Nycomed Amersham withdraws option to market several Diatide radiotracers

August 19, 1998

Diatide is confident it can find new development partnerRadiopharmaceutical company Diatide took a hit this month when Nycomed Amersham of Buckinghamshire, U.K., ended its option and development agreement with the Londonderry, NH-based firm for

Diatide is confident it can find new development partner

Radiopharmaceutical company Diatide took a hit this month when Nycomed Amersham of Buckinghamshire, U.K., ended its option and development agreement with the Londonderry, NH-based firm for several peptide-based radiopharmaceuticals in development. Nycomed Amersham's pullout does not affect the two Diatide radiotracers that are closest to market, AcuTect and P829.

Nycomed's decision denies Diatide $3 million in R&D payments that would have been due the company over the next several years. Diatide will still receive two milestone payments totaling $4 million in the current quarter, and another $2 million in 1999 once the Food and Drug Administration clears P829, which Diatide expects to occur in December.

The two companies established the partnership in 1995, when Nycomed made a $10 million equity investment in Diatide, then known as Diatech (SCAN 8/30/95). In addition to the investment, Nycomed contributed R&D support and milestone and royalty payments to Diatide. The companies' alliance included three agreements: the option and development deal to which R&D payments were linked, U.S. co-promotion of Diatide's optioned products, and European licensing. The deal gave Diatide the financial backing it needed to develop its peptide-based agents, and gave Nycomed access to the radiopharmaceutical market, a segment in which it previously did not operate.

But Nycomed's 1997 merger with Amersham International gave the Norwegian company a major position in the radiopharmaceutical segment (SCAN 7/9/97). That merger is the key reason for Nycomed's decision to withdraw the options, according to Nycomed executives.

"With the merger with Amersham, we decided we needed to focus on internal R&D," said Carol Perlman, vice president of corporate communications. "It's that simple. Right now we have to concentrate on what we have in our own pipeline."

Perlman declined to comment on Nycomed's particular works-in-progress. However, with the release of its most recent financial results, Nycomed Amersham listed four imaging radiopharmaceuticals in its product pipeline: AcuTect and P828 from Diatide, as well as Datscan, an agent for diagnosing Parkinson's disease, and Prognox, a tumor and cardiology management agent for detection of hypoxic tissue. The company has completed clinical trials for Datscan and expects to submit for regulatory approval later this year. Prognox is in phase II clinical trials.

Despite the loss of Nycomed's R&D money, Diatide executives put a positive spin on the news, emphasizing that Nycomed has pulled out of only one of the three agreements inked in 1995.

"They kept the two most important ones, which are the money makers for Diatide," said Dr. Richard Dean, president of Diatide. "The key thing is that we're moving now into a new phase of the alliance, and that's the marketing of our products."

Diatide will regain U.S. rights for its other agents currently in phase II clinical trials, including P748, for pulmonary emboli imaging, P483H, for infection imaging, and P773, for atherosclerosis imaging. Nycomed will retain its European licensing rights to these agents. Diatide expects these products to come to market in late 1999 or early 2000, depending on the completion of phase III trials and new drug applications (NDA) for each.

Both companies emphasized that the termination of the options and development agreement will not affect Nycomed's marketing of AcuTect and P829. Diatide has received an approvable letter from the FDA for AcuTect, and final approval could come as early as next month. But Diatide will consider seeking new marketing partners for its other products, according to Dean.

"If AcuTect makes a lot of money, as we think it might, we may not want to partner our U.S. rights for our other pipeline products," Dean said. "But in the event that we want to supplement revenues over the next couple of years with some (revenue partners), we may decide to do a deal. We're in a much better position now because we have those options."