NeoTherapeutics Inc. stands to gain upward of $22 million through a licensing deal with GPC Biotech AG surrounding development of satraplatin, an orally administered third-generation platinum analogue.
Under terms of the agreement, GPC, of Munich, Germany, will obtain worldwide rights to satraplatin, which is poised to enter Phase III trials in hormone-resistant prostate cancer sometime next year.
"GPC Biotech is in a strong financial position and the executives of both companies have known each other very well for years," Bernd Seizinger, GPC's president and CEO, told BioWorld Today. "We became aware of this opportunity and we are very excited about working with NeoTherapeutics in the oncology field."
Financially, NeoTherapeutics, of Irvine, Calif., will receive a $2 million up-front payment within 10 days of signing the deal, and a payment of $1 million plus a $1 million equity investment within 30 days after the first patient is dosed in the Phase III study. Other milestone payments are scheduled to total up to $18 million.
GPC has agreed to fully fund development and commercial expenses, and NeoTherapeutics would receive royalty payments once satraplatin enters the market. NeoTherapeutics may co-promote satraplatin in the U.S.
NeoTherapeutics' stock (NASDAQ:NEOTD) closed Tuesday at $1.69, up 82 cents, or 94.3 percent.
And for NeoTherapeutics, this deal is just what the doctor ordered. "It's easy to look back and say this is exactly what we had in mind," John McManus, vice president of finance and strategic planning for NeoTherapeutics, told BioWorld Today.
He's referencing NeoTherapeutics' decision in late August to implement a restructuring plan that would reduce the company's burn rate to less than $500,000 per month while placing more focus on the development of satraplatin and on out-licensing its anti-psychotic and attention-deficit drugs. Under the restructuring, NeoTherapeutics cut 23 of its 44 employees. (See BioWorld Today, Aug. 23, 2002.)
NeoTherapeutics' trouble started last spring when its lead drug, Neotrofin (leteprinim potassium) for Alzheimer's disease, failed to meet its primary endpoints in a 12-week pivotal Phase III trial. (See BioWorld Today, April 30, 2002.)
"We were successful in bringing the burn rate down in September, and then the next key thing was getting access to capital for the development of satraplatin," McManus said. "The cost of raising capital to the level that would be necessary to properly develop this drug was a pretty daunting task - I think I saw a figure of $30 million. So not only did we get the milestone and up-front payments, but we found a way to develop the drug without having to dilute the shareholders, and from a financial standpoint, we are really happy with the deal."
He said a number of GPC employees, including Marcel Rozencweig, senior vice president of drug development, possess strong oncology clinical development skills and are considered experts in the field. Many of the executives at both GPC and NeoTherapeutics are former employees of the oncology division of Bristol-Myers Squibb Co., of Princeton, N.J., according to representatives of both companies.
McManus explained that NeoTherapeutics acquired satraplatin in September 2001 from Johnson Matthey plc, of London, which developed the compound in conjunction with Bristol-Myers. Satraplatin is a platinum derivative, similar to cisplatin and carboplatin, two other anticancer drugs developed and manufactured by Johnson Matthey. (Neither drug is approved to treat prostate cancer.)
"I am intrigued by satraplatin for two reasons: No. 1, there are no orally bioavailable platinum compounds on the market and to the best of our knowledge, there are none in development, with the exception of satraplatin," Seizinger said. "Oral anticancer drugs are increasingly important for a number of reasons. Cancer is moving more and more from an acute deadly disease into a chronic disease similar to what happened to HIV a number of years ago. This will provide the possibility, eventually, of outpatient treatment, but only if you have orally available drugs, rather than injections, and almost all anticancer drugs are injections."
Seizinger also was intrigued by the clinical results of satraplatin in hormone-resistant prostate cancer patients. "Hormone-resistant prostate cancer is one of the most difficult types of tumors to treat. In fact, prostate cancers are resistant to the vast majority of anticancer drugs, so there is a great medical need in this very important market."
He added that satraplatin also showed activity in ovarian cancer and small-cell lung cancer, and that those indications may be pursued at a later date.
Seizinger said GPC and NeoTherapeutics will work with the FDA to design and develop Phase III trials expected to be conducted in the U.S. and Europe. He expects to begin Phase III sometime next year.