–DiaPep277®, a First-in-Class Immune Intervention Therapy in Phase 3 Testing for New Onset Type 1 Diabetes–
BRISBANE, Calif., April 24, 2014 (GLOBE NEWSWIRE) — Hyperion Therapeutics announced today that it has entered into a definitive agreement under which it will acquire Andromeda Biotech Ltd., an Israel-based subsidiary of Clal Biotechnology Industries Ltd. (tase:CBI). Andromeda is focused on the development of DiaPep277®, a first-in-class immune intervention therapy for new onset Type 1 diabetes, an orphan indication with approximately 35,000 adults diagnosed annually across the U.S. and Europe. DiaPep277 is currently being evaluated in a confirmatory Phase 3 clinical study in adult patients with new onset Type 1 diabetes. The Phase 3 study is fully enrolled and results are anticipated in the first quarter of 2015.
In its first Phase 3 study, a randomized, double-blind, placebo-controlled, multinational trial, DiaPep277 demonstrated a significant reduction in beta cell loss as reflected by preservation of glucagon-stimulated C-peptide secretion relative to placebo. In addition, a significantly higher proportion of patients treated with DiaPep277 maintained target levels of glycated hemoglobin (HbA1c, a measure of metabolic control) and had a lower rate of hypoglycemic events versus placebo. Similar results in the ongoing confirmatory Phase 3 study could position DiaPep277 as the first disease-modifying therapy approved for Type 1 diabetes.
“The acquisition of Andromeda Biotech is a transformative event for Hyperion,” said Donald J. Santel, president and chief executive officer of Hyperion. “We believe DiaPep277 has the potential to become a highly differentiated, first-in-class medicine for an orphan indication with a significant unmet need. With the successful commercialization of RAVICTI® well under way, DiaPep277 adds an attractive late-stage asset to our portfolio, while we continue development of glycerol phenylbutyrate for hepatic encephalopathy.”
At the closing of the transaction, Hyperion will pay $12.5 million in cash, less adjustments for expenses incurred in connection with the transaction, and 312,869 shares of Hyperion common stock (valued at approximately $7.85 million based on the average closing price of $25.09 per share for the 15 consecutive trading days ending April 17, 2014). Hyperion will potentially make contingent payments to Andromeda security holders, as follows:
• potential global regulatory and approval milestones payments that total $120 million, the first of which would not be made until acceptance of the first marketing application filing for review in either the U.S. or Europe, whichever occurs first;
• up to $430 million in commercial milestones, the first of which would be due upon achievement of annual worldwide net sales of $450 million; and
• tiered contingent sales payments ranging from 10% on annual worldwide net sales up to $300 million to 17% for annual worldwide net sales that exceed $1.2 billion, with the exception of sales by distributors in certain territories, for which the rate is 25%.
As a result of the transaction, Andromeda will become a wholly owned subsidiary of Hyperion. The transaction has been approved by the Boards of Directors of both companies and is expected to close this quarter, subject to customary closing conditions. The agreement may be terminated by either company upon the occurrence of certain events, including if the transaction has not closed by June 15, 2014. Upon closing, Hyperion’s headcount is expected to increase by 10 employees with the addition of the Andromeda team.
“Our team is excited to combine our deep knowledge of DiaPep277 with Hyperion’s expertise in developing and commercializing orphan therapies to address significant medical needs,” said Shlomo Dagan, Ph.D., chief executive officer of Andromeda Biotech. “If the second Phase 3 study is positive, DiaPep277 could play an important role in immune intervention of Type 1 diabetes, as patients who have even modest preservation of pancreatic beta cell activity could achieve better control of their blood sugar and a reduced risk of long-term diabetes complications.”