Entering its first major global partnership, privately held Affymax Inc. turned to its Japanese partner Takeda Pharmaceutical Co. Inc. to grant the rest-of-the-world rights to its anemia drug, Hematide.

Money-wise, the deal is big: $105 million up front in cash, $280 million in development and regulatory milestone payments, and up to $150 million in potential commercial milestone payments. The $535 million total value does not account for royalties on sales outside of the U.S., where Takeda will cover all development costs.

Within the U.S., the companies will share development costs, with Takeda taking on the greater burden. If Hematide reaches the U.S. market, Affymax will build its own sales force for co-promotion, and it would share profits equally with Takeda.

As part of their agreement with Osaka, Japan-based Takeda, Affymax officials could not comment beyond the press release.

In a statement, Arlene Morris, president and CEO of Palo Alto, Calif.-based Affymax, said Takeda is an ideal partner because of its development experience and commercial capabilities.

"Takeda has already shown its commitment to Hematide with the rapid filing of an investigational new drug application in Japan," she said, "and we believe will bring a similar dedication to the development of Hematide globally."

The Japanese deal, signed in February, was worth up to $102 million, including a $17 million up-front payment. (See BioWorld Today, Feb. 14, 2006.)

At the time that deal was signed, Affymax was in discussions for a rest-of-the-world partnership, although it did not disclose that Takeda was among those it was talking to. The company had a strategy from the beginning to partner in Japan first, believing that a global partnership would not value the Japanese market to quite the same degree.

Under terms of their deal, Affymax will manufacture and supply the drug substance, and Takeda will be responsible for final packaging and distribution. While the royalties on Japanese sales previously were disclosed to be in the double digits, the companies did not specify a royalty level for sales in other areas outside of the U.S.

Hematide is a synthetic, peptide-based erythropoiesis-stimulating agent (ESA) designed to stimulate the production of red blood cells. ESAs represent a $12 billion market worldwide and as much as a $1 billion market in Japan. Existing ESAs on the market include Thousand Oaks, Calif.-based Amgen Inc.'s Epogen and Aranesp, as well as New Brunswick, N.J.-based Johnson & Johnson's Procrit.

As a second-generation ESA, Hematide could hit the U.S. market sometime in 2010. It is in Phase IIb trials for anemia in dialysis, pre-dialysis and cancer chemotherapy patients. The most advanced trial should be completed later this year, positioning Affymax to enter a pivotal Phase III study in kidney disease in the second quarter of 2007. That trial would be followed by a study in cancer patients, a program that is about nine to 12 months behind kidney disease.

ESA therapy has reduced the need for blood transfusions and the frequency and severity of anemia-associated morbidity. The market could grow beyond $12 billion if Hematide is approved for oncology indications. Currently, ESAs are approved only for renal diseases.

An advantage of Hematide is its once-a-month injection, compared to current therapies that are injected several times a week or, at the very least, once every two or three weeks. The product also has an amino acid sequence that is unrelated to erythropoietin and is, therefore, unlikely to generate antibodies, Affymax said.

Affymax last raised $60 million in a Series D financing in July 2005, providing it with at least two years of cash. Added to a global partnership for Hematide it is unlikely it would need to raise money anytime soon. (See BioWorld Today, July 19, 2005.)