Kidney drug developer Rockwell Medical ($RMTI) picked up a big co-sign from a leader in the space, signing a deal with Baxter International ($BAX) that will help pay the way for its late-stage iron-delivery treatment.
Under the agreement, Baxter will become the sole distributor of Rockwell's hemodialysis concentrate products for 10 years in exchange for $20 million in cash, a $15 million investment in the company and another $10 million in potential milestone payments. Baxter also has the option to extend the deal beyond its first decade in exchange for another $7.5 million, the companies said.
For Rockwell, the idea is to simultaneously speed up its concentrate business by hitching onto a major player and bankroll its efforts to build a pipeline of proprietary drugs. The Wixom, MI, biotech's shares jumped as much as 17% on the news Friday morning.
Meanwhile, the company is awaiting the FDA's word on Triferic, a drug designed to noninvasively deliver iron to the bone marrow of dialysis patients. In its Phase III trials, Rockwell's treatment met all its endpoints by boosting hemoglobin and serum iron in chronic kidney disease sufferers undergoing dialysis, and the agency is due to hand down a final decision by Jan. 24.
If and when Triferic wins approval, Rockwell plans to launch the product on its own, tapping its in-house manufacturing and sales infrastructure. The deal with Baxter doesn't touch Rockwell's lead candidate, but it could serve as a prelude to a deeper alliance between the similarly focused companies as Triferic progresses.
"This long-term, strategic supply and distribution agreement enables Rockwell to expand and accelerate our hemodialysis concentrate business, while we continue to strategically build our drug pharma business in the U.S. and globally," Rockwell CEO Robert Chioini said in a statement.
As for Baxter, on the verge of spinning out its biopharma operation into a new entity called Baxalta, the Rockwell agreement is a move to strengthen the old brand. The company is keeping its sizable renal business under the Baxter name, consolidating a multibillion-dollar segment bolstered by last year's $4 billion acquisition of former rival Gambro.
- read the statement