Small cap biotech Durect Corporation has signed a $20 million upfront deal, with biobucks down the line, with Novartis for the biotech’s troubled late-stage asset that has seen a series of setbacks and name changes in recent years.
The deal, which could be worth nearly $300 million all told, is centered on Posimir (Saber-bupivacaine), a phase 3 candidate using a new formulation of the anaesthetic bupivacaine, which is designed to give up to three days of continuous pain relief after surgery.
The biotech hopes that the drug will prove more attractive to regulators and doctors as both aim to cut back on the use of potentially addictive opioid meds.
The deal with Novartis’ generics and biosimilar unit Sandoz will see the Big Pharma help develop and sell the med in the U.S., should it gain approval. Durect will keep its responsibility for finishing off the ongoing Persist phase 3 trial for the med, as well as FDA talks through to a potential approval.
This late-stage test is focused on patients undergoing a gall bladder removal, comparing the effects of Posimir to bupivacaine.
But the med has not had the easiest time of it, and just over a year ago the FDA told the Cupertino, CA-based biotech that it must make a number of amendments to that very Persist trial, which included adding bupivacaine as an active control.
The company had long been on the look-out for potential partners for the drug, and its tie-up with Sandoz will be a welcome boost as it comes after a series of disappointments for the med, and a falling share price.
In 2014, the U.S. regulator told the biotech that investigators didn’t provide sufficient data to prove that it could be safely administered and would need additional safety studies. And this came two years after the program failed an efficacy test in a late-stage study.
And it looks as if it has worked, as Durect will now look to tap into the experience and scale of Sandoz U.S. and its hospital sales and marketing organization; experience and reach that “will be employed to deliver Posimir to the market,” according to a statement.
Under the terms of the agreement, Sandoz makes an upfront payment of $20 million, with the potential for up to an additional $43 million in development and regulatory milestones. On top of this, around $230 million in extra biobucks could also be coming the biotech’s way, should the drug gain approval and make strong sales.
The money will be welcomed, given that the FDA changes to Persist had added more cost and time to completing the test.
Durect’s med works as an extended-release depot, using its Saber tech to continuously deliver bupivacaine to the surgical site for 72 hours.
The biotech had at end of play Friday a market cap of $112 million, with its shares worth just 80 cents. Two years ago, the company was worth just over $2 a share, but has been on a downward trajectory since then. Its shares jumped 31% premarket however on the news this morning, bringing into the $1 a share region.