Ortho-McNeil inks twin diabetes pacts totaling $1B

Johnson & Johnson subsidiary Ortho-McNeil-Janssen Pharmaceuticals has nailed down commercialization rights to Diamyd Medical's late-stage Type 1 diabetes vaccine. OMJ and Sweden's Diamyd will share development costs on the therapy, now in a late-stage trial, with the pharma company paying $45 million upfront and promising up to $580 million in milestones for the development deal.

Once the initial round of Phase III data arrives in the first half of next year, OMJ has the right to take over full control of the remaining trial work. Diamyd is hanging on to the commercialization rights in the Nordic countries.

"This agreement will allow Diamyd to expand and become a significant player as a specialty pharma company in the Nordic region, but most importantly it should make this transformational beta cell preserving therapy available to patients around the world," says CEO Elisabeth Lindner.

Diamyd's GAD65 antigen-based therapy is designed to prevent the autoimmune assault on beta cells, preventing the damage that causes Type 1 diabetes. A Phase II study of 70 children and adolescents with Type 1 diabetes demonstrated that the therapy significantly slowed the progression of the disease in newly-diagnosed subjects.

Hayward, CA-based Metabolex, meanwhile, signed on to a discovery deal with OMJ covering  the rights to several preclinical Type 2 diabetes programs. Metabolex gets an upfront and milestones that could total $330 million along with royalties on any approved drugs.

- see the release on the Diamyd deal
- check out the Metabolex release