By Randall Osborne
SAN FRANCISCO - "This is the biggest deal of the year, isn't it?" smiled Leighton Read, president and CEO of Aviron.
Only two weeks into January - and four months after the FDA rejected Aviron's regulatory filing for the intranasal flu vaccine known as FluMist - Aviron signed a potential $400 million deal with Wyeth-Ayerst Laboratories' vaccines unit to market the product.
"The dollars reflect genuine, achievable milestones that are realistic over the life of this deal," said Read, who disclosed the deal while attending the 17th annual Hambrecht & Quist (H&Q) Healthcare Conference here.
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.
Wyeth-Ayerst, a division of Madison, N.J.-based American Home Products, gets exclusive worldwide marketing rights for up to 11 years, co-promoting FluMist with Aviron in the U.S. and collaborating on regulatory, clinical and marketing programs. Excluded from the deal are Korea, Australia, New Zealand and certain South Pacific countries.
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, Read said.
"Most of it involves [FDA approval of] indications or label claims that involve different target populations, or recommendations by advisory groups, or keeping the supply up with the market," Read told BioWorld Today.
Important advisory groups include those counseling the American Academy of Pediatrics and the Centers for Disease Control, Read said.
Mountain View, Calif.-based Aviron also expects to receive about 40 percent of product revenues from Wyeth-Ayerst, in the form of product transfer payments and royalties.
Last September, the FDA told Aviron its submission for FluMist was not acceptable because it lacked important manufacturing data. (See BioWorld Today, Sept. 2, 1998, p. 1.)
"We had changed the place where we blended and filled sprayers with the vaccine," Read said. The FDA wanted proof that the vaccine from the new location was clinically equivalent to the vaccine used in trials.
A bridging study under way in Australia is "nearly fully enrolled," Read said. "We're ahead of schedule."
Aviron plans to resubmit its application to the FDA in the summer or fall of this year.
"We're giving ourselves a broad window," Read said, so the application this time can be completed precisely to the agency's specifications.
"The issues with the FDA never dealt with the fundamentals of this product, but dealt with the importance of great execution in very complicated biological products," Read said. "We take the lessons we've learned in that experience very seriously."
"We're aiming for 2000," Read said. "But the time you'd use the vaccine, in relation to the flu season, would be August, September, October, so the fall of the year 2000 is the earliest we could imagine, and there are numerous things that could cause us to slip a year."
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. By stimulating the mucosal immune system as well as the systemic immune system, FluMist provides a strong cytotoxic T-cell response.
The 11-year term of the deal was settled upon to "create a win-win balance, [satisfying] our partner's need to have a substantial time period to sell, in order to justify the very large investment they're making in this product," said Read, who fielded phone calls and met visitors at his hotel room. Aviron will make a presentation at the H&Q conference Thursday.
"On the other side, it was very important for us to retain the right to co-promote the product and have a time-limited deal," he said.
"It's wonderful to talk about prevention, which is an elegant and important concept, but there aren't enough good examples of how [a company] can make an investment and produce a change in the state of human beings, that then predictably lowers morbidity, mortality and health-care costs," he added.
"I think it will be great, right away," Read said. "The launch of FluMist is going to be fun." n