Shire plc announced today the signing of an agreement with Renovo Group plc for the exclusive development and commercialization rights to JUVISTA®, Renovo's novel treatment in late phase 2 development for the prevention and reduction of scarring. Phase 3 trials are anticipated to commence in mid 2008.Under the terms of the agreement Shire has the exclusive right to commercialize JUVISTA worldwide, with the exception of EU member states.
Matthew Emmens, Chief Executive of Shire said, "This is a novel biopharmaceutical drug candidate that we believe could become a leader in the market for prevention and treatment of scarring, a market served by specialist physicians - as are all of Shire's markets.. Shire's strength in commercialization of specialty products combined with proven experience of building new specialty markets where patient need is high, through the introduction of novel treatments, makes us the ideal partner for Renovo in the development of JUVISTA."
"We are excited by the potential market opportunity and the profile of this drug candidate, which fits well with our specialty biopharmaceutical focus. Market research shows that surgeons and patients have a high concern for scarring and 90% of surgeons would use a preventative treatment if available. Renovo estimates that the U.S. total market could potentially be worth approximately US$4 billion. We look forward to the continued development of JUVISTA."
Professor Mark W J Ferguson, Renovo's Chief Executive Officer said:
"We are delighted to have partnered JUVISTA with Shire, which is a leading specialty company with a track record of successfully commercializing specialist pharmaceutical products in new therapeutic areas and an infrastructure which will enable us to maximise JUVISTA's potential.
"We believe that the two companies will make excellent partners. As the world experts in this field Renovo will continue to be responsible for developing JUVISTA, giving the clinical programme continuity and focus. Shire will provide us with their expert opinion, guidance, and regulatory expertise in successfully getting products to the market."
Financial terms
The financial terms of the agreement are geared to the success of the development and commercialization of JUVISTA. Following the satisfaction of a Hart Scott-Rodino clearance condition, Shire will pay Renovo US$75 million cash upfront (expensed as R&D for US GAAP purposes) and will make an equity investment in Renovo Group plc of US$50 million (at a subscription price of GBP2 per share, which at the date of this announcement represents approximately 7% of Renovo's share capital).
On the FDA's acceptance of the filing of the biologics license application for JUVISTA, Shire will pay US$25 million and on FDA approval, between US$50 and US$150 million depending on the characteristics of the approved product labelling. In addition, Shire will pay to Renovo royalties on sales of JUVISTA and milestone payments of up to US$525 million on the achievement of very significant sales targets.
Shire will bear the cost of clinical trials designed specifically for obtaining US regulatory approval. Renovo will bear the costs of clinical trials designed specifically for obtaining EU regulatory approval. Shire and Renovo will share equally the costs of conducting global clinical trials that are designed for obtaining both US and EU regulatory approvals.
JUVISTA - meeting a high unmet market need
JUVISTA (human TGFbeta3) is a novel biopharmaceutical investigational drug and when injected at the time of surgery has been shown in clinical trials to markedly improve subsequent scar appearance in the skin.
JUVISTA has been administered to over 1,500 human subjects and has shown statistical and clinically significant improvements in scarring in four preliminary phase 2 efficacy trials.
Renovo estimates that the US total market could potentially be worth approximately US$4 billion with 42 million patients undergoing surgery each year. This includes a large proportion of cash payers. Consumer research shows that 85% of patients would self pay for the reduction or prevention of scarring. Recognizing the changing dynamics of the US health reimbursement and pricing policies, Shire is actively managing the economic risk profile of its overall product portfolio by seeking an entry to the private pay market.
Surgeons have a high concern for scarring in 46% of total patient procedures. 90% of surgeons stated their intention to use a preventative drug (source: Mattson Jack Group).
The majority of patients discuss their concerns regarding scarring with their surgeon prior to surgery and 44% are unhappy with their scar following surgery. 87% of patients wanted their scars to be less noticeable (source: Adelphi International Research consumer study).
Current patient options are limited to treatment of existing formed scars, not the prevention of scarring and comprise OTC (over the counter) products or off-label prescribed steroid injections.
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