BioWorld International Correspondent

PARIS - TAP Pharmaceutical Products Inc. terminated the license agreement it started with Flamel Technologies in September 2004 for the use of the latter's Micropump technology to deliver Prevacid.

Prevacid contains lansoprazole, a proton pump inhibitor, and is used to treat gastrointestinal disorders such as heartburn, dyspepsia and acid-reflux disease.

TAP Pharmaceuticals, of Lake Forest, Ill., a joint venture between Abbott Laboratories, of Abbott Park, Ill., and Takeda Pharmaceutical Company Ltd., of Osaka, Japan, has completed several trials of the Micropump formulation of lansoprazole, but has decided to switch to an enantiomer of lansoprazole for a Phase III trial.

Flamel's American depository shares (NASDAQ:FLML) fell 24 cents Tuesday, the day the news hit the market in the U.S., to close at $16.03, after trading as low as $14.35.

The agreement had provided for TAP to pay all costs of further development and testing of the Micropump formulation of lansoprazole, as well as handle the regulatory filing and marketing. It gave Lyon, France-based Flamel Technologies the possibility of earning more than $100 million in milestones, as well as receiving royalties on sales of the product.

TAP had said it hoped the Micropump formulation might "boost its sales of Prevacid," as the drug already existed in other formulations, including Prevacid SoluTab and Prevacid IV.

CEO of Flamel Stephen Willard told BioWorld International that Flamel "met all the goals set by TAP," triggering the payment of a $1.5 million milestone in the first quarter of this year. "We were all set to go on to Phase III," he added. But he acknowledged that the Micropump formulation had been "very much in competition" with the product TAP has elected to go forward with. He also said that the letter Flamel received from TAP informing it of the latter's decision to terminate the agreement had been "very positive," but he could not elaborate. The termination will take effect in December.

Willard insisted that the Micropump formulation of lansoprazole was an "excellent product" and that Flamel intended to find another partner to develop it if it could not go forward with TAP. "There is nothing to prevent us from marketing it to someone else," he said.

TAP gave no official reason for dropping the Flamel formulation, although it released a statement saying it was "initiating Phase III studies for an investigational new product, TAK-390MR, for the treatment of acid-related disorders," adding that the product, licensed from Takeda, "employs a new modified-release technology on an enantiomer of lansoprazole." The trial is to be conducted on more than 5,000 patients.

Micropump is a controlled-release, taste-masking system for the oral administration of small-molecule drugs. It is one of two polymer-based drug delivery systems developed by Flamel, the other being Medusa, a nano-particulate system designed to deliver therapeutic proteins and peptides.

Willard became CEO of Flamel in June, after the company's founder and former CEO, Gérard Soula, resigned following a disagreement with its main investors.

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