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Ortho-McNeil in diabetes pact

Ortho-McNeil-Janssen Pharmaceuticals has signed a deal with Swedish company Diamyd Medical AB that could be worth more than $600m

Ortho-McNeil-Janssen Pharmaceuticals (OMJPI), a subsidiary of Johnson & Johnson (J&J), has signed a deal that could be worth more than $600m with the Swedish drug-development company Diamyd Medical AB to develop and commercialise GAD65 antigen-based therapy for the prevention and treatment of type I diabetes.

The phase III drug is currently being tested in newly diagnosed type 1 diabetes patients to see whether it can delay or prevent disease progression by hindering the destruction of pancreatic islet beta cells. The companies hope that by focusing on beta cell function and improving glycaemic control, the drug may prove particularly effective at reducing the long-term complications of diabetes.

The deal calls for OMJPI to pay Diamyd $45m upfront and to share the costs of ongoing research and development activities, in addition to delivering potential development, regulatory and sales milestones that could be worth up to $580m. Diamyd will also receive sales-based royalties if the product is approved.

In return, OMJPI gains the right to take over the global development programme in 2011 after reviewing results from the first phase III study, which is being conducted in the European Union and is already fully enrolled. A second phase III study is being conducted in the US and is still enrolling subjects.

Diamyd retains the right to commercialise the product in the Nordic states. The Swedish company also holds on to the rights to the therapeutic use of the GAD65 gene and derivatives, fragments and variants of the GAD65 protein.

23rd June 2010

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