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Dr Reddy's enters into in-licensing pact with US-based XenoPort

Livemint:  March 28, 2016

Hyderabad: Dr. Reddy’s Laboratories Ltd, India’s second largest drug maker, on Monday said it has entered into a licensing agreement with US-based XenoPort Inc. to develop and market the latter’s new chemical entity (NCE) to treat plaque psoriasis and multiple sclerosis for the US market.

As per the agreement, Dr. Reddy’s will be granted exclusive US rights to develop and commercialise XP23829 for all indications.

“In exchange for these rights, XenoPort will receive a $47.5 million up-front payment and an additional $2.5 million for transfer of certain clinical trial materials to Dr. Reddy’s,” the company said in a statement.

XenoPort will also be eligible to receive up to $190 million upon the achievement of certain regulatory milestones by Dr. Reddy’s. These milestones could be achieved over a period of several years. In addition, XenoPort will be eligible to receive up to $250 million upon the achievement of commercial milestones, and up to mid-teens royalty payments based on potential net sales of XP23829 in the US.

The agreement is subject to review by the US government under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act, as amended, and will become effective only after clearing HSR review, Dr. Reddy’s said.

XP23829 or monomethyl fumarate (MMF) is a prodrug candidate, discovered by XenoPort scientists with a goal of improving the side-effect profile and the absorption capabilities of MMF.

A prodrug is a medication which, after administration, gets metabolized or converted within the body into a pharmacologically active drug.

MMF has been shown to be an active agent that treats patients with relapsing forms of multiple sclerosis and those suffering from psoriasis.

XP23829 will be competing against Biogen Inc.’s blockbuster drug Tecfidera or di-methyl fumarate, a similar class of drug which was approved by US Food and Drug Administration (USFDA) and European Union (EU) for treatment of multiple sclerosis. The same di-methyl fumarate known as fumaderm was approved in Germany to treat psoriasis. Tecfidera had sales of around $2.9 billion in the US in 2015.

Tecfidera has been facing some safety concerns; a patient taking Tecfidera died after developing a rare brain infection in October 2014.

According to the XenoPort website, XP23829 in September completed successful phase 2 clinical trial in patients with moderate-to-severe chronic plaque-type psoriasis. XenoPort said the data generated from this study supports the potential evaluation of XP23829 as a treatment for either moderate-to-severe chronic plaque-type psoriasis or relapsing forms of multiple sclerosis.

XenoPort discontinued the development of XP23829 and was seeking a third-party partner for the development and commercialization of the drug, as it is focusing on the commercialization of HORIZANT or gabapentin enacarbil, an alcohol use disorder drug.

“XP23839 complements our internal development efforts, which have primarily focussed on the mild-to-moderate psoriasis segment to date,” said Raghav Chari, executive vice-president, proprietary products group of Dr. Reddy’s.

“In other markets, fumarates have been used as first line choices of treatment prior to initiation of biologic therapies in patients with moderate-to-severe psoriasis. We intend to initiate the registration programme for XP23829 as soon as feasible so that we can accelerate the availability of this important treatment choice for moderate-to-severe psoriasis patients in the US market,” Chari said.

Along with biosimilars, Dr. Reddy’s is betting big on proprietary products, focusing on two therapeutics areas, dermatology and neurology in the US market.

Psoriasis is a chronic inflammatory autoimmune disorder that manifests in the skin and joints. There is no cure for psoriasis, and treatment often requires complex medical intervention.

As many as 7.5 million Americans suffer from the condition, and approximately 1.5 million adults are considered to have moderate-to-severe psoriasis and between 150,000 and 260,000 new cases of psoriasis are diagnosed each year, Dr. Reddy’s said.

Multiple sclerosis is a progressive neurodegenerative disease. Although the exact prevalence is not known, it is estimated that approximately 250,000 to 350,000 people in the US have been diagnosed with multiple sclerosis, the company added.

Shares of Dr. Reddy’s dropped 0.07% and were trading at Rs.3,045 at 11.34 am on BSE, while the benchmark Sensex index declined 0.55% and was trading at 25,197.74 points.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.