Pact includes equity investment by ChugaiMolecular Biosystems has cinched a deal that promises not only to open the Far East to the sale of its contrast agents, but also to bring more than $22 million into the company over the next six months. The
Pact includes equity investment by Chugai
Molecular Biosystems has cinched a deal that promises not only to open the Far East to the sale of its contrast agents, but also to bring more than $22 million into the company over the next six months. The San Diego company announced in April a deal with Chugai Pharmaceuticals that grants the Tokyo-based company an exclusive license for the development and sale of ultrasound contrast agent FS069 (known in the U.S. as Optison) and gastrointestinal agent Oralex in Japan, Taiwan, and South Korea.
In return for this license, Chugai-one of the largest pharmaceutical companies in Japan-has purchased an $8.3 million equity stake in MBI at $12 per share, and will pay $14 million in up-front license fees. The deal, which will include royalties from Chugai on the sale of these agents in its territories, covers another $20 million upon reaching certain milestones.
"All milestones are related to the clinical and regulatory development of the agents, including approvals," said Bobba Venkatadri, MBI president and CEO.
The licensing agreement has been in the works for about a year and is the last piece in the global puzzle for MBI. The company has now licensed both FS069 and Oralex for sale in every territory around the world, with most global rights going to Mallinckrodt of St. Louis.
Chugai is actually the second Japanese partner to cut a deal with MBI for the sale of ultrasound agents. The first was Shionogi & Co., which began distributing MBI's prior-generation ultrasound contrast agent, Albunex.
The relationship was terminated in September 1996, following a dispute in which both companies exchanged notices of breach of agreement (SCAN 10/9/96). The resolution called for MBI to pay $3 million to Shionogi immediately and an additional $5.5 million over the next three years. Venkatadri said these earlier problems did not present a challenge to making the Chugai deal.
"I think the people in this business understand the risks of product development and commercialization," he said. "Not every product that gets approved becomes a blockbuster drug."
Optison shows early signs of being much more successful than Albunex, however. The contrast agent has been sold into almost 400 hospitals, with more than a 30% reorder rate. The Committee for Proprietary Medicinal Products has recommended Optison for approval in Europe. Optison could be in that market within a matter of weeks, according to Venkatadri.
The entry of FS069 into the Japanese market, however, might not happen for three to five years. One reason for the delay is Japanese insistence that human clinical trials take place in Japan. Venkatadri expects these trials to begin for both FS069 and Oralex, which displaces gas in the GI tract and distends the stomach to provide a better view of abdominal organs. Oralex only recently completed phase II clinical trials in the U.S.
"We're right on track to do what we set out to do," Venkatadri said. "We're very happy."