As Indevus Pharmaceuticals Inc.'s overactive bladder product nears the market, the company laid out a U.S. commercialization plan with Zagreb, Croatia-based Pliva d.d.
The agreement includes the establishment of a 500-person sales force and $150 million in committed funding for Indevus if Sanctura - or trospium chloride - gains FDA approval. The money consists of $30 million up front and $120 million in the form of one milestone payment for approval.
Indevus, of Lexington, Mass., could receive another $45 million in future payments from Pliva if Indevus develops a once-a-day formulation of Sanctura. If the drug reaches a long-term commercialization milestone in 2013, Indevus would earn another $20 million.
All told, the deal is worth a potential $215 million - not including commissions or royalties.
"We do not feel we had to make any compromises in the overall financial package," said Glenn Cooper, Indevus' chairman, president and CEO, in a conference call Wednesday.
For six months following the launch of Sanctura, Indevus will receive a commission based on net sales, which will be used to fund its own sales force and promotional costs. Indevus is establishing a sales force of about 280 people who will work with 320 representatives from Pliva's U.S. subsidiary, Odyssey Pharmaceuticals Inc., to sell Sanctura to urology specialists, obstetricians and gynecologists, as well as certain primary-care physicians.
The establishment of a sales force and the costs of launching Sanctura will cause Indevus' burn rate to rise to about $25 million a quarter, said the company's chief financial officer, Michael Rogers.
Beyond the initial six months, both companies have an option to convert the agreement so that Indevus receives royalties and Pliva covers promotional and sales force-related costs. If the companies go to a royalty-bearing arrangement, Indevus would retain its sales force to sell Sanctura.
Rogers declined to detail the royalty structure, except to say it was a "very competitive royalty rate."
Sanctura could receive FDA approval as early as May, when a PDUFA (Prescription Drug User Fee Act) action date is set.
"If we receive approval at that time, we hope to launch it with Pliva in the middle of this year," Cooper said.
Indevus submitted additional data to the FDA in February following a postponement of the original PDUFA date. Phase III data have shown that the product hit endpoints of reduction in frequency of urination and reduction in number of urge-incontinent episodes. The company filed for approval about a year ago. (See BioWorld Today, April 29, 2003.)
If granted, the approval would be for a twice-daily formulation. Indevus is developing a once-daily formulation with Andover, UK-based Shire Pharmaceuticals Group plc.
As part of its agreement with Pliva, Indevus will buy trospium from its European manufacturer, Madaus AG, then supply it to Pliva to distribute. Indevus chose Pliva as a partner due to Pliva's expertise in urology and its willingness to put Sanctura high on its list.
"We never talked to a single major pharmaceutical company that gave us confidence that Sanctura would be a priority," Cooper said.
An 80-year-old company with more than $1 billion in annual sales, Pliva is best known for its discovery of the antibiotic azithromycin, which is sold as Zithromax and Sumamed. The company, which trades on the London Stock Exchange, wanted to expand its operations in the U.S. through its Odyssey subsidiary.
In addition to its desire to expand, the company already had an interest in Sanctura because it markets trospium chloride in Denmark and Finland.
"I think they've had great success in terms of raising market share," Cooper said. "It was just a very nice feature that they were already aware of the product."
Sanctura belongs to a class of anticholinergic compounds known as muscarinic receptor antagonists. The compounds relax smooth-muscle tissue found in the bladder, decreasing bladder contractions and overactive bladder - a condition of urge incontinence that affects about 34 million Americans.
The drug is marketed in Europe as a leading product for overactive bladder and urinary incontinence. Indevus licensed exclusive U.S. rights from Köln, Germany-based Madaus in late 1999.
Outside of Sanctura, Indevus is studying pagoclone for panic and generalized anxiety disorders, citicoline for ischemic stroke, IP 751 for pain and inflammatory disorders, PRO 2000 for the prevention of HIV and other sexually transmitted pathogens and aminocandin for systemic fungal infections.
The company changed its name in 2002 from Interneuron Pharmaceuticals Inc. because it was moving away from neurological drugs and toward in-licensing and developing treatment for anxiety disorders, overactive bladder, inflammatory bowel disease and the prevention of HIV.
Indevus' stock (NASDAQ:IDEV) rose 10 cents on Wednesday, to close at $6.15.