BioWorld International Correspondent

Two years ago, Medivir AB didn't have any activity in the area of hepatitis C virus protease inhibition. This week the company disclosed a licensing deal with Tibotec Pharmaceuticals Ltd. for a preclinical project under which it will garner a €6.5 million up-front payment and perhaps another €62 million in milestones, plus undisclosed research funding and royalties on eventual product sales.

It also has retained Nordic marketing rights to any product that emerges. In addition, it has negotiated an option agreement that would, on reaching an undisclosed clinical milestone, entitle it to gain either an additional payment or Nordic marketing rights to an agreed-upon product from the portfolio of New Brunswick, N.J.-based Johnson & Johnson, Tibotec's parent company.

"We have some in mind. There might be some others entering the market fairly soon. That discussion has to be triggered in a few years' time," said Rein Piir, chief financial officer and head of investor relations at Huddinge, Sweden-based Medivir. The company is interested, he said, in gaining access to a niche pharmaceutical that would generate annual sales in the Nordic region of about SEK50 million (US$7.4 million). It is part of Medivir's ongoing strategy of building a sales force to address the Scandinavian market.

Medivir and Tibotec, of Mechelen, Belgium, will collaborate on further preclinical development of the HCV program, which is focused on the discovery and development of orally active inhibitors of NS3/4A serine protease. That enzyme catalyzes the proteolytic processing of the HCV polyprotein, an essential step in the replication of the virus.

"Hepatitis C is the hotspot of virology," Piir said, citing a Datamonitor forecast that predicts the market will expand almost threefold in the next six years to $9 billion.

In less than two years, Medivir has discovered several classes of compounds that have drug-like properties and that exhibit antiviral activity in cell-based assays. The company has developed several profiling, modeling and validation processes that collapse the time required from the initial idea to lead optimization, Piir said.

"Our competitive edge is in the early preclinical stages," he said. "We had been approached by many companies, and the question was how much would we gain by waiting."