West Coast Editor

GTC Biotherapeutics Inc. signed partner LEO Pharma A/S to develop and market the recombinant human antithrombin ATryn in Europe, the Middle East and Canada, and the deal includes $70 million in potential milestone payments.

GTC's stock (NASDAQ:GTCB) closed Tuesday at $1.71, up 31 cents, or 22.1 percent.

"We still have rights in the U.S., Japan and other areas of the world," said Thomas Newberry, vice president of corporate communications for Framingham, Mass.-based GTC.

"The goals are to open up partnering discussions in Japan in 2006, and to look at the potential opportunity to establish some commercialization efforts of our own in the U.S.," he said, adding that partnering in the States is "not top of mind at the moment" and GTC has cash reserves to take the firm into the second half of next year.

Terms of the LEO deal call for a $2 million payment to GTC upon signing, and another $3 million related to milestones on the path to getting ATryn approved in Europe, where regulators in September shifted the time period for deciding from late October to February. GTC seeks clearance for ATryn as a prophylactic treatment for hereditary antithrombin deficiency in high-risk situations.

GTC will be responsible for making ATryn and will get a transfer price for all product used by Ballerup, Denmark-based LEO, as well as royalties. LEO will handle sales and marketing in all indications for the agreed territories as well as clinical development for indications related to acquired antithrombin deficiency, such as severe burns, coronary artery bypass graft surgery, disseminated intravascular coagulation and sepsis.

Newberry estimated the worldwide market for ATryn at about $700 million, with most of that in the acquired-deficiency area. Hereditary deficiency is rare - somewhere between 1 in 2,000 and 1 in 5,000 people - and "among that relatively small population, they have to go through some life event [to need antithrombin], because otherwise they're being maintained on a blood thinner," he said.

Which of the acquired-deficiency indications will be pursued first will be decided in mid-2006, after word arrives from the European Medicines Agency and the European Commission regarding sale of the product for hereditary deficiency.

Approval was sought first for hereditary deficiency in Europe because regulators there issued scientific guidance about what would be required of a clinical trial, so GTC had a published, pre-made "special protocol assessment" of sorts there. Meanwhile, in the U.S., a pivotal Phase III trial with ATryn for the same indication is under way. The endpoint in both involves assessing any incidents of deep-vein thrombosis or other thrombo-embolic events.

While still responsible for seeing that ATryn is cleared in Europe, GTC retains all rights to the compound in all other territories. GTC makes its antithrombin, a plasma protein with anticoagulant and anti-inflammatory properties, in transgenic goats by linking the human antithrombin gene to a milk-protein promoter. The method allows for difficult-to-express proteins to be made in a quantity not possible with plasma-based antithrombin.

"If you took all the blood plasma donated by 350 million Americans and devoted it to making antithrombin, you'd get about 100 kg," Newberry told BioWorld Today. "I can make that with 150 goats, and I've got over 1,500 goats. We're replacing a bioreactor with a high-quality farm operation. The economics of large volume can be quite compelling."

LEO, with a total sales and marketing force of 1,000 and a low-molecular heparin product called Innohep (tinzaparin), devotes more than 250 sales representatives to critical care and coagulation management in the areas covered by the deal with GTC. (In the U.S., Boulder, Colo.-based Pharmion has rights to Innohep.)

Last month, GTC filed a shelf registration to raise up to $50 million for its work, noting that its net loss for 2004 totaled $29.5 million, and for the six months ending July 3 was $15.2 million. The company had $6.7 million in cash and cash equivalents and $12.8 million in marketable securities as of July 3, holdings offset in part by $15.6 million in total liabilities, according to paperwork filed with the SEC.