By Brady Huggett
Financially improved Alexion Pharmaceuticals Inc. revamped its collaboration agreement with Procter & Gamble Pharmaceuticals for Alexion¿s lead product, pexelizumab, in the hopes of seeing a bigger return.
The companies have agreed to share more equally in both the development of the product and its profits. Alexion now will share responsibility for future development and commercialization costs, including clinical, manufacturing and marketing efforts. Alexion, now with a stronger hand on the steering wheel, will have a greater decision-making role. It also will be entitled to conduct about half of sales efforts, and upon successful commercialization, Alexion will receive roughly half the profits.
In November, the FDA approved the initiation of pexelizumab Phase III trials involving 3,000 patients undergoing coronary artery bypass graft surgery with cardiopulmonary bypass. The trial is expected to begin shortly, said Leonard Bell, Alexion¿s CEO and president, who said it¿s natural for his company to want more involvement.
¿It¿s not surprising to Procter & Gamble that we have a desire to play an active role in the drug,¿ he told BioWorld Today. ¿What¿s changed is that we have, in our view, evolved as a company, our financial wherewithal has remarkably improved, and [Procter & Gamble] has been gracious enough to let us participate more.¿
The original agreement, signed in January 1999, had a value of up to $95 million. Alexion, of Cheshire, Conn., received $10 million up front in the deal and P&G, of Cincinnati, was responsible for all clinical development costs, estimated at the time to be between $70 million and $90 million. (See BioWorld Today, Jan. 27, 1999.)
The new arrangement, however, applies only to the United States. Procter & Gamble Pharmaceuticals, a division of Procter & Gamble Health Care, is responsible for development and commercialization for the rest of the world, where Alexion will receive a royalty on sales.
Pexelizumab, formerly known as 5G1.1-SC, is a humanized single-chain antibody fragment. It is a short-acting C5 complement inhibitor designed to have the advantage of enhanced tissue penetration desirable for effective treatment of acute cardiovascular diseases associated with complement activation.
The companies are conducting two Phase II trials with pexelizumab in acute myocardial infarction patients, and Alexion¿s other lead product, 5G1.1, has completed a Phase II study in rheumatoid arthritis. 5G1.1 also is in Phase II trials for membranous nephritis and lupus nephritis, as well as earlier-stage studies for dermatomyositis and pemphigoid.
Bell said once the Phase III trial has started, it should take about 12 to 18 months to complete enrollment. The companies are still pounding out the wrinkles in the new agreement, such as constructing the steering committees, and will provide more details in the future. But a large part of the restructuring comes from Alexion¿s current healthier cash position. On Oct. 31, 1998 ¿ about three months before the deal was announced ¿ Alexion had about $33.7 million in cash, cash equivalents and marketable securities. Bell said the company now has a cash position of about $350 million.
Bell said about 500,000 coronary bypass graft surgeries are performed in the United States per year, allowing him to say he expects pexelizumab, if approved, ¿to have a very valuable commercial opportunity.¿
He added, ¿It¿s very important to us, for Alexion, to participate in a substantial way in the commercial upside of its lead product.¿
Alexion¿s stock (NASDAQ:ALXN) fell 18 cents Wednesday to close at $21.76.