BioWorld International Correspondent

Speedel AG is retaining all development and commercialization rights to SPP200 (pegmusirdin), a thrombin inhibitor in development for clot formation in grafts fitted to renal failure patients undergoing chronic hemodialysis, following a decision by Abbott Laboratories not to exercise its option.

Abbott, of Abbott Park, Ill., gained ownership of SPP200 through its 2001 acquisition of Knoll AG from BASF AG, of Ludwigshafen, Germany, and out-licensed it to Speedel in 2003.

It had a call-back option on the program, which was exercisable on completion of an initial Phase II trial.

Basel, Switzerland-based Speedel said portfolio considerations determined Abbott's decision not to take SPP200 forward.

The company now is evaluating its options with respect to the program and will consult with the FDA as part of the process.

Additional work would need to be completed before SPP200 could move into pivotal trials, Speedel CEO Alice Huxley said.

"How much or how little remains to be seen after the consultation with the FDA," she said.

Top-line results from the Phase II study of 127 patients who were treated with either SPP200 or unfractionated heparin, currently the gold standard for treatment in the U.S., indicated the frequency of vascular graft occlusions was "significantly lower" in those who received SPP200. Those on the SPP200 treatment arm had a probability of developing a vascular graft occlusion about three times lower than those receiving heparin.

Major bleeds were rare with either treatment, although minor bleeds were more frequent in the SPP200 treatment group. "The major focus of the medical community is on the major bleeds," Huxley said.

The trial data are based on a cumulative total of 9,000 dialysis sessions. Speedel is not releasing further information on the trial, but plans to publish or make a full presentation at a conference on the data shortly, Huxley said.

SPP200 is a recombinant, pegylated protein based on hirudin, an anticoagulant peptide found in the salivary glands of medicinal leeches. It has a duration of action of more than 100 hours, Huxley said, and, unlike heparin, is not washed out of the body following hemodialysis.

"It protects the patient against this coagulation not only during the hemodialysis session, which the gold standard unfractionated heparin does, but also in between," she said.

There was little movement last week in Speedel's share price in response to the news. The stock closed Aug. 16 at CHF144.60 (US$117.73), down CHF1.40.

Bob Pooler, analyst at Geneva-based Lombard Odier Darier Hentsch, said that the Abbott withdrawal did raise questions about partner validation.

"If Abbott doesn't see any potential in it, what's in it for Speedel?" he asked. However, his peak sales estimate for the product - CHF300 million - is "really just below the radar screen for Abbott," he added.

The consultation with the FDA should help Speedel calculate the development costs for the product, which is likely to have the biggest bearing on whether the company will take the product forward on its own, with a partner - or at all, Pooler said.

The marketing costs would be minimal. "It's a niche product. They need 20 sales reps to cover the U.S. market," he said.

The product has less potential in Europe, where the creation of an arteriovenous fistula in patients undergoing hemodialysis is a more popular alternative than the fitting of a graft, Pooler said.

Over time, that procedure might become more popular in the U.S., as well, he added, as it eliminates the necessity for costly graft replacement. "We're assuming that vascular grafts are declining." At present, he estimates the total annual cost at $700 million.

Speedel also reported yesterday a net loss of CHF25.4 million, or CHF3.65 per share, for the second quarter. The company burned CHF16.5 million and exited the quarter with CHF149.1 million on its balance sheet. That includes a cash injection of CHF2 million, associated with the early conversion of a convertible loan. The company will book an additional CHF13.9 million in the next quarter in connection with the same transaction.

Under the terms of the original August 2005 agreement, conversion from debt to equity was permitted at a total price of CHF125 per share, comprising CHF100 of convertible debt and CHF25, which was payable in cash on conversion.

The company is maintaining its guidance of CHF80 million cash burn for the full year and said it has sufficient funds to last through the first quarter of 2008.