Novartis seals biotech alliance

Swiss pharma company Novartis has forged a respiratory R&D agreement with two UK biotech companies.

The deal could see biotech companies Arakis and Vectura receive up to $375m in payments and initial milestones for their chronic obstructive pulmonary disease (COPD) treatment AD 237, which is currently in phase II clinical trials.

Jointly developed by the companies, AD 237 is a once-daily, long-acting muscarinic antagonist (LAMA) with a fast onset of action. In clinical trials it has proved to be well-tolerated and effective over 24 hours in a single dose.

Under the terms of agreement, Novartis will be responsible for developing AD 237 both as a monotherapy and in combination with QAB149, its once-daily, long-acting beta2 agonist currently in phase II clinical trials.

Arakis and Vectura will each receive an initial payment of $15m. Further clinical, regulatory and commercialisation payments will also be payable upon the achievements of pre-agreed targets and could total up to $172.5m.

If the treatment receives regulatory approval, the companies are expected to command a 12 per cent share of royalties.

Dr Ken Cunningham, chief executive of Arakis said: ìThis collaboration is Arakis' first major out-licensing agreement and validates the company's approach to low-risk drug development. As one of the world's leading companies in the treatment of respiratory disease, Novartis is an ideal partner for AD 237.î

Dr Chris Blackwell, chief executive of Vectura added: ìWe believe that AD 237 will play a major role in the expansion of the COPD market which is underserved today but set for dramatic growth over the coming decade.î

Novartis now has two promising bronchodilator drugs in its late-stage pipeline as a result of the deal.