BioWorld International Correspondent

Kick-starting plans to build a regional dermatology sales force in Europe, MediGene AG acquired European marketing rights to the rosacea treatment Oracea from CollaGenex Pharmaceuticals, Inc.

Martinsried, Germany-based MediGene is paying CollaGenex, of Newtown, PA, an up-front fee of $5 million and sales-related royalties of $7.5 million. It also would pay a 12 percent royalty on annual net sales up to $10 million. This would rise to 15 percent on sales above that threshold.

The sales organization also will assume responsibility for commercializing MediGene's genital warts treatment, Polyphenon E ointment, which recently was approved by the FDA. Approval in Europe is expected in early 2008. "We are about to hand in the application. It needs about a year," MediGene spokesman Georg Dönges told BioWorld International. (See BioWorld International Nov. 15, 2006.)

Oracea, a low-dose, oral formulation of the tetracycline antibiotic doxycycline, is approved for the treatment of inflammatory lesions associated with rosacea, a chronic condition associated with flushing and skin reddening that usually affects the face. CollaGenex launched the product in the U.S. in July, having gained FDA approval on March 26.

It expects to gain approval in Europe during 2007, having filed a Marketing Authorization Application with the London-based Medicines & Healthcare Products Regulatory Agency on Feb. 24. The UK will act as a reference country for the application, which will be submitted to other European Union states under the London-based European Medicine Agency's decentralized procedure.

MediGene's sales efforts will have a regional focus initially. "We want to start in the UK and Germany," Dönges said. The sales force will then extend out into neighboring countries, including Ireland, Austria and Switzerland, he said. A team of 30 will cover the two territories. "Our calculation is we have to invest €5 million (US$6.6 million) in the next two years, and then it will be profitable," he said.

MediGene is forecasting €50 million in combined annual European sales from the two products. The company will establish partnerships to cover other territories in Europe. It is also looking to extend its portfolio by in-licensing additional dermatology drugs.

The company's share price gained 4.7 percent on the news, moving from the previous day's close of €6.59 to close at €6.90.

"I think it's quite difficult to judge it now," Martin Possienke analyst at Frankfurt-based Equinet Institutional Services AG told BioWorld International. "My first impression is that it's not clear."

The sales force will essentially follow a specialty pharma in-licensing and sales model, he said, which is not directly linked to the company's own early stage biotechnology platforms in cancer and autoimmune disease. "The gross margins on the products are not that high anyway," he said. The company also is paying third-party royalties on PolyPhenon E and the largest market for its target indication is in the US, Possienke said.

MediGene also entered a research partnership with Sanofi Pasteur, the vaccines arm of Paris-based Sanofi Aventis Group. Sanofi Pasteur plans to use MediGene's monoclonal T-cell receptors (mTCRs) for validating T-cell epitopes important in its vaccine development programs.