Xenon Pharmaceuticals Inc. found a partner for its protein therapeutic program in anemia, agreeing to a potential $51 million research collaboration and licensing deal with F. Hoffmann-La Roche Ltd.

The companies will work together during the two-year research terms to investigate the target hemojuvelin (HJV), a defective protein discovered by Xenon that underlies juvenile hemachromatosis. That protein appears to "play an important role in the regulation of red blood cell production and, therefore, iron in the blood," said Vijay Sondhi, chief financial officer of Vancouver, British Columbia-based Xenon.

In the U.S., the anemia market is about $10 billion per year and growing, and the world's top treatments are Epogen, from Thousand Oaks, Calif.-based Amgen Inc., and Procrit, from New Brunswick, N.J.-based Johnson & Johnson. Both of those drugs are erythropoiesis-stimulating agents designed to stimulate the production of red blood cells.

Targeting HJV also might facilitate the production of red blood cells by reversing "the iron disturbances that are observed in anemia patients and facilitate red blood cell production," Sondhi said.

Xenon opted to seek a partner for the HJV program since its focus primarily is small-molecule drugs and "protein therapeutics are not directly in our area of expertise," he said. "We looked at the biologics market, engaged some of the top players and decided to do the deal with Roche."

The Roche Venture Fund, Roche's investment arm, agreed to purchase $7 million in Xenon stock. Over the course of the collaboration, Xenon could receive up to $44 million in development and regulatory milestones for the first product, with additional payments for any subsequent products.

Roche would pay Xenon undisclosed royalties on any product sales, though Xenon would retain a co-promotion option in Canada.

"It's always important to us to retain some co-promotion rights in our own country," Sondhi told BioWorld Today, "and it will give us the ability to build our own sales force."

The agreement also provides Roche with the option to commercialize HJV-based diagnostics, and an opportunity to develop any small-molecule HJV inhibitors that might be developed by Xenon.

"It's been a busy year," Sondhi said.

The company began 2006 with a $31 million financing to advance its lead products, and the Roche collaboration marks the second deal Xenon has signed in the last few months. The company in October licensed exclusive rights for Osaka, Japan-based Takeda Pharmaceutical Co. Ltd., to develop pain product, XEN401, in Japan and certain Asian countries. Takeda agreed to purchase $5 million in Xenon stock and make up-front, milestones and sales-based milestone payments of up to $75.5 million. (See BioWorld Today, Oct. 3, 2006.)

Xenon anticipates filing an investigational new drug application for XEN401, a nonopioid analgesic, in the first quarter, with Phase I testing expected to begin in the middle of next year. The company also expects to move its cardiac arrhythmia drug, XEN501, into the clinic about the same time.

Earlier in development, Xenon is working on small-molecule inhibitors of DMT1 to treat iron overload disorders, which are about two years from the clinic, and has a discovery program in HDL and atherosclerosis.

Xenon extended its SCD1 research collaboration with Basel, Switzerland-based Novartis AG, which was signed in 2004 to develop small-molecule modulators in metabolic indications. In that deal, Xenon could receive up to $157 million in pre-commercial payments. (See BioWorld Today, Sept. 22, 2004.)

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