Stressgen and Roche broaden heat shock protein agreement to maximize value of HspE7
Tuesday December 2, 8:01 am ET
-- New Agreement Expands Partnership Options to Advance Multiple HPV-Related Disease Targets in Parallel and Expands Scope --
VICTORIA, BC and San Diego, CA, Dec. 2 /CNW/ - Stressgen Biotechnologies Corporation (TSX:SSB - News) and Roche announced today an innovative restructuring of their heat shock protein fusion alliance. Under the new agreement, the partnership divides the human papillomavirus (HPV) program for HspE7 into two separate and distinct programs. By separating the development programs, the market potential of HspE7 is optimized, while the strength and resources of both companies are utilized for the mutual benefit of the partnership. This new agreement creates significant value for Stressgen through increased revenues and downstream product rights. All amounts are in U.S. dollars.
Terms of the agreement include the following:
- Parallel development of multiple therapeutic indications by Stressgen
and Roche. The new agreement creates separate parallel development
programs for HspE7 products: Stressgen can develop its current HspE7
product (1st generation) for the treatment of all HPV-related
diseases except genital warts. Roche has the option to globally
develop another HspE7 product (2nd generation) exclusively for
genital warts under a separate milestone and royalty structure. If
the products achieve all contemplated development and commercial
milestones, the total partnership value to Stressgen could reach
$227 million.
- Stressgen to record first three years of sales. Stressgen will record
all 1st generation product sales in the U.S. and Canada of HspE7 for
three years following approval of a Biologics License Application
(BLA) with the U.S. Food and Drug Administration. Revenue models for
the initial therapeutic indication of recurrent respiratory
papillomatosis (RRP) project significant recurring revenue over three
years. These projections do not take into account potential other
applications including other serious HPV-related medical needs such
as LEEP failures in patients with cervical dysplasia and HIV positive
patients.
- Roche option at BLA approval. Roche has an option to commercial
rights for the 1st generation product upon the approval of a BLA, at
which point Roche would pay a considerable exercise fee to
commercialize 1st generation HspE7 product. If Roche exercises its
option, Stressgen will still record all product sales in the U.S. and
Canada for first three years, but beginning in Year 4, Roche will
record all sales worldwide, and will pay to Stressgen sales-based
payments, similar to royalties.
- Option to expand into oncology and hepatitis C. The new agreement
provides for options for Stressgen and Roche to develop additional
CoVal(TM) platform products in oncology and hepatitis C.
"The expansion of this agreement with Roche is clearly a value-creating initiative for Stressgen shareholders, as it allows us to advance HspE7 in multiple indications with downstream product rights and enhanced economics. This agreement provides for a significant increase in revenue to Stressgen compared to our original agreement and also provides for a potential $227 million in milestones and other payments," commented Daniel L. Korpolinski, President and Chief Executive Officer of Stressgen. "Over the past year, the clinical data from our Phase II trials for HspE7 in RRP have shown consistent patient benefit and we look forward to driving continued progress in its development."
"This latest transaction enables our partner to independently advance the lead product while allowing Roche to retain important access to the core technology of HspE7," stated William M. Burns, Head of the Pharmaceutical Division at Roche. "We continue to place high value in working with our partners to gain the greatest mutual benefit from our relationships." |
