Clinical stage partnering

Clinical stage partnering refers to a commercial deal or alliance signed when a compound or product is ...

Clinical stage partnering refers to a commercial deal or alliance signed when a compound or product is the subject of clinical testing.

Clinical trials are sets of tests in medical research and drug development that generate safety and efficacy data (or more specifically, information about adverse drug reactions and adverse effects of other treatments) for health interventions (e.g., drugs, diagnostics, devices, therapy protocols).

Due to these high costs, many smaller companies need to partner their compound or product in order to obtain the necessary funds and expertise to complete testing required prior to registration and marketing approval.

Report: Clinical Stage Partnering Terms and Agreements

 

Clinical stage partnering refers to a commercial deal or alliance signed when a compound or product is the subject of clinical testing.

Clinical trials are sets of tests in medical research and drug development that generate safety and efficacy data (or more specifically, information about adverse drug reactions and adverse effects of other treatments) for health interventions (e.g., drugs, diagnostics, devices, therapy protocols).

They are conducted only after satisfactory information has been gathered on the quality of the nonclinical safety, and health authority/ethics committee approval is granted in the country where approval of the drug or device is sought.

Previously, many emerging countries did not require local trials for product approvals. Now, though emerging countries still accept data from U.S./Europe, they also require some local trials.

Depending on the type of product and the stage of its development, investigators initially enroll volunteers and/or patients into small pilot studies, and subsequently conduct larger scale studies in patients that often compare the new product with others already approved for the affliction of interest.

As positive safety and efficacy data are gathered, the number of patients is typically increased. Clinical trials can vary in size, and can involve a single research entity in one country or many such entities in multiple countries.

A full series of trials may incur sizable costs, and the burden of paying for all the necessary people and services is usually borne by the sponsor, which may be a governmental organization or a pharmaceutical, biotechnology or medical device company.

When the diversity of required support roles exceeds the resources of the sponsor, a clinical trial is managed by an outsourced partner, such as a contract research organization or a clinical trials unit in the academic sector.

Clinical stage partnering

Report: Clinical Stage Partnering Terms and Agreements

Due to these high costs, many smaller companies need to partner their compound or product in order to obtain the necessary funds and expertise to complete testing required prior to registration and marketing approval.

Clinical stage partnering deals are often announced once a compound or product has achieved a certain stage in the development cycle and where the licensor company requires funds and/or expertise from a licensee, often a larger company with expertise and marketed product track record in the therapy area of the compound/product.

For the licensor

There are numerous reasons for the licensor company entering into clinical stage deals:

  • Licensor unable to afford costs of next clinical studies
  • Licensor lacks the expertise or capacity to efficiently progress next clinical studies
  • Licensor seeking third party expertise to position clinical studies for maximum market opportunity and/or maximum chances of success with viable endpoint
  • Need to secure additional revenue streams for existing or new activities, or to reward investors unwilling to wait for commercialization
  • Alternative revenue stream to equity, bank or flotation routes when these routes are difficult to access
  • Licensor wishing to explore new therapeutic opportunities
  • Hedge against risk of clinical failure whereby value of asset may reduce to zero rapidly
  • Positioning to maximize market opportunity assuming successful clinical development
  • Expand market opportunity into additional territories
  • Co-promote to maximize market penetration in shortest possible time
  • Allow third party to exploit additional therapeutic opportunities outside core interest
  • A previous merger/acquisition has forced asset disposal
  • Access to quids in terms of training, marketing experience, products
  • Endorsement of product or technology to satisfy investors

For the licensee

There are numerous reasons for the licensee company entering into clinical stage deals:

  • Seeking new drug candidates to bolster existing development pipeline
  • Identifying complementary drug candidates to existing product portfolio
  • Leverage existing expertise to accelerate promising drug candidates to the market
  • Leverage existing territorial expertise to optimize a licensors product opportunity
  • Hedge against own pipeline failures
  • Protect market position against a potentially threatening new entrant
  • Prevent competitor from accessing a product competitive to licensees market position
  • Allow rapid entry into new therapeutic areas and territories
  • Allow access to technology outside core expertise
  • Provide next generation product to existing declining product range

There are three primary phases of clinical stage product development - they are:

  • Phase 1: Screening for safety - researchers test an experimental drug or treatment in a small group of people (20-80) for the first time to evaluate its safety, determine a safe dosage range, and identify side effects
  • Phase 2: Establishing the testing protocol - the experimental treatment is given to a larger group of people (100-300) to see if it is effective and to further evaluate its safety
  • Phase 3: Final testing - the treatment is given to large groups of people (1,000-3,000) to confirm its effectiveness, monitor side effects, compare it to commonly used treatments, and collect information that will allow it to be used safely

There are a couple of other clinical stages of development which are referred to - they are:

  • Phase 0: Pharmacodynamics and Pharmacokinetics - often undertaken after preclinical and before phase I clinical - first-in-human trials. Single subtherapeutic doses of the study drug are given to a small number of subjects (10 to 15) to gather preliminary data on the agent's pharmacodynamics (what the drug does to the body) and pharmacokinetics (what the body does to the drugs)
  • Phase 4: Postapproval studies - postmarketing studies delineate additional information, including the treatment's risks, benefits, and optimal use

Report: Clinical Stage Partnering Terms and Agreements

Teva – Xenon Pharmaceuticals

Teva Pharmaceutical Industries and Xenon Pharmaceuticals have entered into a collaborative development and exclusive worldwide license for XEN402.

The deal breakdown:

  • Teva will pay Xenon an upfront fee of $41 million
  • Teva shall pay development, regulatory, and sales-based milestones totaling up to $335M
  • Xenon is entitled to royalties payable on sales
  • Option to participate in commercialization in the US

View the full deal at Current Agreements: Licensing and co-development agreement for XEN402

AstraZeneca - Ardelyx

AstraZeneca and Ardelyx announced a worldwide exclusive licensing agreement for Ardelyx’s NHE3 inhibitor programme, including the Phase 2-ready lead compound RDX5791, for the treatment of complications associated with end-stage renal disease and chronic kidney disease.

The deal breakdown:

  • AstraZeneca will pay $35 million up front
  • Development milestones of $237.5 million and milestones related to launch and commercialization
  • Tiered double-digit royalties.
  • AstraZeneca will assume the subsequent development costs and Ardelyx will conduct clinical trials in Phase 2
  • Ardelyx has secured an option to co-promote the product in the US, subject to agreed limitations
  • Additional financial details were not disclosed

View the full deal at Current Agreements: Licensing and option agreement for RDX5791

Report: Clinical Stage Partnering Terms and Agreements

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