By Randall Osborne
Three months after disclosing plans for a joint venture to advance an enzyme replacement therapy for a rare but potentially fatal childhood disease, BioMarin Pharmaceutical Inc. and Genzyme Corp. sealed the potential $30 million deal.
John Klock, president of Novato, Calif.-based BioMarin, said the company's "new paradigm" of drug development — using simple recombinant chemistry to develop treatments for small populations with genetic diseases — means the full value of the deal is almost certain to be realized.
"Downstream, the value is pretty significant, $300 million to $400 million," Klock said. "We get half the profits for the life of the drug, plus the $30 million. The cat's out of the bag, in terms of being able to address genetic diseases with a straightforward process."
Under the terms of the agreement, Genzyme, of Cambridge, Mass., has made an $8 million equity investment in BioMarin. Genzyme will pay another $12.1 million when the FDA approves the enzyme therapy for marketing, and will make a $10 million stock purchase when BioMarin completes an initial public offering.
At the center of the deal is (alpha)-L-iduronidase, an enzyme replacement treatment for mucopolysaccharidosis (MPS) I, a lysosomal storage disease that is one of seven similar genetic conditions. MPS I — of which the most serious form is Hurler's syndrome — afflicts 2,000 to 3,000 patients, mainly children, in the developed world.
The disease, characterized by a halt in physical development, causes carbohydrate materials to build up in all parts of the body, leading to enlargement of the liver and spleen, skeletal deformity, vision impairment, stunted growth, hearing loss and fluid on the brain.
MPS 1 Drug In 'Pivotal Phase I Trials'
By arrangement with the FDA, which assigned the enzyme treatment to the fast-track program, BioMarin is conducting "pivotal Phase I trials," data from which can be used for filing a biologics license application.
"This has never been done before," Klock said. "We provided very strong animal data, and we knew what the dose would be." With favorable results from the trials, approval could come quickly.
"Worst case scenario is that it's going to be mid-next year," Klock said.
Genzyme earns more than $300 million annually from sales of its enzyme treatments for Gaucher's disease: Cerezyme (recombinant glucocerebrosidase) and Ceredase, the natural version of the enzyme, derived from human placenta.
No pricing has been set for the MPS I therapy but, because demand is high, Genzyme (which will market the treatment) can demand premium prices. The expense of maintaining children with MPS I is astronomical, Klock said — $800,000 to $1.5 million per patient. And 80 percent of the patients die.
"These kids are perfectly normal," he added. "You're not taking a child who is mentally retarded and keeping that child alive. These kids are growing, running and keeping up with their peers. They're healthy."
After the MPS I treatment is approved, BioMarin has 26 more diseases in the same group. "A [full] pipeline is not our problem," Klock said.
"About 700 genetic diseases exist, each with fewer than, say, 10,000 patients," he added. "I don't think it's a small market. The reason [companies] haven't gone after it is they haven't had a way to develop drugs that's economical and fast. Can we build a billion dollar business with this? The answer is yes. Will it take five products, eight products? We don't know."
The two companies disclosed their plan for the joint venture in June. (See BioWorld Today, June 4, 1998, p. 1.)
BioMarin is an affiliate of Glyko Biomedical Ltd., also of Novato, which owns 36.2 percent. Glyko's stock (OTC BB:GLYK) closed Tuesday at $2.68, unchanged. Genzyme's shares (NASDAQ:GENZ) ended the day at $28.562, down $0.187. *