Acucela Strikes Deal With Otsuka Pharmaceutical to Develop Drug for Eye Disease

9/4/08Follow @xconomy

Acucela has struck another big deal with its Japanese connections. The Bothell, WA-based biotech company said today it has agreed to form a partnership with Tokyo-based Otsuka Pharmaceutical to develop its lead drug candidate for the top cause of blindness among the elderly—the “dry” form of macular degeneration.

The deal has sweet terms for Acucela. It will receive $5 million in upfront cash and milestone payments worth $258 million from Otsuka if the drug, ACU-4429, reaches certain goals in drug development. Otsuka has agreed to pay all the drug development bills through the beginning of Phase III clinical trials, and then it will split the future expenses for development equally. The companies will also equally divide the expenses and profits from sales of the drug in North America, while Acucela keeps all rights in Europe and Otsuka gets exclusive rights in Asia and the rest of the world.

The partnership is a coup for Ryo Kubota, a native of Japan and a former University of Washington ophthalmologist who left to start Acucela in 2002. It brings a new level of resources from a company with $9.2 billion in annual revenue last year, and experience marketing big products like Abilify, a $2 billion-a-year drug for schizophrenia and bipolar disorder. The deal also could provide a lift for patients with the “dry” form of macular degeneration, a gradual loss of vision caused by yellowish buildups and a loss of pigment in the retina. The dry form of the condition has no approved treatment, and damages the eyesight of more than 20 million people worldwide. That number is expected to double in the next 20 years, as populations age around the world.

“Otsuka and Acucela have a similar vision and commitment in development of opthalmic drugs,” Kubota said in an email from Japan. “Otsuka has a strong and successful history of marketing opthalmic drugs in Japan and now they are expanding their opthalmology franchise globally. Having a common vision is critical for the success of a long-term collaboration.”

Acucela’s experimental drug is meant to be taken as an oral pill. It’s unlike other treatments for the “wet” form of macular degeneration in which leaky blood vessels damage eyesight. That form of the disease is treated with Genentech’s Lucentis and Avastin, drugs that block the growth of abnormal blood vessels, yet need to be given with injections behind the eye. … Next Page »

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