BioWorld International Correspondent
IsoTis SA took another step toward fulfilling its goal of becoming an orthobiologics firm focused on bone substitution by outlicensing its chronic wound-care product Allox to Healthpoint Ltd., in a worldwide exclusive deal.
Healthpoint, a subsidiary of DFB Pharmaceuticals Inc., of Fort Worth, Texas, also acquired options on two other IsoTis wound-care products, AcuDress and EpiDex.
Since unveiling a merger with Toronto-based GenSci Regeneration Sciences Inc. in June, IsoTis, of Lausanne, Switzerland, has mapped out a strategy based primarily on combining the two companies' bone substitution product families.
Terms of the Healthpoint deal were not disclosed, but IsoTis, which had €75 million in cash on March 31, opted to forego any significant up-front payment in return for a long-term share in the anticipated profits Allox could generate. The deal comprises a modest signing fee, milestone payments that would be triggered by U.S. investigational new drug application and biologics license application filings, and a percentage of the product income that would range between 20 percent and 10 percent over time and in accordance with sales performance.
"We think this is a potential US$100 million product at least," company spokesman Hans Herklots told BioWorld International.
Allox is an off-the-shelf spray containing growth-arrested allogeneic skin cells, derived from immunologically inactive neonatal foreskins, that secrete endogenous growth factors. It currently is undergoing a Phase II trial in Europe and the Netherlands Antilles involving 98 patients with chronic, hard-to-heal leg ulcers. Under the terms of the deal with Healthpoint, it will complete the trial, which is expected to finish later this year, and will file a U.S. IND. Healthpoint would then assume responsibility for clinical validation, market approval and commercialization.
IsoTis and Healthpoint did not disclose the terms of the options on AcuDress and EpiDex, but the latter company, which is focused on wound care and dermatology, would represent a likely fit for them as well. "They need some time to review those programs," Herklots said.
AcuDress is a fibrin-based autologous epidermal sheet in development for treatment of burn wounds. EpiDex, an autologous human skin equivalent derived from adult stem and precursor cells found in patients' hair, has been the subject of a standoff between IsoTis and Swiss regulatory authorities, which refused reimbursement for the product late last year. That decision is undergoing review.
"If it gets on the market in Switzerland and gets reimbursed, it will make a much better target for outlicensing or a deal like Allox," Herklots said.
News of the deal pushed up the company's share price by more than 11.2 percent to close Monday at CHF2.86, making it the day's fifth biggest gainer on the Swiss Stock Exchange. London-based analyst Adrian Howd, of ABN Amro, said his firm is now reviewing its price performance target for IsoTis shares, which had stood at CHF3 when they were changing hands at CHF0.90.
"All credit to them; they've executed very well," he told BioWorld International. "Anything that provides more visibility strengthens the underlying investment case," he said. "I think they are becoming more attractive all the time."
The company's own visibility is rising all the time, Howd said, as is that of the sector. "There is a lot more interest in orthobiologics now."