Merrill's take on that news:
Collaborative agreement with Genentech for ALTU-238
Altus announced a North American collaborative agreement with Genentech for
ALTU-238, its once-weekly growth hormone product candidate, with an option for
a global partnership. We view Genentech as a good choice given its U.S market
leadership and its prior experience with a long-acting growth hormone product.
The deal also validates Altus’ protein crystallization technology. Reiterate Buy.
Details of the exclusive license agreement
Genentech will pay all development and commercialization costs for ALTU-238
and the companies will co-promote in North America. Altus will receive an upfront
payment of $15mn, an equity investment of $15mn, potential milestone payments
of $140mn and “double digit” royalties on product sales. A global partnership
could bring Altus additional upfront and milestone payments of over $110mn.
Genentech is a good fit for Altus
Genentech’s once-daily injectable growth hormone, Nutropin, is the U.S. market
leader (est. ‘06 U.S. sales $377 mn), and it has prior experience with a long acting
version, Nutropin Depot, which was marketed from 1999 to 2004.
Expect ALTU-238 pivotal trial program to begin in 2007
Altus expects a phase III trial for ALTU-238 in adults and a phase II pediatric trial
to begin in 2007. We assume a mid-’07 start, but expect more specific timing
pending decisions by the new co-development committee.
Reiterate Buy
Altus remains a top small cap pick with two product candidates, ALTU-135, and
ALTU-238 in pre-phase III development. Reiterate Buy. |
