Genzyme, TKT end disputes
Once-bitter rivals drop patent battles, forge drug-development deal
By Jeffrey Krasner, Globe Staff, 10/9/2003
After years of battle involving patent litigation and regulatory races, Transkaryotic Therapies Inc. and Genzyme Corp. decided yesterday to bury their hatchets.
In a sweeping settlement, the two Cambridge companies ended their patent disputes over two drugs, Replagal and Aldurazyme, and agreed to become partners to develop TKT's I2S, a prospective treatment for Hunter syndrome.
Genzyme had sued TKT, alleging Replagal infringed on its patents, and TKT had threatened to sue Genzyme over its Aldurazyme treatment for a rare disease called MPS 1. But TKT has now backed off that possible action.
The agreement is a radical shift for TKT, which is perhaps best known for its January 2001 defeat in a landmark patent dispute trial with California biotech giant Amgen Inc. While TKT had won a significant victory against Genzyme in a separate legal battle over sales of Replagal, TKT chief executive Michael J. Astrue said it was time to change the way it did business.
"It's a move to a new paradigm," Astrue said yesterday. "We'll be putting a lot less money into litigation and a lot more into the pipeline."
The deal also represents a strong endorsement by Genzyme of TKT's I2S, a treatment for Hunter syndrome in late-stage pivotal trials.
"This is Genzyme validating proof of concept for TKT's approach to this disease," said analyst Jennifer Chao of RBC Capital Markets. "They're already enrolling patients for a phase 3 trial. From Genzyme's perspective, they've seen enough to feel TKT has a winner."
In a conference call, Genzyme chairman Henri A. Termeer said, "This is a disease that's very much a Genzyme kind of disease. We're in the business of bringing products to market for these ultra-orphan diseases."
In the United States and Europe, regulators can grant orphan drug status to therapies intended to help rare diseases for which there are no treatments. The orphan drug status essentially gives the drug maker a seven-year monopoly for a small, underserved market, unless a competitor can develop a drug that is demonstrably better. Genzyme has developed a series of drugs for such diseases.
TKT has been developing I2S as a treatment for Hunter syndrome, a rare genetic disorder that leaves its victims unable to break down a type of fat. That fat gradually accumulates in the body over time, causing tremendous pain and disability. Many patients die before they are 20 years old.
In countries with insurance reimbursement for expensive drugs, about 2,000 patients are believed to suffer from the condition, the companies said.
Under the deal, Genzyme and TKT will collaborate on the development and marketing of I2S, which has been awarded orphan drug status in both the United States and Europe. Genzyme will sell the drug in Pacific Rim markets, including Japan, Australia, Taiwan, and South Korea. In those markets, TKT will receive a royalty of about one-third of revenues. TKT retains the rights to develop and market the drug in North America, Europe, and Latin America.
Genzyme will pay TKT $3 million immediately and $8 million when it makes specified progress toward regulatory approval in Japan. Genzyme also gets an option to negotiate a similar deal to develop and market a TKT drug for San Filipo syndrome, another rare disease, in the same Pacific Rim countries.
Until yesterday, Genzyme and TKT were bitter rivals. Each firm had sought FDA approval to market virtually identical drugs for Fabry disease. But last fall, TKT announced problems with its clinical data supporting its drug candidate, Replagal. In January, an FDA review panel said TKT's data didn't support approval. The final decision came in April when Genzyme's Fabrazyme was approved by the agency.
Aldurazyme treats a genetic disease that can cause dwarfism and organ problems, affecting about 4,000 people worldwide.
The agreement with Genzyme is the latest in a series of turnaround steps executed since Astrue became TKT's chief in February. Astrue formerly served the company as general counsel, and had left the firm last fall. But he was recruited to lead the company after the board ousted founder and former chief executive Dr. Richard Selden.
Both companies will remain competitors in Europe, where Replagal has been approved to treat Fabry.
"We'll compete in the Fabry space and we'll do it in a gentlemanly manner," said Termeer.
Astrue said the collaboration on TKT's I2S was structured to minimize the chance for friction between the former rivals.
"We've tried to minimize stress by rejecting a joint venture model," he said. "Can Genzyme and TKT really work together? I believe we can."
The agreement was announced after the markets closed. On the Nasdaq Stock Market, shares of TKT fell 58 cents to $11.96, and shares of Genzyme fell 62 cents to $47.99.
Jeffrey Krasner can be reached at krasner@globe.com. |
