BioWorld International Correspondent

PARIS - Flamel Technologies SA and Bristol-Myers Squibb Co. signed a licensing and commercialization agreement covering Flamel's human insulin product, Basulin.

The agreement gives New York-based BMS exclusive worldwide rights to Basulin, and provides for it to lead and finance further development of the product, including its manufacture.

The deal could be worth at least $165 million to Flamel, of Lyon, which is to receive an up-front payment of $20 million plus a potential $145 million in milestone payments, not counting the double-digit royalties BMS would pay on future sales.

Basulin is the first controlled-release insulin formulation that uses recombinant human insulin rather than an insulin analogue. Moreover, Flamel has developed it as a once-daily injection for the treatment of both Type I and Type II diabetes. The product, which is administered using Flamel's proprietary, polymer-based delivery system Medusa, completed a Phase I trial in March, and a Phase II clinical trial is due to begin in Europe this month.

According to Flamel's CEO, Gérard Soula, the company chose BMS as a partner because of its "leadership in diabetes disease treatment." Yet Flamel originally planned to co-develop Basulin with the Danish company Novo Nordisk A/S, of Bagsvaerd, with which it signed a $42 million collaboration agreement in late 1999. But it terminated that partnership in January 2002 because it thought Novo was not moving the development of the product ahead quickly enough.

When the agreement with Novo Nordisk was signed, Soula told BioWorld International that the aim was to have Basulin on the market by 2004. But with Phase II trials starting only this month, Soula now acknowledges that a more "reasonable" objective is 2006.

The significantly improved financial terms Flamel has obtained in the deal with BMS reflect the improvements made to the product over the past four years and the positive results of the Phase I trial, which compared Basulin with Lantus, the long-acting insulin product of Strasbourg-based Aventis SA.

Medusa is one of two polymer-based drug delivery systems developed by Flamel, the other being Micropump. While Medusa is designed to deliver therapeutic proteins, Micropump is a controlled-release, taste-masking system for the oral administration of small-molecule drugs.