Cambridge, Mass.-based firms began collaborating on DX-88 in HAE in 1998, and in 2003 Genzyme exercised the joint venture option. That deal called for Dyax to handle clinical, regulatory and manufacturing activities, while Genzyme agreed to take over commercialization efforts upon product approval. But Genzyme's position has changed in the past four years, and it is now looking at supporting 20 internal pivotal programs, among them the cancer drug Mozobil, which it acquired in its $584 million fourth-quarter buyout of Vancouver, British Columbia-based AnorMed Inc. (See BioWorld Today, June 25, 2003, and Oct. 18, 2006.)

"The economics of the joint venture no longer fit with Genzyme's pipeline," Blair said. However, Genzyme will get, as part of the termination arrangement, 4.4 million shares of Dyax, which, in addition to prior investments, would give Genzyme about 10 percent ownership in Dyax.

"That allows Genzyme to continue to participate" in the future of DX-88, he said.

For Dyax, the deal restores 100 percent of the worldwide rights to the HAE drug, which also has shown promise in a second indication, the prevention of blood loss during on-pump coronary artery bypass graft (CABG) surgery. Dyax owned full rights for that second indication, but the fact that it involved the same molecule and formulation of DX-88 "created issues," Blair said, "and limited our ability to optimize the value of the asset."

Without the encumbrance of the joint venture, Dyax is free to seek other partners or possibly consider commercialization on its own, though Blair said that "no decision has been made yet."

Right now, the company is gearing up to begin the 52-patient confirmatory Phase III study of DX-88. Though Dyax initially hoped to file a biologics license application based on results from the EDEMA3 trial, the FDA said in September that the additional trial would be needed. EDEMA4, which will be conducted under a special protocol assessment, aims to start later this quarter to evaluate 30 mg of DX-88 delivered subcutaneously in patients with HAE, an inherited disorder that results in instances of swelling in the hands, feet, limbs, face, intestinal tract or airway.

There currently are no existing therapies for HAE, though Dyax's DX-88 is in a race to the market with several other drugs, including New York-based Lev Pharmaceuticals Inc.'s C1-esterase (C1-INH), which recently completed patient enrollment in a Phase III trial for an expected BLA filing in the first half of this year. Icatibant, a synthetic peptidomimetic from Cranbury, N.J.-based Kos Pharmaceuticals Inc. (which recently was acquired by Abbott Laboratories) and Berlin-based Jerini AG, received mixed reviews following two Phase III studies reported in September. And Pharming Group, of Leiden, the Netherlands, has shown promising data in Phase II/III studies of its recombinant human C1 inhibitor in HAE. (See BioWorld Today, Sept. 25, 2006.)

Beyond HAE, Dyax continues to advance DX-88 for preventing blood loss during CABG procedures, as well as heart valve replacement and repair procedures. The company also has a preclinical pipeline, developed using its phage display technology, in the areas of oncology and inflammation.

As of Dec. 31, Dyax had cash, cash equivalents and short-term investments totaling $60.5 million. Those funds, plus the $17 million from Genzyme, are expected to carry the company into 2008.