BIOGUIDE BRIEF: HERE’S TO ACRUX, ITS INVESTORS & AUSSIE BIOTECH
March 23rd 2010 11:48
Tuesday March 16, 2010
Daily news on ASX-listed biotechnology companies
* ASX UP, BIOTECH DOWN: LIVING CELL UP 33%; USCOM DOWN 13%
* ELI LILLY’S $773m FOR ACRUX’S AXIRON TESTOSTERONE TREATMENT
* BIOGUIDE BRIEF: HERE’S TO ACRUX, ITS INVESTORS & AUSSIE BIOTECH
* CATHRX REVIEW MOOTS CAPITAL RAISING
* FLUOROTECHNICS FIRST SWISS SALE
* OBJ APPOINTS DR KEVIN HAMMOND PARTNERING MANAGER
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MARC SINATRA’S BIOGUIDE BRIEF: ACRUX
Finally, after the Progen saga, Avexa’s phase III apricitabine results, the FDA’s analysis of Chemgenex’s Omapro data, Novogen pulling its phase III trial of phenoxodial, CBio’s disastrous float and a raft of other news that isn’t at the front of my mind right now, I finally get to look to at something that is positive for biotech.
Today, Acrux announced a deal with Eli Lilly for Axiron, a treatment for men’s testosterone insufficiency, with a headline value of $US335 million.
The deal includes a $US50 million upfront fee, $US3 million on transfer of manufacturing assets, $US87 million on marketing clearance and up to $US195 million in further milestone payments.
On top of that, as usual, there will be royalties payable to Acrux on Axiron sales. The royalty rate is confidential, but expect something in the neighborhood of 10-15 percent of sales.
For Australian biotech, the best part of the deal is that it eclipses Cytopia’s 2006 JAK3 deal with Novartis which had a headline value of $US214.5 million, but only a $US9.5 million upfront fee, given its much earlier stage and, consequently, higher risk.
The best part of the deal for Acrux shareholders is that having completed phase III trials, the Axiron project is low risk, as far as biotechnology is concerned and that the milestone and royalty payments that were largely pie-in-the sky in the Cytopia deal, are highly likely to be received in Acrux’s deal.
Acrux’s technology is solid, the successful use of testosterone to treat male testosterone insufficiency well-supported in the literature and market, not surprisingly. Axiron clinical trial results have been excellent and the method of application it employs clearly superior to the current crop of very messy and transference-prone products on the market.
This is an excellent day for Acrux, its shareholders and Australian biotechnology.
Now, if only Chemgenex can get a positive recommendation from the FDA’s oncologic drugs advisory committee, which is due to discuss Chemgenex’s Omapro data on March 22, we could be in for some very good times.
The biotechnology window may open, again, and we will all be thankful for that.
Marc Sinatra
Analyst
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