Baxalta bets again on Kamada with lung transplant deal

Kamada CEO David Tsur

Baxalta, the soon-to-spin-out pharma arm of Baxter ($BAX), has expanded its relationship with Israel's Kamada ($KMDA), agreeing to co-fund a trial testing whether the company's top prospect can prevent lung transplant rejections.

Under the deal, the pair will launch a Phase I/II trial in Israel next year, building off of some positive proof-of-concept results disclosed last year. Kamada's drug is a purified form of alpha-1 antitrypsin, or AAT, which is a naturally occurring protein that protects bodily tissues from inflammatory enzymes. Without it, patients can develop emphysema and other pulmonary disorders, according to the company.

Kamada won approval in 2010 with an intravenous formulation of the protein, marketed as Glassia for rare cases of AAT deficiency, and Baxter stepped in months later with a deal worth up to $180 million, picking up commercial rights to the drug in the US, Canada, Australia and New Zealand.

Since then, the partners have launched collaborative studies testing whether injecting AAT can help treat Type 1 diabetes and graft-versus-host disease. And the pair's latest endeavor "underscores the growing strength of the Baxalta-Kamada relationship," Kamada CEO David Tsur said in a statement.

"The lungs have the highest rate of rejection among transplanted solid organs," Tsur said. "Approximately one-third of lung transplant recipients experience an episode of acute rejection within the first year, and 50% of lung transplant recipients will develop chronic rejection within the first 5 years. Our aim is to develop AAT as a protective, immunomodulation therapy that would enhance patients' acceptance of their new lungs in this life-saving transplant."

Kamada's efforts to press forward with other formulations of AAT haven't gone quite so well. The biotech's inhalable version of the treatment missed its goals in a late-stage trial last year, failing to improve symptoms of AAT deficiency compared with placebo. But the company is planning to press ahead with European regulatory applications anyway, working with partner Chiesi Farmaceutici.

Meanwhile, Baxter remains on track to split in two in the coming weeks, keeping its sizable hemodialysis business under the old name while spinning out its biopharma segment into the independent Baxalta. The new company is preparing to settle into a 200,000-square-foot space in Cambridge, MA's Kendall Square, a biotech hub home to scores of drug developers and neighboring the likes of MIT and Harvard. The idea, in part, is to cozy up to local innovators in hopes of igniting new partnerships, future CEO Ludwig Hantson has said, as the company looks to expand beyond its core competency in hematology.

- read the statement