Keryx Licenses Japanese Rights For Zerenex To Japan Tobacco In $100 Million Deal

Source from:  pharmasianews.com 10/11/2007

Keryx Biopharmaceuticals got a major boost Sept. 26 in its effort to bring the Phase II hyperphosphatemia candidate Zerenex to the worldwide market by signing a licensing agreement potentially worth up to $100 million with Japan Tobacco and its subsidiary, Torii Pharmaceutical. Under the terms of the agreement, Japan Tobacco will receive development and commercialization rights to Zerenex in Japan in exchange for a $20 million upfront payment that must be booked by April 2008. "We believe this collaboration is a validation of the need and potential for a novel phosphate binder with the attributes of Zerenex," Keryx CEO Michael Weiss told investors during a same-day call. "And we believe that Zerenex could offer a blend of safety, efficacy and convenience that will make it a potential attractive alternative for doctors and patients. New York-based Keryx is seeking an indication for treatment of hyperphosphatemia, or elevated phosphate levels, in patients with end-stage renal disease. The company also announced it would initiate a Phase II high-dose Zerenex study by year-end. Should Zerenex make it to commercialization, the drug would likely compete with Genzyme's Renagel (sevelamer hydrochloride). That product, also a phosphate binder, is approved for control of serum phosphorus in patients with chronic kidney disease on hemodialysis. According to Genzyme's 2006 annual report, Renagel had revenues of $515 million in 2006. In June, Genzyme released mixed results of a study of a powder version of its Renagel follow-on, Renvela (sevelamer carbonate) ("The Pink Sheet" DAILY, June 18, 2007). Taking market share away from Renagel was an idea not lost on Weiss, who suggested during the call that Zerenex would have advantages over the Genzyme product. "We're looking at a drug that has a[n] ...efficacy and side effect profile that's comparable to both the leading products and the calcium products and polymer," Weiss said in response to an analyst's question. "So, what we have been embarking on [are] efforts to create novel formulations that are patient friendly ... [and] we do have lots of options and our job here is to actually come up with the formulation that we think is really ideal for the patient." The exec also said that Keryx is open to collaborating on development of Zerenex with U.S. and European partners. "If the right deal came along, the answer is yes," he stated. "But to caveat that again, we set extremely high hurdles for deals in the U.S., and [to a] somewhat lesser extent, but also including, Europe." According to Keryx, there are over 300,000 dialysis patients in the U.S. alone, and despite existing therapies, 70 percent of those patients still suffer from hyperphosphatemia. Japan has 250,000 dialysis patients. Wall Street analysts tended to respond favorably to the deal. Bear Stearns analyst Akhtar Samad wrote in a Sept. 26 note that the firm has a year-end 2008 price target of $26. Shares of Keryx closed up a penny on the NASDAQ to $9.75 at market close Sept. 26. Samad added, "We believe that the majority of investors will continue to focus on the Phase III results for Sulonex in diabetic nephropathy, expected in late February/March 2008." Sulonex (suloldexide) is Keryx's lead compound ("The Pink Sheet" DAILY, March 9, 2007). Renagel may have nearer-term competition from Amgen and its Phase II candidate, AMG 223. Baird analyst Christopher J. Raymond stated, "We understand Renagel's chief potential competitor - AMG 223 (f/k/a ILY-101) -is set to begin enrollment of an additional Phase II dose-ranging study." Amgen acquired AMG 223 through its June acquisition of Ilypsa ("The Pink Sheet" DAILY, June 5, 2007). "While Amgen maintains previous guidance of 1H08 Phase III initiation, we think some delay to Street expectations is now possible, resulting in a mild positive for the Renagel franchise and by extension Genzyme shares," Raymond continued. Baird has a $75 price target for Genzyme, whose shares closed unchanged at $63.13 on NASDAQ. Enditem