Pfizer licenses Repligen’s SMA drug at phase I, but still trails

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Charles Dickens was not wrong: sometimes orphans really do have great expectations. With NPS Pharmaceuticals having priced Gattex at $295,000 per patient per year and three other drugs approved last year that each cost $200,000-plus, orphan diseases are lucrative indeed.

This is not lost on Pfizer, which has licensed Repligen’s investigational drug for spinal muscular atrophy – this affects around 50,000 infants in the US – for a potential $70m. The decision to license the drug, called RG3039, before it has entered phase II is at first glance a little harder to fathom, but factoring in the possibility that the FDA will not require phase III trials to grant approval, Pfizer’s reasoning becomes clearer.

Repligen’s reasoning is also easy to follow. The Waltham, Massachusetts company decided in August that it would concentrate on its more profitable bioprocessing operations. It had itself licensed RG3039 from a charity, Families of SMA, in 2009 for an undisclosed amount.

Little up front

The new deal is heavily back-end loaded, netting Repligen just $5m up front with a potential $65m in milestone payments. Pfizer will also pay undisclosed royalties on RG3039 or other backup compounds developed under the agreement. Repligen’s share price increased by 4% thanks to the agreement.

Repligen will shepherd RG3039 through the first two groups of healthy volunteers in a phase I trial that is already under way; Pfizer will then take over. The changeover ought to occur in March.

After that, development should be relatively swift: in addition to its EU and US orphan drug designation, RG3039 has FDA fast-track status.

Should Pfizer manage to get the drug to market, it is possible that it will find Roche already there. The Basel giant licensed an SMA programme from PTC Therapeutics in November 2011. This deal was also back-end loaded, but far richer – $30m initially and $460m in milestones (Therapeutic Focus – Roche ups big pharma stakes in spinal muscular atrophy, November 30, 2011).

Meanwhile, Trophos's olesoxime is in phase III trials, meaning that it is around two years ahead of Pfizer’s new purchase. This could have ramifications for Pfizer’s pricing strategy. One orphan drug on the market appears to be a licence for its developer to charge a high price. Two could be unsustainable.

To contact the writer of this story email Elizabeth Cairns in London at elizabethc@epvantage.com or follow @LizEPVantage on Twitter

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