The French firm NicOx SA stands to break the bank, to the tune of up to nearly $400 million, per terms of a technology deal with Pfizer Inc.
Notably, the new agreement’s roots stem in part from a previous collaboration between the companies, one that has generated positive data on a glaucoma compound. Such findings clearly played a role in the companies’ decision to enter this broader pact.
"Those results were so encouraging for them," NicOx Chairman and CEO Michele Garufi said, noting that the glaucoma data paved the way for Pfizer to cement its interest in NicOx’s nitric oxide-donating technology by demonstrating that it "can be of help to other ophthalmic diseases."
The deal proved to be an "encouraging signal for the market," he added, and investors readily bought into the story. On Thursday, shares in NicOx (Eurolist:NICOX) rocketed 79 percent to close at €6.02.
In the agreement, NicOx out-licensed exclusive rights to ophthalmic applications of its technology to Pfizer, which Garufi termed "a very important endorsement" of the nitric oxide platform. As a result, NicOx will receive €23 million (US$27.7 million) in the first year of the collaboration, of which €15 million will come from an equity investment by Pfizer.
The €8 million up-front payment includes a €5 million technology exclusivity fee and €3 million in research funding. NicOx, of Sophia-Antipolis, France, also will receive €3 million in research funding on each anniversary of the agreement for the duration of the research program. New York-based Pfizer’s equity investment, subject to NicOx shareholder approval, will take place this year and be made at a 4.9 percent premium to the company’s share price at the time of purchase.
Of course, the big money would come later, and NicOx could receive total milestone payments in excess of €300 million, as well as royalties from resulting ophthalmic products that Pfizer takes to the market.
More specific terms on the agreement’s back end include Pfizer’s option to exclusive worldwide rights on ophthalmic compounds resulting from the research program, and that the potential milestone payments include €102 million that would arise from the successful development and launch of the first ophthalmic compound.
Both companies will conduct the research program through a joint steering committee, and Pfizer will manage and fund the subsequent clinical development of selected compounds.
Garufi pointed to the broad applicability the technology is thought to have in ophthalmology, noting that the deal could lead to new treatments for glaucoma, age- related macular degeneration and diabetic retinopathy. While he declined to specify whether any of those are of a particular priority to Pfizer, he noted that the previous glaucoma deal remains separate from the new agreement.
Of a much narrower focus, that older arrangement could lead to up to €37 million in milestone payments to NicOx, as well as royalties, should Pfizer commercialize the compound. The promising preclinical results on that compound proved the glaucoma treatment to be significantly more effective than an unnamed reference drug in a validated in vivo model of abnormally high intraocular pressure. Also, it was superior to the reference drug in two other validated models.
Demonstrating that nitric oxide donation reduced intraocular pressure was important because that slows disease progression toward vision loss and blindness. To date, NicOx has received €4 million from that deal.
Also in the latest agreement, should the companies identify an indication outside ophthalmology for a resulting compound, Pfizer would have first option on its development and commercialization. NicOx then would be eligible to receive additional milestone payments of up to €194.3 million, if that option were exercised.
In the end, Pfizer would make royalty payments "in line with industry standards" on all marketed products that result from the collaboration.
On its own, NicOx is focused on two lead compounds in inflammation and cardiovascular disease, therapeutic areas in which nitric oxide has a beneficial effect on endothelial dysfunction and tissue inflammation.
Its nitric oxide-donating derivative of naproxen, HCT 3012, is in Phase III development for osteoarthritis. The U.S.-based study, expected to enroll about 820 patients, should produce results in the fourth quarter. It is designed to confirm that HCT 3012 is superior to placebo and as effective as naproxen in relieving the signs and symptoms of osteoarthritis, with no detrimental effect on blood pressure.
In addition, NCX 4016, a nitric oxide-donating derivative of acetyl salicylic acid, is in Phase II for peripheral arterial obstructive disease.