Washington Editor

XenoPort Inc. could receive more than $85 million after agreeing to out-license Asian rights to its lead product candidate, XP13512, to Astellas Pharma Inc.

"We believe this partnership will accelerate the availability of an important therapy to patients," XenoPort CEO Ronald Barrett said during a conference call, "and enhance the commercialization of 512 in Japan and other Asian markets."

He later told BioWorld Today that Astellas matches multiple criteria for the alliance that will "optimize the value of the product in those markets." The deal represents the first-ever drug development partnership for the Santa Clara, Calif.-based company, which has its sights set on more to come.

Terms of the agreement give Astellas exclusive rights to develop and commercialize XP13512 in Japan, Korea, the Philippines, Indonesia, Thailand and Taiwan, and the Tokyo company plans to begin Phase I trials in the middle of next year. Going forward, there is a joint development committee to coordinate both companies' efforts on advancing the compound in their respective territories.

For its part, XenoPort is receiving a $25 million up-front payment and is eligible for up to $60 million more in clinical and regulatory milestone payments. The company also will receive royalties on any sales in Astellas' territory at a percentage rate in the mid-teens.

XP13512, a Transported Prodrug of gabapentin, is a new chemical entity designed to improve the pharmacokinetics and therapeutic benefits of gabapentin, a seizure and pain drug that recently lost patent protection. In particular, its dosing is limited as increased administrations do not equate to higher levels in the body, it has a short half-life and it is absorbed in the upper gastrointestinal area.

"We believe that the combination of these leads to suboptimal therapy, and 512, in clinical studies, has addressed all of these pharmacokinetic deficiencies," Barrett said.

Specifically, human data have demonstrated that oral XP13512 produced higher levels of gabapentin in the blood for a longer period of time than oral gabapentin, and given the investigational product's extended-release formulation, it can continue to work throughout the night if delivered during the evening. A Phase IIa trial showed XP13512 to be effective in managing neuropathic pain in patients with post-herpetic neuralgia, and two separate Phase II studies have demonstrated its effectiveness in treating symptoms in restless legs syndrome patients. In particular, Phase IIb success reported earlier this year led the company to publicly contemplate Phase III plans for restless legs syndrome. (See BioWorld Today, Aug. 3, 2005.)

That trial is scheduled to begin in the first half of next year, and when it does, XenoPort will receive a $10 million milestone payment, and another $5 million upon its conclusion. The proposed U.S.-based study, whose protocol presently is being finalized in talks with the FDA, will evaluate two subjective scales as its efficacy endpoints: the International Restless Legs Ratings Score and the global impression of change. Such a strategy was paved by May's approval of Requip (ropinirole, from GlaxoSmithKline plc), an event that better defined the restless legs syndrome patient population and ways to measure improvements of symptoms.

"It's fair to say that that standard is now there," Barrett said, "and we'll be emulating that in our program."

Eventually, the company plans to expand further development of the compound into post-herpetic neuralgia "when resources become available," he added.

XenoPort had about $78 million in cash reserves at the end of its most recent fiscal quarter.

To that end, additional partnership talks are under way on XP13512 and another clinical compound, XP19986, for the U.S. and other overseas territories. Barrett said such discussions "are proceeding well" and noted that future deals would be forthcoming, although during no specific timeframe. He added that the Astellas deal "influences in a positive way our ability to do a rest-of-world deal." Eventually, XenoPort plans to have its own U.S.-based specialty sales force.

"We believe that partnering will allow us to maximize the value of our clinical candidates," Barrett added, "particularly in penetrating the U.S. primary care and ex-U.S. markets."

In the Far East, XenoPort believes it has found a perfect match in Astellas, a company formed earlier this year through the merger of Fujisawa Pharmaceutical Co. Ltd. and Yamanouchi Pharmaceutical Co. Ltd. With more sales reps than any other Japanese drug company, Barrett pointed specifically to its strengths in central nervous system disorders. XenoPort's president, William Rieflin, called XP13512 "a hand-in-glove fit" with Astellas' current central nervous system portfolio and emerging pipeline.

Beyond XP13512, XenoPort also continues to advance XP19986, a Transported Prodrug of the GABA-B agonist R-baclofen. Already an initial Phase I trial has demonstrated its suitability for twice-daily dosing and showed it to be well tolerated with few adverse events at the doses tested. The company has begun additional studies of XP19986, including a Phase IIa trial in gastroesophageal reflux disease as it modulates the relaxation of the lower esophageal sphincter.

Earlier-stage programs in its preclinical pipeline include an improved L-DOPA product for Parkinson's disease and an oral propofol product for migraines and nausea.

On Thursday, its shares (NASDAQ:XNPT) gained 39 cents, to close at $13.08, as the stock continues to add value over the $10.50 per-share price in the company's $53 million initial public offering last summer. (See BioWorld Today, June 3, 2005.)

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