Amicus Eyes Breakthrough Drug, PRV Revenue In Scioderm Buy
This article was originally published in Scrip
Amicus Therapeutics chairman and CEO John Crowley had special insight into the value of Scioderm's topical drug candidate Zorblisa (SD-101) – he's been a member of the small, private company's board of directors for two years and became convinced that Amicus could add value to the "breakthrough" treatment for epidermolysis bullosa (EB).
Cranbury, New Jersey-based Amicus will pay $229m up front and up to $947m total for a drug candidate that will expand its rare disease portfolio and could give the company its second new drug approval in a two-year period. The Scioderm transaction also may give Amicus a pediatric priority review voucher (PRV) that, based on recent transactions, the company could sell for hundreds of millions of dollars.
However, Amicus chairman and CEO John Crowley told Scrip that the purchase price for Scioderm did not take into account the revenue that could be generated from the sale of a PRV, which the US FDA could grant to Amicus upon approval of Zorblisa. His company's assessment of Scioderm's worth was based on the potential for Zorblisa to generate more than $1bn in annual sales based on an EB market in the US, top five EU markets and Japan, which includes about 30,000 to 40,000 patients.
The product candidate already has a breakthrough therapy designation, which speeds effective treatments for diseases with no available therapies through the FDA's review process, and it was one of the first drugs to win the coveted breakthrough designation in 2013. There are no approved drugs for EB, but wound management costs $10,000 to $15,000 per month for the disfiguring skin condition, which is characterized by blistering that leads to severe open sores from minor trauma.
"The PRV is further upside to the deal potential here," Crowley said.
United Therapeutics recently obtained the highest price to date for a PRV when it sold a voucher to AbbVie for $350m. PRV grantees can use the voucher to win faster approval of their next new drug approval or they can sell the PRV to another company. The terms of the Scioderm acquisition suggest that Amicus intends to monetize any PRV that the FDA may grant alongside Zorblisa's approval.
Amicus will give Scioderm and its investors $125m in cash and $104m in stock up front plus up to $361m in cash or stock based on certain clinical and regulatory milestones and up to $257m in cash and stock for commercial milestones. The deal also promises the lesser of $100m or 50% of the price Amicus earns from the sale of a PRV.
Longer-Term Goals
But Crowley said Amicus will acquire Scioderm in a deal closing during the third quarter of 2015 because the company and its product fit five business development criteria set by the Amicus board of directors. Zorblisa targets not only 1) a rare disease, but also 2) an especially devastating disorder with a 3) first-in-class and possibly best-in-class drug that provides 4) a meaningful clinical benefit in a 5) significant rare disease patient population.
"We are in the process of building what we hope will become one of the greatest companies in the world focused on rare diseases," Crowley said, noting that Zorblisa should contribute meaningfully to that goal.
As a member of Scioderm's board of directors for two years, during a time when Amicus was sharpening its focus, Crowley said he watched the company's EB program evolve and eventually was able to talk to Scioderm about Amicus's ability to advance Zorblisa faster through the ongoing Phase III trial.
Crowley noted during an Aug. 31 conference call to discuss the deal that the transaction was not a competitive process. Amicus negotiated exclusively with Scioderm before finalizing a deal with the two-year-old company on Aug. 30.
Scioderm's drug will move quickly from Phase III to FDA review, because of the breakthrough therapy designation and because the company already has the FDA's permission to submit a rolling new drug application (NDA).
Amicus expects to kick off the rolling NDA with the filing of preclinical data in the fourth quarter of 2015 followed soon after by the submission of manufacturing plans for Zorblisa. The NDA submission will be completed during the second half of 2016, including the final clinical data following the release of Phase III results in the first half of next year.
The timeline for approval is the same in the EU, where the European Medicines Agency (EMA) granted a pediatric investigation plan (PIP) for Zorblisa. The PIP gives the drug's owner a 12-year period of exclusivity before generic competition is allowed into the market.
Crowley said the infrastructure to support Zorblisa commercially will be the same commercial, medical affairs, patient advocacy and other infrastructure that Amicus is putting in place to support Galafold (migalastat) for Fabry Disease and ATB200 for Pompe disease.
However, like Galafold for Fabry disease, Zorblisa will have its own sales force with a few dozen representatives in the US and in the EU marketing the drug to EB physicians, 80% of whom are dermatology specialists at academic centers.
Galafold is under accelerated review by the EMA and will be submitted for FDA review during the second half of 2015 with EU and US approvals expected in 2016.
ATB200 will be given to the first human patients in a Phase I/II clinical trial that will begin this year and Amicus expects to begin a Phase III trial in 2016.