Michael, Roche/Stressgen collaboration conference call notes:
- CEO Korpolinski said the deal validates Stressgen's stress protein fusion technology and the HspE7 therapeutic in particular
- he said Roche brings
- a "global registration capability"
- a world-wide antiviral sales and marketing experience
- great biologic manufacturing capability by itself and it's
partners. One is in Japan.
- the capability to develop the full range of HspE7 indications
- the ability to create its own market for HspE7 with its recently acquired
HPV diagnostic company which can diagnose indications to be
treated by HspE7
- Stressgen has "a true partnership role" in the collaboration. The CEO was at great pains to emphasize this. There will be a joint development committee which will oversee clinical development and commercialization of HspE7. Such committees typically have 3 or 4 people from each company at each meeting and the chairmanship switches companies yearly.
- "under the direction of the joint development committee", Stressgen will develop (and pay for) bringing the RRP orphan drug indication to market. This is almost certainly the first indication to market. "in keeping with Stressgen's strategy to build marketing and sales capability for future stress protein fusion products, Stressgen will co-promote in the U.S. to RRP specialists"
- Roche is responsible for the development of (and paying the costs of) all other HspE7 indications (genital warts, cervical dysplasia, HPV-related cancers etc.) However, Stressgen retains the right to develop by itself new fusion proteins (not HspE7) for the treatment of HPV-related cancers (cervical cancer, anal cancer). 1/3 of head and neck cancers are HPV-related.
- Roche will do a 5 million $US purchase of Stressgen shares and pay an undisclosed up front fee at signing. There will be around 200 million US$ milestone payments spread out over development and commercialization. 1/3 of the 200 million will be in the 5 years after sales begin, the rest before.
- "over and above" the 200 million milestone payments, Roche will provide " tiered, progressive sales-based payments at favourable varying rates upon commercialization". By agreement, he could not say what the rates are. CEO Korpolinski said they did not want to call these royalties because Stressgen has an active role in the collaboration. He mentioned the joint development committee again.
- under the collaboration, Stressgen's only cost in HspE7 development will be bringing the orphan drug indication, RRP to market.
- in H2 2002 and 2003 a 40% - 60% reduction in burn rate for Stressgen
- pre-Gatt stress protein fusion patents are good until 2019 in North America and 2014 in Europe
- Roche sees HspE7 as a potential blockbuster and a billion dollar product.
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