By Mary Welch
Vertex Pharmaceuticals Inc. entered a five-year, $88 million deal with Schering AG to develop and market orally active neurophilin compounds that would encourage nerve regeneration in several neurological diseases.
The collaboration, which includes $28 million in up-front and research support payments, provides for an additional $60 million in milestone payments to Vertex.
Richard Aldrich, senior vice president and chief business officer of Cambridge, Mass.-based Vertex, said the collaboration is "not set up like the usual biotech-big pharma deals. We are playing a large role in the development of the compounds and we kept a big piece of the downstream economics associated with the commercialization of the compounds. We are participating in all phases."
Under the terms of the agreement, Vertex and Schering, of Berlin, will have equal roles in the management of neurophilin research and product development. Vertex retains manufacturing rights in North America, and the two companies will share marketing expenses and profits from commercialized compounds. Schering has the rights to manufacture any commercialized compounds in Europe, the Middle East and Africa, and will pay royalties to Vertex, which has the option to manufacture bulk drug substance for sale and marketing elsewhere.
A large number of Schering researchers will be working closely with Vertex scientists, Aldrich said. "Their researchers and our researchers will be communicating on a daily basis."
Neurophilin compounds have shown promise in nerve regeneration and may have a role in the treatment of a number of diseases, including peripheral neuropathies, Parkinson's disease and spinal cord injury. Peripheral neuropathies result from the degeneration of sensory and motor nerves.
Vertex for several years has been designing an orally administered compound that enhances the functional recovery of injured neurons. In 1996, company researchers reported a neurophilin compound, VA-10,367, administered intravenously, accelerated the onset of foot movement in paralyzed rats. The next year, the company said that an orally administered VA-10,367 stimulated functional recovery and nerve regeneration in rodent models of spinal cord and peripheral nerve injury.
The drug is "one of a family of compounds being studied," said Aldrich. "But it certainly shows encouraging results in the area of nerve regeneration. What we will be seeking is good clinical improvement of function. How that relates to full regrowth of nerves remains to be seen."
Aldrich believes the market for any oral nerve regeneration compounds commercialized by the partners would be in the "multi-billion dollar" range.
Diabetic neuropathy, a potential indication in the program, affects some 1.5 million patients in the United States, and Parkinson's disease affects as many as 1 million. "Those are just two possible indications," Aldrich said. "We see the market as the peripheral neuropathies as well as the chronic neurological degenerative diseases."
Vertex's stock (NASDAQ:VRTX) closed Monday at $16.375, down $0.812. *