Allergan Inc. struck a five-year deal potentially worth more than $40 million with EntreMed Inc. to develop and commercialize the latter’s angiogenic inhibitor, Panzem, for ophthalmolic uses.
In a conference call with investors Wednesday, Neil Campbell, vice president of corporate development for Rockville, Md.-based EntreMed, said the agreement is the world’s largest reported ophthalmology deal for a preclinical product.
Allergan, of Irvine, Calif., gains an exclusive worldwide license to commercialize Panzem (2-methoxyestradiol, 2ME2) for ophthalmolic uses while EntreMed retains all rights for other conditions.
Throughout the conference call, Campbell and John Holaday, chairman and CEO of EntreMed, stressed that the Allergan deal does not reduce EntreMed’s commitment to studying Panzem in oncology. Holaday said EntreMed is conducting Phase II trials of Panzem in prostate cancer and multiple myeloma, and Phase I trials in breast cancer.
The companies will co-develop Panzem to treat age-related macular degeneration (ARMD), a leading cause of blindness that is the result of bleeding from ruptured new blood vessels that form under the retina. Holaday said there are more than 60 million ARMD cases worldwide and there are no effective treatments on the market.
Allergan may use Sunnyvale, Calif.-based Oculex Pharmaceuticals’ drug delivery technology to deliver Panzem locally to the back of the eye.
“Our strategy at EntreMed has been to bring our product candidates into clinical trials to show their safety and early signs of effectiveness before we form strategic partnerships to accelerate their commercialization,” Holaday said. “This is an exciting development for the EntreMed team. It opens a whole new marketing area for this drug and demonstrates a potential breadth of applications and accompanying revenue opportunities for the company. We are also pleased to have a partner of the quality of Allergan, one of the largest specialty pharmaceutical companies with a worldwide reputation in the treatment of eye disease.”
Allergan will pay up to $41 million in up-front fees, equity investments and milestone payments, and EntreMed will be eligible for additional success payments if certain milestones are met early. EntreMed will receive development funding and royalties on worldwide sales of any resulting products.
The same financial terms will apply to any other small molecules owned by EntreMed that are developed by Allergan.
“There are over 20 diseases of the eye and over half have an angiogenesis role,” Campbell said. “If Allergan were to pick a second compound for commercialization, the terms of this agreement would restart, so it would be additional payments for EntreMed.”
Angiogenesis inhibitors are designed to block the formation of blood vessels, the formation of which can contribute to many diseases.
Allergan develops and commercializes products in eye care pharmaceuticals, ophthalmic surgical devices, over-the-counter contact lens care, movement disorders and dermatological markets.
The company has numerous agreements with other companies, including a deal with Inspire Pharmaceuticals Inc., of Durham, N.C., that recently had a setback when preliminary results of a Phase III trial of a product for dry eye showed the trial likely would not meet its endpoints. (See BioWorld Today, Jan. 17, 2002.)
Allergan also has its own dry eye product named Restasis in Phase III trials. (See BioWorld Today, June 28, 2001.)
Earlier this week, Allergan said it will separate its pharmaceutical and optical medical device businesses into two independent companies by spinning off the ophthalmic surgical and contact lens care businesses. The spin-off is expected to occur around mid-year.
Allergan’s stock (NYSE:AGN) closed Wednesday at $73.85, down 41 cents, while EntreMed’s (NASDAQ:ENMD) closed at $8, up 17 cents.