Neuromed strikes major Merck deal
Neuromed Pharmaceuticals Ltd., a closely held, eight-year-old biotech spinoff from the University of British Columbia, has struck a drug research deal valued at up to $500-million (U.S.) with giant Merck & Co. Inc., the richest collaboration ever in Canada that could set the stage for going public.
Still reeling from the recall of its $2.5-billion-a-year Vioxx painkiller, Merck has obtained exclusive rights to Neuromed's experimental drugs for chronic pain and anxiety, including NMED-160, which is in mid-stage trials to treat arthritis pain.
"This is a good example of what's possible in Canada, where you have a university that's very supportive of research and willing to transition that research into products," said Neuromed president and chief executive officer Christopher Gallen.
UBC professor Terrance Snutch set up Neuromed in 1998 with $3.2-million in venture capital. The initiative was based on his research to selectively block the influx of calcium into nerve cells that cause pain signals. Drugs known as calcium channel blockers have been used for several decades to treat high blood pressure and relieve heart-related chest pain.
Mr. Snutch, who is now chief scientific officer of the Vancouver-based company, took the process one step further by targeting the point where pain signals are transmitted from one nerve cell to another. That gave rise to NMED-160 as a treatment for pain that originates in nerves and inflammatory conditions, such as arthritis, instead of pain from an external injury.
By selectively regulating the concentration of calcium in cells, he said the company also has a family of compounds in addition to NMED-160 that have the potential to become new treatments for epilepsy and cardiovascular disease, and are outside of the scope of the Merck accord.
"This is a new category of therapeutics that we think has the potential to be huge," Dr. Gallen said, pointing to the last big technology platform to treat central nervous system disorders -- selective serotonin reuptake inhibitors (SSRIs), including anti-depressants such as Prozac.
He said NMED-160 has the potential to be as powerful as morphine and other opiates but without the side effects of addiction and motor function impairment.
Merck, based in Whitehouse Station, N.J., has agreed to make an initial $25-million payment to Neuromed and finance its research for two years, with an option to renew for an additional two years. Should NMED-160 win regulatory approvals globally, Merck would pay Neuromed an additional $202-million. The payments would grow to $450-million if the drug is later approved for a second use. Neuromed would also receive royalties on any sales by Merck.
Janet Skidmore, a spokeswoman for Merck, the fourth-largest U.S. drug maker, said the deal is not an attempt to replace Vioxx, which was yanked from the market in 2004 after its long-term use was tied to an increased risk of heart attacks and strokes.
She said Merck has identified pain as one of nine medical treatment areas that it is focusing on.
Dr. Gallen said Neuromed had been in partnering talks for several years with a group of pharmaceutical companies before selecting Merck because of its research, clinical development and ability to market pain drugs.
Earlier this month, the company raised $25-million in its fourth round of venture capital financing, for a total of $76-million since 1998. "Up until now, we've been focused on development, financing and partnering, but now we will strongly consider an IPO [initial public offering]," Dr. Gallen said.
The deal
- Merck gains exclusive rights to Neuromed's experimental drugs for chronic pain and anxiety, including NMED-160
- Merck pays $25-million up front and finances Neuromed's research for two years, with an option to renew for two more years.
- Should NMED-160 win regulatory approvals globally, Merck would pay Neuromed an additional $202-million.
- Payments would grow to $450-million if it is approved for a second use.
- Neuromed receives royalties on any Merck sales.
Still reeling from the recall of its $2.5-billion-a-year Vioxx painkiller, Merck has obtained exclusive rights to Neuromed's experimental drugs for chronic pain and anxiety, including NMED-160, which is in mid-stage trials to treat arthritis pain.
"This is a good example of what's possible in Canada, where you have a university that's very supportive of research and willing to transition that research into products," said Neuromed president and chief executive officer Christopher Gallen.
UBC professor Terrance Snutch set up Neuromed in 1998 with $3.2-million in venture capital. The initiative was based on his research to selectively block the influx of calcium into nerve cells that cause pain signals. Drugs known as calcium channel blockers have been used for several decades to treat high blood pressure and relieve heart-related chest pain.
Mr. Snutch, who is now chief scientific officer of the Vancouver-based company, took the process one step further by targeting the point where pain signals are transmitted from one nerve cell to another. That gave rise to NMED-160 as a treatment for pain that originates in nerves and inflammatory conditions, such as arthritis, instead of pain from an external injury.
By selectively regulating the concentration of calcium in cells, he said the company also has a family of compounds in addition to NMED-160 that have the potential to become new treatments for epilepsy and cardiovascular disease, and are outside of the scope of the Merck accord.
"This is a new category of therapeutics that we think has the potential to be huge," Dr. Gallen said, pointing to the last big technology platform to treat central nervous system disorders -- selective serotonin reuptake inhibitors (SSRIs), including anti-depressants such as Prozac.
He said NMED-160 has the potential to be as powerful as morphine and other opiates but without the side effects of addiction and motor function impairment.
Merck, based in Whitehouse Station, N.J., has agreed to make an initial $25-million payment to Neuromed and finance its research for two years, with an option to renew for an additional two years. Should NMED-160 win regulatory approvals globally, Merck would pay Neuromed an additional $202-million. The payments would grow to $450-million if the drug is later approved for a second use. Neuromed would also receive royalties on any sales by Merck.
Janet Skidmore, a spokeswoman for Merck, the fourth-largest U.S. drug maker, said the deal is not an attempt to replace Vioxx, which was yanked from the market in 2004 after its long-term use was tied to an increased risk of heart attacks and strokes.
She said Merck has identified pain as one of nine medical treatment areas that it is focusing on.
Dr. Gallen said Neuromed had been in partnering talks for several years with a group of pharmaceutical companies before selecting Merck because of its research, clinical development and ability to market pain drugs.
Earlier this month, the company raised $25-million in its fourth round of venture capital financing, for a total of $76-million since 1998. "Up until now, we've been focused on development, financing and partnering, but now we will strongly consider an IPO [initial public offering]," Dr. Gallen said.
The deal
- Merck gains exclusive rights to Neuromed's experimental drugs for chronic pain and anxiety, including NMED-160
- Merck pays $25-million up front and finances Neuromed's research for two years, with an option to renew for two more years.
- Should NMED-160 win regulatory approvals globally, Merck would pay Neuromed an additional $202-million.
- Payments would grow to $450-million if it is approved for a second use.
- Neuromed receives royalties on any Merck sales.
posted by Chris Placitella at 9:29 AM
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