BioWorld International Correspondent

Medivir AB has licensed two HIV drug candidates to Presidio Pharmaceuticals Inc. in return for potential development milestone payments of up to $75.25 million and an undisclosed minority equity stake in the firm.

San Francisco-based Presidio assumes responsibility for developing the two compounds, alovudine (MIV-310) and MIV-410, while Medivir has retained UK and Nordic commercialization rights. It also retained an option on commercialization rights throughout the European Union and would receive royalties on product sales.

The deal is modeled on a similar transaction Huddinge, Sweden-based Medivir recently concluded with San Francisco-based Epiphany BioSciences Inc., which in-licensed the Phase II stage shingles treatment MIV-606 (valomaciclovir). That agreement also involved an equity component.

The transaction is also part of Medivir's wider strategy of exiting the field of polymerase inhibition and focusing its resources on its protease inhibition programs and on its Phase III cold sore treatment Lipsovir.

Medivir HIV Franchise AB, a vehicle established by Medivir to out-license six such compounds, has now found partners for five of them. It already has concluded deals this year with Tibotec Pharmaceuticals Ltd., a subsidiary of New Brunswick, N.J.-based Johnson & Johnson Co., and with New York-based Bristol-Myers Squibb Co. (See BioWorld International, Sep. 20, 2006.).

Negotiations on MIV-160 are ongoing, Bo berg, CEO of Medivir HIV Franchise AB, told BioWorld International.

Presidio, which is focused on developing antiviral drugs, was founded in April 2006 with funding from San Francisco-based Sagamore Bioventures. Its location was a factor in concluding the latest deal, which was brokered by the San Franciso-based merchant bank Burrill & Co.

Presidio is in close proximity to a population infected with multidrug-resistant HIV, which is the target indication for alovudine. "Presidio has an excellent advisory board of clinicians with experience of these patients," berg said.

Interest in the two compounds was sparked by new scientific findings, berg said. Alovudine appears to have potential as a combination therapy. "We have recently found that if you combine the compound with zidovudine you reduce toxicity," berg said. They also appear to act synergistically. The reduced toxicity results from zidovudine blocking the passage of alovudine into the cellular mitochondria. "It stays in the cytoplasm, where the virus is," berg said.

MIV-410, a nucleoside reverse transcriptase inhibitor (NRTI) in preclinical development, has a novel anti-HIV mechanism. Like the Herpes simplex treatment penciclovir, it is a penultimate terminator. "It allows the addition of one further nucleotide," berg said.

Other nucleoside analogues and NRTIs, in contrast, terminate the viral DNA chain immediately. In preclinical studies, it has exhibited activity against HIV mutant strains resistant to thymidine analogues and nucleoside analogues.

In separate news, Medivir also said it would receive a €2.5 million (US$3.3 million) milestone payment from Tibotec arising out of an earlier collaboration in hepatitis C virus drug discovery, following the filing of an application to commence a Phase I clinical trial in Europe.