By Mary Welch
The Federal Trade Commission granted an early termination of the required waiting period, allowing the deal worth a potential $400 million to close between Aviron and Wyeth-Ayerst Laboratories for the marketing of Aviron¿s FluMist.
¿It¿s now effective,¿ said Leighton Read, president and CEO of the Mountain View, Calif., company. ¿It¿s probably the biggest deal for a single biotech product. We should be getting our $15 million up-front licensing fee this week.¿
Originally signed in January, the deal was pending while the companies sat out the waiting period mandated by the Hart-Scott-Rodino Antitrust Improvement Act of 1996.
¿I¿m not sure exactly why we fell under this act,¿ Read said. ¿It may be because of the size of the deal, financially, and it may be that American Home Products [AHP] is also in the vaccine and flu business.¿
King of Prussia, Pa.-based Wyeth-Ayerst, the pharmaceutical division of AHP, studied the vaccine from 1989 to 1993 before dropping development. In 1995, Aviron licensed the vaccine from the University of Michigan in Ann Arbor.
Under the terms of the agreement, Wyeth-Ayerst will pay Aviron $15 million for the initial license, $15 million upon the FDA¿s acceptance of the regulatory filing for FluMist, and $20 million upon marketing approval.
Also committed by Wyeth-Ayerst is up to $40 million in future financing, some of which is contingent on regulatory approval and some of which will come from future securities offerings by Aviron.
The rest of the potential $400 million or more would come if various other milestones are met. (See BioWorld Today, Jan. 13, 1999, p. 1.)
Wyeth-Ayerst will distribute FluMist exclusively worldwide for up to 11 years and co-promote FluMist with Aviron in the U.S. Excluded from the deal are Korea, Australia, New Zealand and certain Pacific countries.
Aviron expects to receive about 40 percent of the product revenues from Wyeth-Ayerst, in the form of product transfer payments and royalties, which increase at higher sales levels.
FDA Approval Remains A Big Hurdle
With the Hart-Scott-Rodino review complete, the pivotal step ¿ FDA approval of FluMist ¿ remains.
FluMist is a cold-adapted trivalent vaccine containing two different influenza A strains and one influenza B strain selected each year based on worldwide surveillance. The internal flu proteins from these master strains of influenza A and B virus grow at cooler temperatures and combine with hemaglutinin and neuraminidase, the surface proteins found on contemporary circulatory viruses. FluMist stimulates the mucosal immune system as well as the systemic immune system, resulting in a strong cytotoxic T-cell response.
Aviron submitted its FDA filing in July and was surprised by the FDA¿s ¿not-acceptable¿ response in September. The FDA flunked FluMist due to Aviron¿s lack of data on manufacturing, validation and stability. Aviron initiated a bridging study designed to evaluate the clinical equivalence of the vaccine blended and filled at Aviron¿s new Pennsylvania facility compared to the vaccine used in earlier clinical trials. (See BioWorld Today, July 2, 1998, p. 1; and BioWorld Today, Sept. 2, 1998, p. 1.)
¿We have to show clinical comparability between where FluMist was manufactured for clinical trials, by Medeva Pharma Ltd. [of Liverpool, U.K.], and where it was manufactured for commercial launch [by Packaging Coordinators Inc., of Philadelphia],¿ Read said.
Refiling Expected By Late Fall; 2000 Launch Possible
A 225-person trial in Australia to achieve that proof is now fully enrolled. The trial is being conducted by CSL Limited, of Victoria, Australia, Aviron¿s Australian marketing partner for FluMist and a leading supplier of vaccines in the Southern Hemisphere. ¿All the children have been vaccinated and we expect to collect the data by early summer,¿ Read said.
The company expects to refile by late fall, he added.
¿Of course we want to do it as soon as possible, but we also want to make sure the application is complete,¿ Read said. ¿We are pleased to be able to rely on the expertise of Wyeth-Ayerst in terms of regulatory, manufacturing and quality issues in terms of the filing. We¿re still hoping for a 2000 launch, but it¿s a complex product.¿
The company, with the Department of Veterans Affairs, is conducting a study in veterans over 50 with chronic lung diseases, to determine if giving FluMist in addition to a flu shot provides extra protection. ¿That age group has the highest death rate and hospitalization from the flu, and the flu shots work the least in that group ¿ about 50 [percent] to 70 percent,¿ said Read. ¿There¿s lots of room for improvement.¿
In addition, the company will do a year-long study on the effects of FluMist on a community in Temple, Texas. In August, Aviron began a three-year trial to assess the impact of community-wide pediatric influenza immunizations, planning to vaccinate 15,000 children.
¿There¿s a lot going on,¿ said Read.
Aviron¿s stock (NASDAQ:AVIR) closed Thursday at $20.250, down $0.187.