West Coast Editor

Human Genome Sciences Inc.'s Albugon for diabetes drew a development and commercialization deal worth up to $183 million with GlaxoSmithKline plc, which gets worldwide rights to albumin-glucagon-like peptide-1.

"It's the first example of a very short peptide being stabilized with albumin," said Craig Rosen, president and chief operating officer of Rockville, Md.-based HGS.

The agreement sweetened HGS' stock (NASDAQ:HGSI) by 26 cents, ending the day at $9.75.

GSK, of London, is paying an up-front fee along with clinical development and commercial milestone payments that could amount to as much as $183 million, plus more milestones for other indications and royalties.

HGS, which created the compound using its albumin fusion technology - fusing the albumin gene to the gene that expresses the drug protein to extend half-life - will be responsible for making Albugon for Phase I and Phase II trials.

GLP-1 is a peptide hormone that helps maintain healthy blood sugar levels and control appetite. In normal individuals, GLP-1 levels rise during a meal to help the body use and control the elevation in blood sugar levels, but in Type II diabetics that response goes awry. The half-life challenge is an important one with GLP-1, since it normally lasts only about five minutes in the body.

Albumin has "been used a stabilizer for decades in vaccines, but it's always been human albumin that's purified," Rosen said. "This is a recombinant form."

HGS gained the albumin fusion technology from Principia Pharmaceutical Corp., of King of Prussia, Pa., bought four years ago for $120 million in stock. (See BioWorld Today, Sept. 12, 2000.)

"They worked many years designing a yeast strain capable of making albumin without modifying it improperly," Rosen said, adding that "GLP peptide has been around for a long time, and I don't think there really is any intellectual property [related to it specifically]."

Due to the quick half-life, nobody bothered to try an infused therapeutic.

"We've been working on it for a few years here," Rosen told BioWorld Today. "We've done a lot of the checks for Phase I [trials], but GSK will have to go over that."

Other big pharmaceutical firms have found GLP-1 interesting, as well. Last month, Bothell, Wash.-based Nastech Pharmaceutical Co. Inc. chalked up a potential $346 million global alliance with Merck & Co. Inc., of Whitehouse Station, N.J., to develop and commercialize a nasal spray for obesity. Nastech earlier gained worldwide rights to patent applications for intranasal delivery of the spray, called PYY, and the use of GLP-1 in conjunction with it for obesity, diabetes and other metabolic conditions. (See BioWorld Today, Sept. 28, 2004.)

Rosen said dosing once every two weeks or even once a month might be possible with the fusion version HGS has devised.

"I would argue we've enhanced the manufacturing and figured out how to scale up the production," he said, and now GSK will be carrying the ball farther downfield.

Diabetes "right now is the primary indication," Rosen said. "It's been associated with lots of things, including weight loss."