GlaxoSmithKline is delving back into diabetes and has signed a deal worth $760 million with the USA’s Tolerx to develop the latter’s otelixizumab.

The firms will develop and commercialise otelixizumab, also known as TRX4, a novel humanised anti-CD3 monoclonal antibody that has “potential across a broad range of autoimmune and immune-mediated inflammatory diseases”, most notably type 1 diabetes. The compound has been evaluated as a treatment for the latter in two Phase II studies and in psoriasis in two Phase I trials.

Under the terms of the agreement, Tolerx will have responsibility for the Phase III clinical programme for type 1 diabetes in the USA up to and including regulatory submission of the biologics license application. It will then have the option to co-promote otelixizumab in the USA, while GSK will have exclusive rights in all other indications in the rest of the world. The latter also has the exclusive right to develop the paediatric indication for type 1 diabetes in the USA.

Cashwise, Tolerx will receive an upfront payment, equity and advance R&D funding sum of $70 million and up to $155 million in future development costs of otelixizumab in type 1 diabetes. If all goes well, the Cambridge, Massachusetts-based firm may earn up to $350 million for approvals of otelixizumab and $175 million in sales milestones, plus tiered, double-digit royalty payments. It was also noted that if Tolerx plumps for an initial public offering, GSK will invest up to an additional $10 million.

Explaining the rationale behind the deal, Moncef Slaoui, chairman of R&D at the UK-based drugs major, said otelixizumab “is another welcome addition to GSK’s rapidly expanding biopharmaceuticals pipeline”. He added that this is “a key area of future growth and investment for GSK and, as a novel treatment for many T cell-mediated diseases, the potential of otelixizumab is significant”.

Lawsuit over Paxil CR settled with Mylan

Meantime, GSK and Mylan have settled a US patent infringement lawsuit over the extended-release version of the UK-based drugmaker's antidepressant Paxil (paroxetine).

Under the terms of the agreement, Mylan can launch generic versions of the compound in three dosages (12.5mg, 25mg and 37.5mg) beginning no later than October 1 next year and it was noted that GSK’s Paxil CR had US sales of around $342 million for the year ended June 30.

Mylan received final approval from the FDA in June to sell its version of Paxil CR and it will have 180 days of exclusivity on the 12.5mg and 25mg dosages. Chief executive Robert Coury said that reaching the settlement, for which no other details were disclosed, "is consistent with our commitment to monetise on our first-to-file opportunities", adding that it is “especially gratifying as we continue to add another very difficult to develop and/or manufacture product to our portfolio."