Dr Reddy’s inks licensing deal with XenoPort for Rs 3,260 cr

Pharma major will develop US firm’s new chemical entity into a drug for psoriasis, and market it in US

Hyderabad: Dr Reddy's Laboratories on Monday said it signed a license agreement with US-based pharma firm XenoPort for the development and commercialisation in the US market of latter’s clinical-stage oral new chemical entity, XP23829.

Dr Reddy’s will develop the new chemical entity as a potential treatment for moderate-to-severe chronic plaque psoriasis and may also potentially develop it for relapsing forms of multiple sclerosis (MS).

Considered as the one of the largest in-licensing agreements inked by an Indian pharma company so far, the deal involves payment commitment of up to $490 million (nearly Rs 3,260 crore) by the city-based pharma major.

Under the deal, Dr Reddy’s will receive exclusive US rights to develop and commercialize XP23829 for all indications. In exchange for these rights, XenoPort will receive a $47.5 million upfront payment and an additional $2.5 million for transfer of certain clinical trial materials to Dr Reddy’s.

In addition, XenoPort will also be eligible to receive up to $190 million upon the achievement by Dr. Reddy’s of certain regulatory milestones, which could be achieved over a period of several years.

Furthermore, the US firm 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 United States, a statement from Dr Reddy’s said.

“XP23829 complements our internal development efforts, which have primarily focused on the mild-to-moderate psoriasis segment to date. 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,” said Raghav Chari, Executive Vice President, Proprietary Products Group, Dr. Reddy’s.

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, he added. 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.

“As one of our key objectives for 2016, we were interested in finding a strong partner that would recognize the opportunity of this innovative therapy that we believe will make a significant difference in the lives of psoriasis and MS patients,” said Vincent J. Angotti, Chief Executive Officer, XenoPort, Inc.

Psoriasis is a chronic, systemic, inflammatory disease that manifests in the skin and/or joints. It is the most prevalent autoimmune disease in the US with as many as 7.5 million Americans suffering from the condition. And, 1.5 lakh to 2.60 lakh new cases of psoriasis are diagnosed each year.

“Based on today's available treatments, physicians need additional oral medications that are both safe and effective for patients with psoriasis. XP23829, a novel fumaric acid ester, has the potential to be a meaningful treatment option for patients with moderate-to-severe psoriasis,” said Dr Mark Jackson, Professor of Medicine, Dermatology, University of Louisville.