BioWorld International Correspondent

JERUSALEM, Israel - Peptor Ltd. said July 30 it signed a worldwide agreement with Aventis SA, granting it exclusive rights to develop and commercialize Peptor's DiaPep277 drug for the treatment of autoimmune diabetes.

Dana Elias, Peptor's vice president of research and development, estimated that sales of the drug could reach between $1 billion and $2 billion a year, making it a considerable deal at a time when Aventis is divesting some of its potential blockbuster drugs in the pipeline.

The total value of the deal was not disclosed, but Yoram Karmon, president and CEO of Rehovot- and Erkrath, Germany-based Peptor, said Peptor would receive a first milestone payment of $15 million with the signing of the deal. Also, Peptor, which Karmon co-founded in 1993, will be the sole manufacturer of the drug and will receive a significant share of revenue from the product.

DiaPep277 has been shown to arrest the progression of Type I diabetes, prevent destruction of insulin-producing pancreatic cells and reduce the need for injected insulin in newly diagnosed patients in Phase II trials, said Aventis Drug Innovation and Approval Head Frank Douglas.

Upon approval of DiaPep277 by the relevant registration authorities, Aventis would have worldwide exclusive rights to sell and distribute the product. Strasbourg, France-based Aventis will be responsible for clinical development and commercialization. The costs of the development of the manufacturing process and the capital expenditures for the required scaling-up of manufacturing plants will be Peptor's responsibility.

Douglas added: "The new drug represents an important development in the battle to help the millions of people suffering from diabetes. With Peptor, Aventis is able to offer diabetes patients the most innovative and comprehensive line of diabetes therapies worldwide."

DiaPep277 is being developed specifically for the prevention and treatment of latent autoimmune diabetes in adults (LADA) and for Type I diabetes. LADA is a slowly progressing form of Type I diabetes, characterized by the similar immune destruction of the insulin-producing cells in the pancreas, eventually leaving the patient insulin-dependent for life.

Most LADA patients more than 40 years of age initially are misdiagnosed as having Type II diabetes, the more common, progressive form of the disease in which the body produces insulin but is unable to use it. LADA is diagnosed by a blood test for antibodies to the protein GAD.

There are an estimated 10 million to 12 million people in the U.S., Europe and Japan with autoimmune diabetes, including Type I (or juvenile-onset) diabetes and LADA, with no way to treat the underlying cause of the autoimmune disease or to halt its progression. The incidence of diabetes is expected to double by 2025, largely due to an increasingly sedentary lifestyle and poor diet.

Peptor has raised a total of $65 million. Its last funding round ended in May 2000, when it secured $18 million.

"The Aventis agreement will provide Peptor with sufficient funds to advance our other research and development projects and to scale up our manufacturing capabilities," Karmon told BioWorld International. "However, we plan to monitor market conditions and might consider going to the market under the appropriate circumstances."

Shareholders include Teva Pharmaceuticals Ltd., Nomura International, Private Equity (Bank Vontobel), TVM Medical Ventures, Biotechnology Investment Group (Citibank), 3i Bioscience Trust, Clal Biotechnology Industries, Johnson & Johnson, Walden Israel and others.

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