West Coast Editor

As if poking their fingers into a mincemeat pie, those involved in the development of Macugen are starting to taste the prospective revenue haul from the pegylated aptamer for age-related macular degeneration, approved late last week and priced Wednesday by Eyetech Pharmaceuticals Inc. at $995 per injection into the back of the eye.

The drug is given in a 0.3-mg dose once every six weeks, and New York-based Eyetech said it would provide more details about pricing and launch in a conference call slated for Jan. 5.

Other than Eyetech and its partner Pfizer Inc., also of New York, the winner was Isis Pharmaceuticals Inc., from which Eyetech in 2001 licensed Macugen patents. Isis disclosed Tuesday that it has sold a portion of its Macugen royalty rights to a subsidiary of the finance firm Drug Royalty Corp. (DRC) for $24 million to be paid over the next three years.

Isis' stock (NASDAQ:ISIS) closed Wednesday at $6.01, up 9 cents.

The DRC deal "both accelerates cash for us - which is useful, because we have lots of drugs we think are very exciting - and lets somebody share some of the risk of product uptake," said Lynne Parshall, executive vice president and chief financial officer of Carlsbad, Calif.-based Isis.

Isis and DRC share the royalty rights on Macugen through 2009, after which all royalties go to Isis. Specifically, through 2009 DRC gets royalties on the first $500 million of annual sales. Isis and DRC each get half of annual sales between $500 million and $1 billion, and Isis retains 90 percent of all royalties above $1 billion and all royalties after 2009.

Officially, the deal is with Drug Royalty USA Inc., part of Toronto-based DRC, which was founded in 1992 and lists 25 transactions to buy royalty interests in pharmaceutical products and medical device technologies.

Isis got a $3 million payment following Macugen's approval, bringing total milestone payments to $6 million. The primary license for Macugen comes from Gilead Sciences Inc., of Foster City, Calif., which got the aptamer as part of a $550 million stock acquisition of NeXstar Pharmaceuticals Inc., of Boulder, Colo., more than five years ago. (See BioWorld Today, March 2, 1999.)

A similarly named but separate firm, San Carlos, Calif.-based Nektar Therapeutics Inc., provides Eyetech with PEGylation technology for use in Macugen. Nektar sub-licenses the PEG technology from Enzon Pharmaceuticals Inc., of Bridgewater, N.J.

In April, Eyetech entered a deal with Cambridge, Mass.-based Archemix Corp. for aptamers targeting ophthalmic indications, bringing together a pair of companies that two years earlier had each acquired some of the Selex technology (an in vitro combinatorial chemistry technique) offered by Gilead. In 2001, Archemix had bought the rest of Selex, and Eyetech teamed with Archemix this spring - by which time Macugen's development, of course, was well under way. (See BioWorld Today, April 15, 2004.)

Eyetech's S-1 filing with the SEC makes note of "two license agreements that we believe are material to our business," with Gilead and Nektar.

Rights licensed from Gilead involved paying the latter an up-front license fee of $7 million and issuing a warrant to purchase 833,333 shares of Eyetech's Series B preferred stock at $6 per share. The warrants were exercised in full during the first quarter of this year, the S-1 said.

Also, Eyetech agreed to make payments to Gilead of up to $25 million related to Macugen, along with royalties on a country-by-country basis until 10 years after first sale of Macugen or the expiration of the last-to-expire patent licensed from Gilead in each particular country, whichever comes first.

The U.S. patent rights licensed to Isis by Gilead expire between 2010 and 2017. Corresponding foreign rights include patents that expire between 2011 and 2017 and patent applications, which, if issued, are expected to expire between 2011 and 2019.

In the Nektar deal, Isis paid an up-front license fee of $1.5 million and agreed to make milestone payments totaling up to $4.5 million, along with royalties. Unless both parties agree to extend the deal, it ends upon the run-out of the last-to-expire patent licensed by Isis. U.S. rights expire between 2013 and 2016.

Macugen targets vascular endothelial growth factor, a protein that acts as a signal in triggering the abnormal blood vessel growth and leakage that characterize wet AMD. The compound binds to VEGF 165, a protein that plays a role in angiogenesis and increased permeability, or leakage from blood vessels. (See BioWorld Today, Dec. 21, 2004.)

The approval triggered a $90 million licensing payment to Eyetech from Pfizer, which also is due to buy $15 million of Eyetech's stock within 35 business days. Isis said the royalty deal with DRC was to gain funds for pursuing its own pipeline.

"We have a couple of second-generation drugs in trials and we'll have data on both of those as the year unfolds," Parshall told BioWorld Today, citing ISIS 301012 for high cholesterol, which is in Phase I trials and expected to enter Phase II in 2005, and ISIS 113715 for diabetes, which is in Phase II trials now.

Separately, the firm said Wednesday that a Phase IIa trial with ATL1102 in patients with multiple sclerosis has begun. The compound, partnered with Antisense Therapeutics Ltd., of Melbourne, Australia, is a second-generation antisense inhibitor of an immune system protein called VLA-4 (alpha-4 integrin chain; CD49d), known to play a part in the onset and progression of MS.

"[The ATL deal] is an example of the satellite-company strategy we've had with a number of companies that utilize a portion of our technology," Parshall said, mentioning Oncogenex Technologies Inc., of Vancouver, British Columbia, and Alnylam Pharmaceuticals Corp., of Cambridge, Mass., among others.

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