AstraZeneca has said it will license an anti-inflammatory cardiovascular drug from AtheroGenics in a deal that could be worth up to a massive $1 billion dollars to the US biotechnology firm.
The product, AGI-1067, is an investigational oral drug for the treatment of atherosclerosis currently in Phase III testing. It works by a novel mechanism, blocking signalling pathways within the endothelial cells that make up the inner lining of blood vessels, which in turn inhibit the production of VCAM-1 and other mediators that cause the chronic inflammatory reaction that ultimately results in atherosclerosis.
AstraZeneca said the size of the deal, which includes $50 million upfront, $300 million in milestone payments and up to $650 million based on sales targets, reflects the fact that AGI-1067 is already in late-stage testing. The drug is currently in a study known as Aggressive Reduction of Inflammation Stops Events (ARISE), which is due to report results in the first half of 2006.
AtheroGenics will be responsibility for the ongoing ARISE Phase III clinical trial and for regulatory filings in the US, while AstraZeneca will oversee the marketing, sales and distribution of AGI-1067 on a worldwide basis and be responsible for all non-US regulatory filings.
In a statement, AstraZeneca insisted that the price it was paying for the drug was ‘reasonable’. But the size of the deal reflects a trend towards higher-cost licensing deals for Big Pharma companies, which have been suffering from a downturn in R&D productivity and as a result are not negotiating from the position of strength they enjoyed in the 1990s. AstraZeneca itself has had some late-stage disappointments in its pipeline that have lent greater importance to its in-licensing strategy.
But the size of the deal is not without precedent. In December 2003, Pfizer paid a whopping $1.3 billion to acquire Esperion Therapeutics and secure access to ETC-216, another plaque-busting drug.
If AGI-1067 does fulfill its potential, it could easily turn into a big seller. The huge success enjoyed by the statin class of cholesterol-lowering drugs, which include the world’s biggest-selling medicine, Pfizer’s Lipitor (atorvastatin), with annual sales in excess of $11 billion, has come despite the fact they have only modest effects on the progression of atherosclerosis.
If AtheroGenics and AstraZeneca can show that AGI-1067 will be effective in regressing atherosclerotic plaques it could emulate the statins and have multibillion dollar sales potential.
But despite being in late-stage development, the project is not without risk. AtheroGenics’ Phase II studies of the drug showed that it could regress atherosclerotic plaques, it was not significantly better in this regard than placebo.
Meanwhile, the company was criticised in some quarters for its analysis of the Phase II data. Before publishing the results, the company sent the images of patient plaques for a second analysis which resulted in 30% of them being discarded because they did not meet stringent criteria for quality. AtheroGenics has always insisted this did not skew the results in favour of the drug.