Glaxo rotavirus vaccine highly effective: study
Thu Nov 22, 2007 7:21pm EST
LONDON (Reuters) - GlaxoSmithKline Plc's Rotarix vaccine given along with other routine infant shots is highly effective at protecting against rotavirus, the most common cause of severe diarrhoea in young children, researchers said on Friday.
New data from a large European trial, published in the Lancet journal, showed the oral vaccine worked against the five most commonly circulating rotavirus types -- G1, G2, G3, G4 and G9 -- responsible for 98 percent of rotavirus gastroenteritis.
The researchers found that after one dose of the vaccine, 24 out of 2,572 infants given the vaccine had rotavirus gastroenteritis episodes of any severity compared to 94 out of 1,302 given placebo, giving a vaccine efficacy of 87.1 percent.
Vaccine efficacy after two doses over two rotavirus seasons remained high at 78.9 percent and was 90.4 percent against severe rotavirus gastroenteritis, Timo Vesikari of Finland's University of Tampere and colleagues reported.
"Our study findings show that, if integrated into routine infant immunization schedules, vaccination with RIX4414 (Rotarix) could result in significant reduction not only of rotavirus disease burden but also of severe pediatric gastroenteritis during the first two years of life," they said.
Rotavirus kills an estimated 611,000 children worldwide every year, the vast majority of them in Africa and Asia, and the arrival of a new generation of oral vaccines against the disease has been welcomed by healthcare workers.
But some experts caution against assuming that vaccines like Glaxo's Rotarix and Merck & Co Inc's rival product RotaTeq will work equally well in all countries.
In a commentary in the Lancet, Australian pediatric experts Keith Grimwood and Julie Bines said virus diversity in Africa and Asia meant no global vaccination recommendations could be made until vaccine trials were completed in these regions.
From Avant's 10-Q:
In 1997, AVANT entered into an agreement with Glaxo to collaborate on the development and commercialization of the Company’s oral rotavirus vaccine and Glaxo assumed responsibility for all subsequent clinical trials and all other development activities. AVANT licensed-in the Rotarix® technology in 1995 and owes a license fee of 30% to Cincinnati Children’s Hospital Medical Center (“CCH”) on net royalties received from Glaxo. AVANT is obligated to maintain a license with CCH with respect to the Glaxo agreement. All licensing fees are included in research and development expense. The term of the Glaxo agreement is through the expiration of the last of the relevant patents covered by the agreement, although Glaxo may terminate the agreement upon 90 days prior written notice.
In May 2005, AVANT entered into an agreement whereby an affiliate of Paul Royalty Fund II, L.P. (“PRF”) purchased an interest in the net royalties AVANT will receive on worldwide sales of RotarixÒ. Under the PRF agreement, AVANT will retain 50% of future Glaxo milestone payments beginning on the effective date of the agreement with PRF, with 70% of the remaining balance payable to PRF and 30% of the remaining balance payable to CCH, respectively.
The PRF transaction qualifies as a sale in accordance with guidance in EITF 88-18, “Sale of Future Revenues.” The upfront unconditional payment of $10 million and the $40 million milestone payment for launch in the European Union were recorded by AVANT as deferred revenue upon receipt. Any future milestone payments received from PRF will also be recorded as deferred revenue. Revenues are being recognized and calculated based on the ratio of total royalties received from Glaxo and remitted to PRF over expected total amounts to be received by PRF and then applying this percentage to the total cumulative consideration received from PRF to date. The expected total of payments to PRF is an estimate which will be updated for any changes in expectations of such payments. The impact of any such changes will be applied prospectively.
In February 2006, the European Commission granted approval of RotarixÒ in the European Union, which triggered a $4 million milestone payment from Glaxo, 50% of which is creditable against future royalties. Revenue of $2.6 million was recorded in the first quarter of 2006 as AVANT has no continuing obligations to incur any research and development costs in
connection with the Glaxo agreement. Glaxo has agreed to make further payments, which could total up to $1.5 million, upon achievement of a specific milestone.
AVANT also recorded $600,000 in royalty expense payable to Cincinnati Children’s Hospital Medical Center (“CCH”) as a result of this milestone payment. AVANT remitted the remaining $1.4 million of the Glaxo milestone payment to PRF in accordance with the PRF agreement. As a result, in the first nine months of 2006, AVANT also recognized $550,803 in product royalty revenue related to PRF’s purchased interests in the net royalties that AVANT receives from RotarixÒ worldwide net sales. In the first nine months of 2007, AVANT recognized $2,742,689 in RotarixÒ-related product royalty revenue consisting of $1,444,058 related to PRF’s purchased interest in Rotarix® net royalties and $1,298,631 related to AVANT’s retained interest in Rotarix® net royalties which were not sold to PRF, which also corresponds to the amount payable by AVANT to CCH. As such, a corresponding amount is recorded as royalty expense and included in research and development expense. Based on management’s best estimates of the amount and timing of Glaxo royalties, the Company has classified $4,118,503 and $43,886,636 of the deferred revenue balance at September 30, 2007 as short-term and long-term, respectively.
In September 2006, AVANT received notice from Glaxo that Glaxo would begin paying royalties on sales of RotarixÒ vaccine at the lower of two royalty rates under their 1997 license agreement. Glaxo’s decision to pay the lower royalty rate (which is 70% of the full rate) is based upon Glaxo’s assertion that RotarixÒ is not covered by the patents Glaxo licensed from AVANT in Australia and certain European countries. AVANT is analyzing various options to counter Glaxo’s assertions and protect AVANT’s rights. AVANT is determined to take all available steps to enforce its rights under its license agreement with Glaxo. AVANT has recognized royalty revenue at the lower royalty rates and will continue to do so until the dispute with Glaxo is resolved. |
