A little more than two months after filing for approval of Vivitrex, Alkermes Inc. partnered the alcohol-dependence drug with Cephalon Inc. in a 50-50 profit-sharing deal worth an additional $480 million in up-front and milestone payments.

Upon FDA approval, Cephalon would market the drug in the U.S., while Cambridge, Mass.-based Alkermes would take care of all manufacturing and regulatory filings for Vivitrex, and conduct further development of the compound for different indications.

Cephalon would build a sales and marketing team to target specialists who treat people with alcohol dependence. The two companies would split all costs and profits on a 50-50 basis. The profit sharing would begin after Alkermes assumes up to $120 million in cumulative losses by Dec. 31, 2007, or 18 months after FDA approval, whichever is later. If the losses exceed $120 million within that time frame, they would be borne by Cephalon.

Alkermes submitted the NDA for Vivitrex (naltrexone long-acting injection) in March. The product has priority review status, and Cephalon expects to launch it early next year. Phase III data showed that Vivitrex, in combination with counseling, reduced the median number of heavy drinking days in the overall patient population from 19 days per month to three days per month over a six-month treatment period, when compared with placebo and counseling.

A filed NDA and strong clinical data gave Alkermes what it needed to negotiate a strong deal from Cephalon. The money is big: $150 million in cash up front, another $110 million if the FDA approves Vivitrex, and up to $220 million more in milestone payments connected to certain undisclosed sales levels of the drug.

In a conference call, Alkermes' CEO Richard Pops called the partnership "one of the more highly valued deals for a single drug candidate in late-stage development, which we think underscores the tremendous opportunity that both companies see for this product."

He later told BioWorld Today that Alkermes searched for more than a year for the right partner, trying to find the most attractive deal structure.

"We really wanted to have a classic, almost biotech-to-biotech deal where we shared the profits equally, but also had significant up-front payments where we could drive the commercialization of this product," Pops said. "I think we got both in this deal."

The companies will form a joint commercialization team and will share responsibility for the commercial strategy for Vivitrex. Cephalon will build a new sales force to market the product, while Alkermes will provide the force with a team of treatment system specialists, who will serve as the point of contact for the sales representatives. Alkermes may field its own sales team at the time of the first sales force expansion, Pops said.

Alcohol dependence is an area unfamiliar to Cephalon, but the Frazer, Pa.-based company has a history of building new markets. The characteristics of the Vivitrex market are similar to what Cephalon faced when building the Provigil market for patients with excessive sleepiness.

"When we launched with Provigil, there were already products on the market, amphetamines and Ritalin," said Sheryl Williams, Cephalon's senior director of public relations, "but not a lot of enthusiasm because of the profile of those products."

Likewise, alcohol-dependent patients are not too enthused about taking the once-a-day or three-times-a-day regimens of the current treatments, Antabuse (generic disulfiram), Campral (acamprosate) or ReVia (oral naltrexone; generic).

About 18 million people in the U.S. are dependent on or abuse alcohol, and about 2.3 million adults seek treatment each year, the companies said. Of those getting treatment, most relapse, partly due to their non-compliance with the daily dosing of the drugs.

Naltrexone is a once-daily orally administered drug approved by the FDA in 1994.

"Our development of Vivitrex," Pops said, "reflects our belief that the therapeutic potential of naltrexone can only be obtained by incorporating it into a delivery system that eliminates the need for daily dosing."

Vivitrex uses Alkermes' Medisorb drug-delivery technology to offer a once-a-month injection that releases the drug inside the body for 30 days, making it easier for patients to comply. Naltrexone is not addictive and binds to opioid receptors in the brain, diminishing the craving for alcohol.

Pops said Alkermes plans to pursue further development of Vivitrex in opioid dependency, but has no concrete plans at this time for a label expansion. In terms of an overseas partner, the company currently is in negotiations.

"We may partner with Cephalon outside the U.S., but those discussions are under way," Pops said.

Alcohol is related to more than 60 medical conditions, including heart disease, liver disease, infectious disease and cancer. Its abuse and dependence accounts for about $134 billion in lost earnings each year, the companies said. Alkermes has developed Vivitrex with the use of a Small Business Innovation Research grant from the National Institute on Alcohol Abuse and Alcoholism.

If approved, Vivitrex would become Alkermes' second marketed product in the U.S. Risperdal Consta for schizophrenia is being sold by its partner, Janssen-Cilag, a subsidiary of New Brunswick, N.J.-based Johnson & Johnson.

In addition to Provigil, Cephalon sells Gabitril for epilepsy and Actiq for pain in the U.S., and it acquired Cell Therapeutics Inc.'s cancer drug Trisenox earlier this month. (See BioWorld Today, June 14, 2005.)

Behind Vivitrex, Alkermes has a pipeline of extended-release injectable products and pulmonary drug products. The company's stock (NASDAQ:ALKS) rose 11 cents Friday, to close at $13.21. Cephalon's stock (NASDAQ:CEPH) rose 23 cents, to close at $38.21.