By Debbie Strickland
In a deal reportedly worth up to $60 million, ALZA Corp. has acquired an option to commercialize Alkermes Inc.'s receptor-mediate permeabilizer 7 (RMP-7), an agent that ferries therapeutic compounds through the hard-to-cross blood-brain barrier.
Shares in Alkermes (NASDAQ:ALKS), based in Cambridge, Mass., closed Monday at $23.625, up $1.625. Palo Alto, Calif.-based ALZA's shares (NYSE:AZA) ended the day at $27.625, down $0.625.
"This news is very positive," said analyst Ian Sanderson, of Cowen & Co., in Boston. Sanderson upgraded Alkermes' shares from "buy" to "strong buy" Monday.
"This validates the promise of the product," he said. "There had been some doubts."
RMP-7 earlier this year failed to meet the primary endpoint — time to tumor progression — in a Phase II recurrent brain tumor trial, but is now headed for three new trials, with more concentrated dosing planned in at least one. (See BioWorld Today, April 1, 1997, p. 1.)
The compound is an analogue of a natural molecule called bradykinin, which mediates vascular permeability. RMP-7 makes the blood-brain barrier transiently permeable and has been paired with the chemotherapeutic agent carboplatin in an effort to fight brain cancer.
ALZA, which has a 9.7 percent stake in Alkermes, is paying $10 million up front to fund two new Phase I/II clinical trials, one in metastatic brain tumors and one in primary brain tumors. In exchange, ALZA receives an option on worldwide commercialization rights to RMP-7 in all indications.
Whether ALZA exercises its option will depend on the outcome of these trials, expected to last 12 to 18 months, said Michael Landine, Alkermes' chief financial officer.
According to analysts' reports, if ALZA exercises the option, the company will make additional payments of $30 million to cover costs associated with advanced clinical development. Post-launch milestones of between $10 million and $20 million are also covered in the agreement.
Alkermes will manufacture RMP-7 and, upon regulatory approval, the two companies will both market the product, sharing profits on a 50-50 basis.
With the profit-sharing component, said Landine, this collaboration could prove more lucrative than the company's existing agreement with Johnson & Johnson, of New Brunswick, N.J., covering the use of Alkermes' drug delivery mechanisms with undisclosed compounds.
"And ALZA certainly brings a lot more than money," stressed Landine. "They have an expertise in oncology; they bring trial design experience also, as well as marketing ability."
The new indications under development, particularly metastatic brain cancer, represent a much broader market than Alkermes has heretofore pursued, said Sanderson. In the U.S. and Europe, some 40,000 people have primary brain tumors, but 300,000 have the metastatic disease. RMP-7's estimated annual sales potential is $150 million to $250 million, according to Sanderson.
Phase III Trial To Begin This Year
In addition to the new Phase I/II studies, Alkermes will fund a Phase III trial in recurrent brain tumors. Expected to begin by the end of the year, the trial will use a more concentrated chemotherapy dose, in a departure from the dose strategy of an earlier Phase II trial in this indication that failed to meet its primary endpoint.
"We're taking the results from the three Phase II trials and using them to help us design the Phase III," said Landine.
The most significant change in the Phase III trial is the dosing. In the more successful Phase II European trials, carboplatin was administered over 15 minutes vs. a 45 minute infusion in the placebo-controlled U.S. trial. Doctors in the U.S. had been concerned about increased carboplatin toxicities in the higher concentration dosing, but safety data from the European trials have allayed this worry.
The company has two other drug-delivery platforms — ProLease and Medisorb — in trials.
"Really, the lead technology is ProLease," Sanderson said.
A Phase I/II Genentech Inc.-sponsored trial of a ProLease formulation of human growth hormone will be completed this fall. Schering-Plough's ProLease formulation of Intron A could enter trials in 1998, and a Johnson & Johnson protein is being tested as well. Johnson & Johnson also has moved a Medisorb-delivered drug into a Phase II trial.
Genentech is based in South San Francisco, and Schering-Plough Corp. is in Madison, N.J.
Additional ProLease deals are expected in the near term, said Sanderson, who noted the technique "could be the first commercially available, broadly applicable alternative delivery system for proteins and peptides." *