Retaining U.S. marketing rights for itself, Acusphere Inc. signed a deal with Nycomed Group for the European rights to its lead product, AI-700.

The agreement brings with it potentially $70 million in payments for Watertown, Mass.-based Acusphere, in addition to manufacturing reimbursements and royalties on sales.

"This is one of the largest European licensing deals ever announced for this stage product," said Sherri Oberg, president and CEO of Acusphere, in a conference call Wednesday.

Wall Street responded favorably to the news. The company's stock (NASDAQ:ACUS) climbed 21 percent, or $1.36 on Wednesday, to close at $7.86.

Privately held Nycomed, of Roskilde, Denmark, will take on the responsibility for sales, marketing and regulatory submissions of AI-700 in the member states of the European Union, as well as in Russia and Turkey. AI-700 is an ultrasound contrast agent in Phase III trials for assessing myocardial perfusion in the diagnosis of coronary heart disease.

As part of the agreement, Nycomed is entitled to pay $70 million in license fees, research and development funding, and milestone payments. That includes $12 million in payments over the first two years, consisting of a $4 million up-front license payment and $8 million in research and development funding payable in eight quarterly installments. The remaining $58 million will be paid upon the achievement of certain milestones related to regulatory approvals and sales goals. Acusphere also would receive payments for manufacturing the product for Nycomed, and it would receive royalties on sales.

Oberg said she could not disclose the exact royalty rate, other than to say the percentage Acusphere gets reflects the fact that the company developed AI-700 using its own drug delivery technology. Acusphere was able to "command much higher royalty rates," she said, than it would have if its product was patented and owned by a third party.

Phase III trials of AI-700 began in early 2003. Phase II data reported last week at the American Society of Echocardiography meeting in San Diego showed that the product performed well in comparison with nuclear imaging.

Nycomed plans to submit the marketing authorization application filing for the product in the first half of 2006, about the same time Acusphere files a new drug application with the FDA. Acusphere plans to build its own marketing and sales infrastructure in the U.S., where it retains all rights.

"One of the nice things about having a competitive process is that we were in a negotiating position to construct a deal that we wanted to construct," Oberg said. "And so all of our discussions were for Europe only because our strategy has been to hold onto the U.S. marketing rights."

AI-700 is a dry powder made of perfluorocarbon gas-filled hollow microparticles mixed with sterile water and injected into the body intravenously prior to ultrasound imaging. It is used to assess myocardial perfusion, or blood flow in the heart muscle, a sensitive marker of coronary heart disease. There are no available ultrasound agents, so physicians use the more costly, time-consuming nuclear stress test.

In 2002, about 9.5 million procedures in the U.S. and as many as 2 million in Europe were performed to screen patients with suspected coronary heart disease.

"You can do a $70 million deal in Europe and that's 20 percent of the size of the U.S. market," Oberg said. "I think that underscores the potential of this product on a global basis."

She also pointed out that Europeans are more "cost-sensitive" than Americans, offering Acusphere and Nycomed an opportunity to expand the market overseas since AI-700 is cheaper than nuclear imaging.

Nycomed, a spinout of London-based Amersham plc, employs about 2,800 people and has about $725 million in annual revenues. The company has sales forces in 19 European countries.

"We believe that Nycomed's size increases the likelihood that AI-700 will get significant attention throughout the Nycomed organization," Oberg said.

The Danish pharmaceutical company already is developing and training a hospital specialist sales force to call on European cardiologists for the direct thrombin inhibitor Angiox (bivalirudin). Nycomed holds European rights to Angiox, which it licensed from The Medicines Co., of Parsippany, N.J. Last month, the European Committee for Medicinal Products for Human Use adopted a positive opinion recommending marketing authorization for the product in patients undergoing percutaneous coronary interventions. Angiox is marketed in the U.S. as Angiomax.

Behind AI-700, Acusphere has two products that have completed Phase I trials in the pipeline: AI-850, a formulation of the cancer drug paclitaxel developed using the company's porous microparticle hydrophobic drug delivery system; and AI-128, an inhaled, sustained-release asthma formulation that came out of a terminated joint venture with Dublin, Ireland-based Elan Corp. plc.

Acusphere went public in October, becoming the first life sciences company of the year to conduct an initial public offering. It raised $52.5 million, pricing 3.75 million shares at $14 each. (See BioWorld Today, Oct. 9, 2003.)

Ferghana Partners Group, of New York and London, acted as an adviser to Acusphere on the agreement with Nycomed.

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