Cypress Bioscience Inc. could receive between $200 million and $250 million through a deal for milnacipran, its Phase III product for fibromyalgia syndrome, a common cause of chronic and widespread pain.
The San Diego-based company partnered milnacipran's U.S. development and marketing rights to Forest Laboratories Inc. Specific financial terms were not disclosed, though Cypress acknowledged that it could reap between $200 million and $250 million in total up-front and milestone payments. Also, New York-based Forest would pay Cypress a royalty on sales and will fund all continuing development activities, which will be managed jointly by both firms.
"We're a small biotech company and recognized from the first day that we didn't have the right infrastructure to handle the marketing and commercialization of this product," Sabrina Martucci Johnson, Cypress's chief financial officer, told BioWorld Today. "While we really didn't need to partner it until commercialization, we made a decision that it may make sense to partner it sooner. There was a lot of interest, the economic terms made sense, and the companies that were interested in the product were of the top caliber."
She said the deal's undisclosed up-front payment was in line with Cypress's hopes and expectations, adding that the milestone payments are balanced on all ends of the agreement.
Cypress, which licensed milnacipran from Pierre Fabre Medicament SA, already began the pivotal program for fibromyalgia syndrome (FMS), a disease for which there are no approved products, though it is estimated to affect 6 million to 12 million Americans. Pierre Fabre, the pharmaceutical division of Paris-based bioMerieux Pierre Fabre, has marketed the compound in Europe for depression for several years.
Forest will be responsible for U.S.-based sales and marketing activities, with Cypress retaining the option to co-promote up to 25 percent of physician details. Martucci Johnson said the optional promotion provision provides Cypress the opportunity to lay the groundwork for potential marketing in the future.
The company is exploring additional in-licensing opportunities for other late-stage or commercial compounds, she said, noting that the timing of the Forest contract provides Cypress more flexible financial and human resource capabilities to pursue new prospects. Martucci Johnson also stressed other factors that pointed to the decision to partner with Forest.
"It is an organization that has strong relationships with key prescribers, which in this case are primary care physicians," she said. "We also wanted someone with proven success in launching and marketing products to those physicians."
Martucci Johnson added that Forest's interest in maintaining Cypress's role in further developing the compound proved valuable to the deal as well. Cypress holds two patents covering the use of milnacipran for FMS, both of which expire in 2021. The compound, which inhibits the reuptake of both norepinephrine and serotonin, also qualifies for five years of marketing exclusivity upon approval under Hatch-Waxman legislation.
Enrollment in the first study of the Phase III program is underway at 30 U.S. sites. The study includes male and female outpatients with a primary diagnosis of FMS who meet other entry criteria. The entire program, which Cypress said could possibly be completed in 2006, is based on the results of a 125-patient Phase II study that showed that milnacipran provided statistically significant improvements in multiple measures of clinical pain and other secondary symptoms, including fatigue, mood and patient global status reports. The Phase III program consists of multiple randomized, placebo-controlled trials. If successful, a new drug application for FMS could be submitted later in 2006. (See BioWorld Today, Oct. 22, 2003.)
"We need at least two positive trials for approval," Martucci Johnson said. "Now that we have this partnership in place, we need to sit down with Forest and agree upon the next stages of development."
Approved for non-pain indications in 22 countries, the compound has been used by more than 2 million patients for more than six years outside the U.S. Cypress first gained rights to milnacipran from Pierre Fabre in August 2001. Cypress received an exclusive license to develop and sell any product with the compound as an active ingredient to treat fibromyalgia and related chronic pain syndromes in the U.S. and Canada. Last summer, the parties revised the deal, providing Cypress rights for all indications in the U.S. and Canada. (See BioWorld Today, June 10, 2003.)
Per terms of the original license arrangement, Pierre Fabre stands to receive royalties on any sales as well. The French company remains the manufacturer of the compound's active pharmaceutical ingredient.
Under the agreement with Forest, the use of milnacipran also may be explored in other chronic pain syndromes such as irritable bowel syndrome, chronic tension headache, non-cardiac chest pain and certain types of lower back pain.
"Milnacipran is our only asset right now," Martucci Johnson said, "and therefore we were looking for a partner that would rank it just as high on its priority list as we would. And Forest is definitely that kind of an organization - it's a focus program for them."
Cypress's stock (NASDAQ:CYPB) dropped $1.21 Friday to close at $14.50.