By Mary Welch
In what could be at least a $60 million deal for Scios Inc., the Mountain View, Calif., company entered a collaborative agreement with Bayer AG to market Natrecor, a drug for short-term treatment of congestive heart failure (CHF).
Scios, which received an up-front cash signing bonus of $20 million, agreed to manage the production of Natrecor and Phase IIIb trials as well as further worldwide development and commercialization with Bayer, of Leverkusen, Germany.
A new drug application for Natrecor was filed with the FDA in April, and the drug is expected to be on the market by mid-1999.
Scios will receive cash milestone payments of up to $40 million upon regulatory approvals in the U.S., Europe and Japan. Additional payments will be based on annual sales.
The agreement also gives Scios the option to copromote Natrecor in the U.S. after three years and upon achievement of specified sales levels, and to participate in further development of the drug.
Perhaps as significant to Scios is the fact that this lucrative collaboration may help the company achieve sustainable profitability within the next two years.
"This is a major event in the history of Scios," said Mary Allencourt, manager of investor relations. "There are substantial payments involved, both up front and in milestones. Our company was started in 1982-'83 and this alliance will certainly increase our cash position and keep us afloat. We were profitable last quarter and, when the up-front payment comes in, we should be profitable this quarter. But the key is sustained profitability, which we should achieve."
Scios Cash Level Nearly $100M
With the $20 million payment, Scios' cash balance will be close to $100 million, Allencourt said.
The news did not boost the stock price. In fact, Scios' shares (NASDAQ:SCIO) were at $10.125, down $1.562, a 13.3 percent decrease.
The company's Bayer deal comes just over a year after an April 1997 setback with Auriculin, which stumbled in Phase III as a treatment for oliguric acute renal failure (ARF). The company discontinued Auriculin, which had been in research and development for 14 years. (See BioWorld Today, April 4, 1997, p. 1.)
Last week Scios learned its Phase II/III trial for Fiblast (Trafermin) in acute stroke was temporarily suspended by an independent Data and Safety Monitoring Committee after examining available findings from about half of the 900 patients enrolled. The trial suspension allows the committee to review data from all patients enrolled in sites throughout the country. Scios was given no reason for the suspension. (See BioWorld Today, May 20, 1998, p. 1.)
Natrecor is a genetically engineered form of the naturally occurring cardiac hormone human b-type natriuretic peptide (BNP), which is produced primarily in the heart. BNP is believed to revive a faltering heart by dilating blood vessels leading into and out of the heart thereby improving its pumping action. The hormone also seems to boost elimination of salt and fluids and decrease vessel constriction. (See BioWorld Today, Nov. 8, 1996, p. 1.)
Acute CHF accounts for almost $20 billion in annual healthcare costs and 1 million hospital admissions in the U.S. alone. Almost 5 million Americans have CHF and 400,000 new cases are diagnosed yearly. About 600,000 Americans a year die from CHF.
Current treatment usually involves a multi-drug approach to reduce the heart's workload. Generally, drugs such as diuretics, vasodilators and inotropes are prescribed for the symptoms.
In Phase III trials, Natrecor improved patients' symptoms and two measures of heart function — pulmonary capillary wedge pressure and cardiac index.
Neither company would release estimated sales figures or projected market share once the drug is approved. Bayer Pharmaceuticals Inc., of West Haven, Conn., a division of Bayer AG, calculates the potential CHF worldwide market is $1 billion.
"It is a huge market and we believe we will get a significant portion of it," said Allencourt. Both companies declined to say what Natrecor would sell for, but Allencourt said it would be compatible with current therapies, which are between $600 to $1,200 per course of therapy. "It certainly will not be priced out of the range acceptable to doctors," she said.
"This is the first new drug for acute CHF in 10 years," said Laura Malis, spokeswoman for Bayer Pharmaceuticals. "It certainly expands our existing presence in the cardiovascular arena. It has nice synergy with our existing products. It also gives us more leverage in the hospital arena."
Bayer's portfolio includes the recently launched Lipobay/Baycol, a cholesterol-lowering drug, and Adalat CC (nifedipine), a drug for hypertension. *