GSK and Nabi in deal for NicVAX, with upfront and potential payments of over $500 million

GlaxoSmithKline Biologicals SA, a unit of UK drugs giant GlaxoSmithKline, has entered an exclusive worldwide option and licensing agreement for Nabi Biopharmaceuticals' NicVAX, an investigational vaccine for the treatment of nicotine addiction and the prevention of smoking relapse, as well as for the development of a second generation nicotine vaccine.

Under the terms of the deal, which is expected to complete in the first quarter of 2010, GSK will pay to Nabi an upfront non-refundable fee of $40 million at closing and will receive an option to exclusively in-license NicVAX on a worldwide basis and to develop follow-on next-generation nicotine vaccines using Nabi's intellectual property. Together with the upfront payment, Nabi is eligible to receive over $500 million in option fees and regulatory, development and sales milestones for NicVAX and follow-on nicotine vaccines. Nabi will also receive double-digit royalties on global sales of NicVAX should GSK exercise its option as well as royalties on global sales of next generation nicotine vaccines.

The news saw Nabi's share price to leap 26.4% to $4.50, on the USA's Nasdaq, while GSK remained flat in a London market that rose 1.6% in November 16 trading.

Agent in Phase III testing

NicVAX has recently entered the first of two Phase III clinical trials. Nabi will be responsible at its cost for the Phase III development of this candidate vaccine. Upon successful completion of the Phase III studies, if GSK exercises its option, the UK firm will take responsibility for further development and commercialization of the product. In parallel with the Phase III studies, and independent of whether it exercises its option to in-license NicVAX, GSK will be developing a next-generation nicotine vaccine based on Nabi's intellectual property together with GSK's own technology.

"If approved, this smoking cessation vaccine technology could be a novel solution to help the millions of smokers who want to stop smoking and remain abstinent; a habit that is well documented to be very hard to stop permanently," said Jean Stephenne, President of GSK Biologicals. "This technology builds our capability in the therapeutic uses of vaccines and is a great addition to our smoking cessation portfolio," he added.

The vaccine is designed to stimulate the immune system to produce antibodies that bind to nicotine. A nicotine molecule attached to an antibody is too large to cross the blood-brain barrier. Therefore, NicVAX blocks nicotine from reaching its receptors in the brain and prevents the highly-addictive pleasure sensation experienced by smokers and users of nicotine products.

Preclinical and clinical data show that NicVAX' ability to block nicotine from reaching the brain could help people quit smoking. Because the body's immune system can be boosted to produce long-lasting antibodies, Nabi believes the candidate vaccine could also be effective in preventing smoking relapse. Relapse is a significant challenge facing smokers. Currently available smoking cessation therapies have relapse rates that can be as high as 90% in the first year after a smoker quits.

Entering a $2 billion US market

Commenting on the news, US firm BioSante Pharmaceuticals, which develops products for female sexual health, including LibiGel for the treatment of hypoactive sexual desire disorder (HSDD), said it applauds the efforts of Boehringer Ingelheim to develop a therapy to treat this unmet medical need. President and chief executive Stephen Simes said: 'Boehringer Ingelheim's commitment to HSDD validates the potential size of the market which could exceed $2 billion a year in US sales. BioSante intends to submit a new drug application for LibiGel to the FDA [Food and Drug Administration] in the first half of 2011 for potential approval by the end of that year. In addition, Phase II studies in pre-menopausal women are ongoing for a potential future indication.'

Earlier this year, the FDA ordered additional warnings on GSK's Zyban (bupropion HCl) and Pizer's Champix (varenicline) prescription smoking cessation drugs after concerns that they triggered suicidal feelings. The agency has previously refused to authorize Sanofi-Aventis's rimonabant, a weight loss product with potential for smoking cessation. Companies with less advanced nicotine addiction vaccines in development include Cytos, Celtic Pharma and Independent Pharmaceutica, noted a report in the UK's Financial Times