Protherics signs CytoFab deal with AstraZeneca worth potentially £195 million

By Ted A. Knutson

Washington, Dec. 8 - Protherics announced an agreement Thursday with AstraZeneca worth potentially £195 million for AstraZeneca's development and global commercialization of Protherics' anti-sepsis product CytoFab.

Under the agreement, AstraZeneca will undertake all clinical development work for CytoFab and Protherics will be primarily responsible for bulk drug manufacturing, including the supply of clinical trial material.

AstraZeneca will be responsible for developing CytoFab, an anti-TNF-alpha polyclonal antibody fragment (Fab) product, as a treatment for TNF-alpha mediated diseases in individuals with an initial target indication of severe sepsis.

Sepsis is a life-threatening condition resulting from uncontrolled severe infections that affects an estimated 3 million people a year worldwide. About one third of patients with severe sepsis die from major organ failure. Patients typically require mechanical ventilation and intensive care.

Protherics demonstrated in a phase 2b study that CytoFab caused a marked reduction in TNF-alpha in the blood and lung tissues of patients with severe sepsis, and that patients required on average five days less mechanical ventilation than when treated with placebo.

In addition, CytoFab showed an encouraging trend suggesting a survival benefit compared to placebo and a favorable side-effect profile.

CytoFab is being prepared for a single phase 3 registration study in severe sepsis in line with guidance received at an end of phase 2 meeting with the Food and Drug Administration.

The agreement will become effective upon the expiration of the Hart-Scott-Rodino waiting period, which is anticipated early in 2006.

The agreement has a potential total deal value, excluding royalties, of about £195 million to Protherics, including an initial payment of £16.3 million.

In addition, AstraZeneca will make a £7.5 million equity investment in Protherics to be paid in cash, at 68.24p per share, being a 30% premium to the average middle market closing price of Protherics shares over the three months prior to the date of the agreement.

AstraZeneca will own about 4.3% of Protherics' enlarged share capital.

Protherics will receive additional payments worth up to £171 million payable upon the achievement of milestones. There are no milestone payments related to sales performance.

Protherics will also receive royalties on global product sales of 20% of net sales, which reflect the late stage development status and market potential of the drug.

Additionally, Protherics will get payments in return for the commercial supply of the product and will invest to expand its manufacturing capacity accordingly.

AstraZeneca plans to start the pivotal phase 3 study for CytoFab in the United States and European Union in 2007 following completion of improvements to the current manufacturing process.

London-based Protherics is a biopharmaceutical company focused on critical care and oncology. London-based AstraZeneca is a pharmaceutical giant.

The announcement was made in a 6-K filing with the Securities and Exchange Commission.

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