By Lisa Seachrist
Progenitor Inc. has licensed its leptin receptor technology to Amgen Inc. in a deal that could ultimately net the company $42 million in licensing fees, stock purchases and milestone payments should products result.
Amgen, of Thousand Oaks, Calif., will hold the rights to both the fat hormone leptin and its receptor. Progenitor, of Columbus, Ohio (a majority-owned subsidiary of Interneuron Pharmaceuticals Inc., of Lexington, Mass.) will retain exclusive rights to the receptor technology for small molecule screening, cell sorting and human uses of leptin receptor DNA antisense molecules.
“Amgen has a tremendous commitment to the development of leptin,“ said Douglass Given, president and CEO of Progenitor. “That interest in leptin combined with their experience with recombinant proteins made them the ideal company for [Progenitor] to ally with.“
“This agreement gives Amgen an additional tool in our efforts to understand leptin biology,“ said David Kaye, associate director of corporate communications for Amgen. “We just started our clinical program and expect it to be a fairly lengthy development. The leptin receptor will only aid in that development.“
Details of the agreement call for Amgen to pay a $500,000 licensing fee to Progenitor. Amgen will also purchase $5.5 million of Progenitor common stock should the company go public. In September, Progenitor scuttled plans for an initial public offering because the market was weak. Instead, the company continued to receive support from Interneuron.
The bulk of the earning potential, however, comes in the form of milestone payments should successful therapeutic, diagnostic or prophylactic products result. Those payments would total $22 million upon development of the first product. A second product would net $14 million in milestones. In addition, the company will receive royalty payments on product sales.
The focus of this potentially lucrative agreement is leptin, a natural hormone produced by fat cells. It circulates throughout the body and serves to help the body regulate its fat content. Mice studies have shown that the hormone not only regulates body fat, but can control blood lipids and type II diabetes.
Progenitor, a gene therapy and functional genomics company focused on developmental biology, discovered the leptin receptor while searching for genes that influence the development of hematopoietic cells such as stem cells. Leptin, as it turns out, is also a potent stimulator of hematopoietic cell differentiation and, therefore, plays a role in the formation of blood and immune cells. The company plans to develop the leptin receptor as a potential way to isolate stem cells from blood.
Amgen intends to pursue the leptin receptor’s potential as a therapy to treat obesity and diabetes, as well as using it to develop potential therapies, prophylactics and diagnostics.
“This represents the first validation of a project coming out of our functional genomics efforts,“ Given said.
The Amgen agreement is the third such agreement for Progenitor. In 1995, the company entered into agreements with Chiron Corp., of Emeryville, Calif., for gene transfer technology and Novo Nordisk A/S, of Bagsvaerd, Denmark, for the development of a growth factor to treat blood disorders.
“We have been really focusing on corporate added value and this agreement is a demonstration of our corporate development process,“ Given said. “We are prepared to go back to the public markets in the very near future.“
William Boni, vice president of corporate communications for Interneuron, told BioWorld Today that this agreement as well as the 1995 deals fit in with Interneuron’s strategy for its subsidiaries. “We want these companies to complete deals with major corporate partners and eventually go public so that they gain financial independence, but we still maintain an interest in the public entity,“ he said.
This new deal may “give Progenitor a leg up on the capital markets should they decide to go public,“ said C. Anthony Butler, an analyst with Lehman Brothers in New York. “The deal also allows them to keep the rights to the receptor for other things that bind to the receptor.“
Butler noted that some analysts may think this move belies weakness on Amgen’s part. “Amgen knows more about leptin than anybody, so the fact that they entered into this deal may indicate that the leptin isn’t the whole story,“ he said. “But, we don’t know leptin’s role in humans, and I don’t believe it bodes negatively for leptin and obesity.“
Amgen’s stock (NASDAQ:AMGN) lost $0.375 to close at $56.75 on the news while Interneuron’s (NASDAQ:IPIC) stock lost $2.125 to close at $25.875 on Monday.