Delivering to Novo Nordisk A/S the final piece of the puzzle for its inhaled insulin system, Aradigm Corp. handed over patent rights covering glucose control in exchange for $27.5 million in payments.
The agreement gives Bagsvaerd, Denmark-based Novo everything it needs to bring the AERx Diabetes Management System (iDMS) to market, which could occur upon conclusion of a Phase III program in three years. The company restarted trials in May.
Christopher Keenan, Aradigm's director of investor relations, called the restructured partnership the "evolution of an agreement" begun in 1998, when the companies first joined to develop iDMS. But in May 2004, concerns over a secondary endpoint during a Phase III interim analysis led the companies to halt the program, sending Aradigm's shares downward by 29.7 percent and eventually resulting in Novo's $55 million buyout of the development and manufacturing rights to iDMS. (See BioWorld Today, May 3, 2004, and Sept. 30, 2004.)
"The manufacturing piece was [announced in 2004 and] executed in January 2006, and with this transfer of intellectual property, they are really able to collectively have a solid footing in this area to launch it," Keenan told BioWorld Today.
Previously, under the original 1998 agreement, Novo would pay license fees for rights to the iDMS patents. Under the restructured agreement, Aradigm will receive $12 million upon transferring the ownership of certain patents related to inhaled insulin, as well as $8 million for reducing its average royalty rate on the AERx product from 6 percent to 5 percent, and $7.5 million in a 5 percent, eight-year note payable in three payments beginning in six years.
Hayward, Calif.-based Aradigm retains exclusive control of the patents outside the field of glucose control. Every program the company has in development touches upon the patents, Keenan said, including its Phase II program in asthma and another in bioterror-related anthrax. Aradigm also is working on a special formulation of ciprofloxacin for cystic fibrosis and an inhaled pulmonary arterial hypertension drug in partnership with United Therapeutics Corp., of Silver Spring, Md.
The company's stock (NASDAQ:ARDM) shot up 28.6 percent Wednesday, or 40 cents, to close at $1.80.
The trouble with the previous iDMS Phase III program had to do with a delay in post-meal plasma glucose suppression in Type I diabetics. While the drug met primary safety endpoints in the interim analysis, and even though overall blood glucose levels were being controlled, glucose levels following meals were higher in those receiving insulin through the AERx system, as opposed to those given subcutaneous insulin.
Since then, Novo Nordisk has studied the dosing regimen to see if anything could be tweaked. But in the meantime, Nektar Therapeutics Inc.'s Exubera became the first inhaled insulin product approved by the FDA. That approval followed communication by an FDA advisory panel that the agency was not as concerned about post-meal glucose levels as it was about overall glucose levels, Keenan said.
"That was a relief to us, but if we had known that, I don't know if we would have stopped the [iDMS] trial" in 2004, he said.
Exubera gained FDA approval in January. San Carlos, Calif.-based Nektar developed the drug in collaboration with New York-based Pfizer Inc. Analysts have said sales could exceed $2 billion in five years, and inhaled insulin eventually could cannibalize injectable insulin. (See BioWorld Today, Jan. 30, 2006.)
Aradigm said it is the only company working in the liquid delivery of insulin, meaning its product uses no additives or excipients and Aradigm said it is more cost-effective than other prospective products. Its candidate also takes the "guesswork" out of delivering the drug, Keenan said, because it is dosed "in single unit dose increments. There is no math. Patients know how much they need."
Others working in the field include MannKind Corp., of Valencia, Calif., which in March started two Phase III studies of its inhaled insulin product, Technosphere Insulin. A month later, Cambridge, Mass.-based Alkermes Inc. started a third Phase III trial in Type II diabetes comparing its AIR Inhaled Insulin System with injectable pre-meal insulin. (See BioWorld Today, April 27, 2006.)
Diabetes affects an estimated 194 million adults worldwide, or 20.8 million in the U.S. Injectable insulin has been used for more than 80 years to control glucose levels and represents a $3-billion-plus market.
Novo Nordisk and Aradigm expect to gain a share of that pie with iDMS.
"We do hope Exubera does well, and we do hope it paves the way for patient acceptance," Keenan said. "We'd be very happy to be the second to market."