In-licensing companies do not develop sales and marketing skills, and will seek partners to commercialise their products. Under the terms of the agreement, Dr Reddy’s will receive exclusive US rights to develop and commercialise XP23829. In return, XenoPort will receive $47.5 million upfront payment and an additional $2.5 million for transfer of certain clinical trial materials to the Indian pharmaceutical major. This is possibly the biggest in-licensing deal by an Indian pharmaceutical company with a combined commitment of $490 million (Rs 3,266 crore) for a single market.
XenoPort will also be eligible to receive up to $190 million upon Dr Reddy’s achieving certain regulatory milestones.
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In addition, XenoPort could receive up to $250 million with the Indian drug maker achieving certain commercial milestones, Dr Reddy’s stated.
“XP23829 complements our internal development efforts, which have primarily focused on the mild-to-moderate psoriasis segment to date. In other markets, fumarates have been used as first-line choices of treatment prior to the initiation of biologic therapies in patients with moderate-to-severe psoriasis. We intend to initiate the registration programme for XP23829 as soon as possible so that we can accelerate the availability of this important treatment choice for psoriasis patients in the US,” said Raghav Chari, executive vice-president (proprietary products group) at Dr Reddy’s.
According to Mark Jackson, clinical professor of medicine (dermatology) at the University of Louisville, physicians need additional oral medications that are both safe and effective for patients with psoriasis. “Fumaric acid esters possess a unique anti-inflammatory mechanism of action and have been used to treat psoriasis in Germany for over 20 years. XP23829, a novel fumaric acid ester, has the potential to be a meaningful treatment option for patients with moderate-to-severe psoriasis.”
“As one of our key objectives for 2016, we were interested in finding a strong partner that would recognise the opportunity of this innovative therapy that we believe will make a significant difference in the lives of psoriasis and MS patients,” said Vincent J Angotti, chief executive officer, XenoPort, Inc.
Psoriasis is the most prevalent autoimmune disease in the US with as many as 7.5 million Americans suffering from the condition. It is estimated that approximately 1.5 million adults in the US are considered to have moderate-to-severe psoriasis and between 150,000 to 260,000 new cases of psoriasis are diagnosed each year.
MS, a chronic and progressive neuro-degenerative disease in which the body’s immune system attacks the myelin protein that wraps around nerve fibres, is estimated to have affected 250,000-350,000 people in the US, according to Dr Reddy’s.
Last year, the company had signed a similar but relatively lower-size deal with an Australian company.
In September 2015, Dr Reddy’s signed a commercialisation deal with Hatchtech for the exclusive rights for its head lice product Xeglyze Lotion. The rights are for the US, Canada, India, Russia and Australia markets. The deal entails an upfront payment of $10 million, up to $50 million based on pre-commercialisation milestones, and an undisclosed amount based on post-commercialisation milestones, linked to the achievement of annual net sales targets.
The company’s share ended marginally down Rs 11.70 apiece at Rs 3,035.55 on the BSE on Monday.