A little more than a year after Abraxane gained FDA approval as a treatment for breast cancer, its developer, Abraxis BioScience Inc., has signed a co-promotion agreement with AstraZeneca plc, essentially doubling the promotional investment of the product.
In a separate deal, London-based AstraZeneca divested its U.S. anesthetic and analgesic products - which had sales of $217 million in 2005 - to Abraxis, now one of the largest manufacturers of injectable pharmaceuticals products for critical care use in hospitals and clinics.
"In doing this, we were able to not only build the injectable side of the business with the branded portfolio from AstraZeneca," said Christine Cassiano, Abraxis' director of corporate communications, "but also, very quickly double our sales force for the promotion of Abraxane."
Abraxis' stock (NASDAQ:ABBI) responded favorably to the news, climbing $1.97 Thursday, or 6.5 percent, to close at $32.42.
Deal Adds Support, $200M Up Front
The co-promotion agreement entails a $200 million up-front payment to Los Angeles-based Abraxis, which was formed through the $4 billion merger of American Pharmaceuticals Partners Inc. and its parent company, American BioScience Inc. That merger completed earlier this month and was announced last November. (See BioWorld Today, Nov. 29, 2005.)
When they were separate, each company owned 50 percent of the rights to Abraxane.
"When both companies merged together, it came back to owning 100 percent of the rights," Cassiano told BioWorld Today, adding that the closing of the merger is what enabled Abraxis "to negotiate a deal such as this."
The agreement calls for AstraZeneca to match Abraxis' current number of sales representatives dedicated to Abraxane, providing more expertise and manpower to help customers "better understand the science" behind the drug, Cassiano said.
Abraxane is based on Abraxis' nanoparticle albumin-bound (NAB) technology. It combines paclitaxel with the natural protein albumin and is formulated into a nanoparticle one-hundredth the size of a red blood cell, allowing for higher dosing levels because it eliminates the need for a toxicity-causing solvent.
Abraxis and AstraZeneca equally will share all costs associated with advertising and promotions of Abraxane in the U.S. and the costs of certain clinical trials. Abraxis is entitled to undisclosed milestone payments if Abraxane is approved for new indications within certain timelines. The drug is being developed to treat first-line metastatic breast and non-small-cell lung cancers, as well as adjuvant breast cancer, neo-adjuvant breast cancer, malignant melanoma, and ovarian, prostate, pancreatic, gastric and head and neck cancers.
It gained FDA approval in January 2005 as an injectable suspension to treat breast cancer after failure of combination chemotherapy for metastatic disease or relapse within six months of adjuvant chemotherapy. Abraxis reported Abraxane sales of $134 million in 2005 for its first 11 months on the market. Analysts have predicted the drug could bring in annual sales of $500 million within three years. (See BioWorld Today, Jan. 11, 2005.)
The co-promotion agreement takes effect July 1 and will run for five and a half years, during which AstraZeneca will receive a 22 percent commission on net sales of Abraxane, as well as a trailing commission of 10 percent for the first year and 5 percent for the second year following the term. Abraxis remains responsible for all clinical and regulatory development, manufacturing and distribution of Abraxane, while AstraZeneca holds a right of first offer to license or co-promote Abraxane outside the U.S.
Abraxis is working on a regulatory filing of Abraxane for Europe and is nearing that stage in Japan with partner Taiho Pharmaceuticals Co. Ltd., of Tokyo. That partnership, worth more than $50 million, was formed in November. (See BioWorld Today, Nov. 17, 2005.)
Abraxane already is before regulatory authorities in Canada.
Abraxis Pays $350M To Build Injectable Business
Abraxis also holds a right of first offer to purchase or license AstraZeneca's branded anesthetics and analgesics portfolio outside of the U.S.
For the U.S. rights, the company is paying $275 million at closing and another $75 million on the first anniversary of closing. AstraZeneca will supply the products for an initial term of five years.
The products include the anesthetic agents Diprivan (propofol) and Naropin (ropivacaine), as well as local anesthetics EMLA (Eutectic Mixture of Lidocaine and Prilocaine), Xylocaine (lidocaine), Polocaine (mepivacaine), Nesacaine (chloroprocaine HCl Injection), Sensorcaine (bupivacaine) and Astramorph (morphine sulfate injection).
The acquisition adds 100 dosage forms to Abraxis' existing 300 dosage forms currently manufactured and marketed. That should "really position Abraxis to be one of the largest manufacturers of injectable pharmaceuticals for this sector" of critically ill patients in hospitals or clinics, Cassiano said.
Abraxis' injectable division has received eight FDA approvals this year and 23 abbreviated new drug applications currently are under review.
Under their agreement, AstraZeneca will make Abraxis its preferred partner for injectable products when patents on the acquired products expire. Cassiano said the expiration dates of the patents are not being disclosed, except for the Naropin patent, which expires in 2012.
The sale is subject to government clearances.