La Jolla Pharma Gets Lupus Lifeline from BioMarin (LJPC, BMRN)
La Jolla Pharmaceutical Company (NASDAQ: LJPC) may have just gotten a much needed lifeline after the close. The company has signed a development and commercialization pact with BioMarin Pharmaceutical Inc. (NASDAQ: BMRN) for its Riquent®, La Jolla’s investigational drug for lupus nephritis. Riquent is currently being evaluated in a Phase 3 clinical study for Lupus Nephritis, a condition which is currently considered a high unmet need and orphan disease.
If you have followed La Jolla Pharmaceuticals very long, you will likely know how dire their situation was previously looking. Under the terms of the agreement, BioMarin will receive a co-exclusive license to develop and commercialize Riquent. The terms state that La Jolla could receive up to $289 million in cash, which would come through milestones and equity purchases by BioMarin.
Specific payments include $15 million upfront, and can be up to approximately $92.5 million related to clinical milestones. This is via $55 million for regulatory milestones, and up to approximately $126 million for achieving specified annual net sales milestones beginning at $250 million in sales.
The pact is in the United States, Europe and all other territories of the world, excluding the Asia Pacific region. Following a successful Phase 3 trial, the parties will share equally in all losses and profits. In the United States, BioMarin and La Jolla will jointly commercialize Riquent. In Europe and other territories outside of Asia, BioMarin will be responsible for all commercialization activities.
BioMarin did note that the development history of Riquent has been long and challenging, but the company feels that Riquent reduces the frequency of renal flares in lupus nephritis patients.
The ASPEN Phase 3 study is the largest clinical study ever conducted in lupus nephritis and there is increasing evidence that Riquent targets one of the most important underlying causes of kidney disease in lupus patients, antibodies to double stranded DNA. Lupus nephritis is a serious and potentially fatal orphan disease treated by specialists, primarily nephrologists and rheumatologists, and there are no products specifically approved to treat lupus renal disease.
If the ASPEN study is successful, Riquent provides BioMarin an opportunity to launch a product in the 2010 and 2011 timeframe.
LaJolla will present the first interim analysis of the ASPEN trial data which is expected to occur later in this quarter.
Jon C. Ogg
January 6, 2009
