Global private equity firm Celtic Pharmaceutical Holdings LP gained access to a targeted drug delivery technology from IDEA AG, as well as clinical and preclinical products in pain and inflammation, dermatitis and psoriasis.
The deal calls for Celtic Pharma’s subsidiary, TDT, to acquire worldwide rights to IDEA’s Transfersome technology, which is designed for the administration of drugs, including proteins and other large molecules, through the skin. In exchange, TDT will make an undisclosed up-front payment to IDEA, in addition to contingent payments and royalties. TDT also agreed to invest at least $17.85 million for further work with the Transfersome-based portfolio.
"I don’t think it’s an exaggeration to describe this [technology] as a paradigm shift in drug delivery," said Stephen Evans-Freke, co-founder and managing partner of Celtic Pharma. "We’re very excited about this opportunity."
The license includes all forms of Transfersome-based therapeutics, including products in clinical and preclinical development, except for IDEA-033, a non-steroidal anti-inflammatory drug to treat deep pain. Munich-based IDEA intends to develop that product on its own, and is completing Phase III trials in osteoarthritis in Europe.
All products in development comprise existing drugs designed with a Transfersome carrier to locally administer treatments through the skin. However, unlike patches, which can be "very inefficient for getting products through the system," Transfersome-based administration relies on "nanocapsules" containing small amounts of active drugs placed in water-based gels or liquid sprays, Evans-Freke said.
The gel is applied to the skin, and as the water from the gel evaporates, the specially designed chemistry of the nanocapsule travels into the skin’s micropores seeking water, pulling the drug with it.
"The chemistry of the Transfersome can control whether the capsules release their drug just under the surface of the skin, or go down to microvasculature just beneath the skin, or carry on through both those levels down to the deep tissue before they release the drug," he said. This delivery also results in "very high concentrations of the drug delivered to the site, without any of the drug getting into the circulatory system," bypassing systemic side effects.
Clinical and preclinical compounds licensed from IDEA include products for treating skin pain and inflammation, CS dermatitis and psoriasis, onychomycosis and neuropathic pain. TDT also will evaluate other drugs using a Transfersome carrier for other indications.
Celtic Pharma’s interest in the technology started with a 21 percent stake in IDEA in September, even though the equity firm usually doesn’t invest in companies.
"Normally, we won’t take a minority stake in a company," Evans-Freke told BioWorld Today, "but in this case, it was part of a broader strategy."
Operating a little differently from other private equity firms, Celtic Pharma focuses on acquiring and investing in late-stage programs, advancing those programs through regulatory approval, and then selling product rights to pharmaceutical companies to commercialize.
"We’ll buy companies when we have to," Evans-Freke said, referring to last year’s acquisition of Slough, England-based Xenova Group plc. "We bought that mainly because we wanted its drug addiction vaccines."
The deal with Xenova was valued at up to $47.5 million, and added to Celtic’s pipeline vaccines to treat nicotine (TA-NIC) and cocaine (TA-CD) addiction, plus a Phase III drug, TransMID, aimed at treating the glioblastoma multiforme type of brain cancer. (See BioWorld Today, June 27, 2005.)
But mostly the firm focuses on building its own pipeline, one late-stage acquisition at a time. Most recently, Celtic Pharma gained worldwide rights to Xerecept, a peritumoral brain edema drug that began a second Phase III trial early this month. That compound was acquired from Emeryville, Calif.-based Neurobiological Technologies Inc. in exchange for $48 million. (See BioWorld Today, Sept. 21, 2005.)
"We only take into our portfolio products where we already have proof of clinical efficacy," Evans-Freke said. "And we don’t handle commercialization," but prefer to out-license to pharma companies with an established sales force.
The aim of the business model is to invest much-needed capital for advancing biotech candidates through to regulatory approval, and then offering those products as commercial out-licensing opportunities to help fill the growing void in pharma’s pipeline, especially since about a third of existing patents are set to expire within the next five years, Evans-Freke said.
With the addition of IDEA’s technology, Celtic Pharma owns a total of eight late-stage products.
The company is based in Bermuda, and has offices in London and New York.