Lexicon Genetics Inc. stands to make at least $50 million if Takeda Pharmaceutical Co. Ltd. can commercialize a high blood pressure drug directed against targets discovered in Lexicon's Genome5000 program.
On Wednesday, Lexicon and Takeda, of Osaka, Japan, entered a three-year drug development collaboration, which provides Takeda with exclusive access to all of Lexicon's blood pressure control targets. For that, Lexicon received an up-front payment of $12 million.
But by the time the first drug is approved, Lexicon would have received a total of $50 million, the up-front payment included, before royalties, said Julia Gregory, Lexicon's executive vice president, corporate development and chief financial officer.
"Obviously we are very enthusiastic that we are working with Takeda," Gregory told BioWorld Today. "It is the power of the Genome5000 that is allowing us to work with Takeda and to direct all of the pharmaceutically relevant genes for hypertension to the collaboration."
Indeed, Brian Zambrowicz, Lexicon's executive vice president, research, said that by using the Genome5000, Lexicon knocks out and analyzes the function of all potential genes that encode proteins that could be modulated for drug development.
And while Lexicon, of The Woodlands, Texas, partners many targets, the firm also retains a number of promising ones for its internal drug development program.
Lexicon's lead products are LD653 for obesity and diabetes and LD152 for solid tumors. Both candidates are in the preclinical stage.
Lexicon's work focuses on neuroscience, immunology, metabolism, cardiology, cancer and ophthalmology, Gregory said, adding that strategic partnerships allow the company to accelerate multiple therapeutic programs simultaneously. "Clearly partnering gives us a tremendous amount of flexibility in managing our business strategy and financial position," she said.
Lexicon has a collaboration focused on neuroscience drug programs with Bristol-Myers Squibb Co., of New York, and an alliance to discover therapeutic proteins and antibody targets with Genentech Inc., of South San Francisco.
Meanwhile, in the high blood pressure collaboration, Takeda will be responsible for the screening, medicinal chemistry, preclinical and clinical development and commercialization of drugs, and will bear all related costs.
Takeda has the option to extend the discovery portion of the alliance for an additional two years in exchange for further committed funding. Takeda would make research milestone payments to Lexicon for each target selected for development. In addition, Takeda would make clinical development and product launch milestone payments for each product commercialized. Lexicon also could earn royalties on worldwide sales of drugs commercialized by Takeda.
Additional specifics related to the Takeda deal will be discussed today during Lexicon's second-quarter earnings conference call.
Global sales of hypertension drugs exceeded $22 billion in 2003, and the potential market for new hypertension therapies is significant, Lexicon said. The American Heart Association estimates that as many as 50 million Americans have high blood pressure, and that 25 percent of people with high blood pressure are on inadequate therapy.
Lexicon's stock (NASDAQ:LEXG) fell 13 cents Wednesday to close at $6.02.