Concert Pharmceuticals Inks Up To $1B Deal With Glaxo

LONDON -Pharmaceutical firm Concert Pharmaceuticals Inc. Tuesday said it inked a research deal potentially worth up to $1 billion with GlaxoSmithKline PLC (GSK.LN) to develop drugs which use deuterium, a chemical that could improve how some medicines work.

Lexington, Massachusetts-based Concert said GlaxoSmithKline will make a $16.7 million equity investment as part of a $35 million payment to fund research, which will focus around six experimental drugs in the early stages of development.

Including future payments for meeting development milestones and royalties from sales on any drugs that make it to market, the collaboration could be worth as much as $1 billion to Concert, the company said.

The deal covers three of Concert's compounds and three GlaxoSmithKline drugs.

Roger Tung, Concert Chief Executive, told Dow Jones Newswires Concert's compounds are an experimental treatment for HIV called CTP-518, one for renal disease and a third, which the two companies haven't decided on yet.

Concert's pipeline includes treatments for conditions like hypertension, hepatitis and pain, he said.

GlaxoSmithKline has asked Concert to modify three undisclosed drugs in its pipeline with deuterium, which Glaxo will develop itself, Concert said.

Brentford, England-based GlaxoSmithKline has the option to take a worldwide license for any of the compounds.

Concert is focused on using deuterium chemistry to create new drugs. An isotope of hydrogen, deuterium could improve a drug's metabolic properties and enhance its effectiveness.

Tung said deuterium is heavier than hydrogen, so it makes stronger bonds with other elements, like carbon. That means drugs incorporating it can take longer to break down in the body.

"We can tune the effect of deuterium to favorably change the properties of a drug," said Tung.

Concert Pharmaceuticals and GlaxoSmithKline Form Alliance to Develop Novel Deuterium Modified Drugs

Concert Pharmaceuticals and GlaxoSmithKline (NYSE: GSK) announced today that they will collaborate to develop and commercialize deuterium-containing medicines. The deal includes three of Concert’s research and development programs; namely, CTP-518, a protease inhibitor for the treatment of HIV expected to enter Phase I clinical trials in the second half of 2009, a preclinical compound for chronic renal disease, and a third research product in Concert’s pipeline. Concert will also provide GSK with deuterium-modified versions of three GSK pipeline compounds for GSK to develop.

Under the terms of the agreement, Concert will receive $35 million in upfront payments, including a $16.7 million equity investment by GSK. Concert is eligible to receive milestones and tiered, double-digit royalties based on deuterium-containing products arising from the Concert pipeline programs. In addition, Concert is eligible to receive milestones as well as royalties on the sales of deuterium-containing products arising from the GSK pipeline compounds. Overall, Concert has the potential to receive in excess of $1 billion in total milestone and upfront payments from GSK spread across all programs.

For each Concert pipeline program, Concert will have responsibility for research and development activities through completion of pre-agreed clinical trials. After the completion of such clinical trials for each program, or earlier if it chooses, GSK may elect to obtain an exclusive, worldwide license to product candidates within the program. At such time, GSK will assume responsibility for development and commercialization. Concert will retain full rights to further develop and commercialize its product candidates in any program GSK chooses not to license.

"This agreement marks GSK’s continued efforts to access the best science and technology platforms worldwide,” said Patrick Vallance, Senior Vice-President Drug Discovery, GSK. "We believe Concert’s approach to deuterium modification of medicines has broad potential to enhance certain drug properties and result in innovative new medicines.”

"We are pleased to collaborate with GSK and to advance innovative small molecule drug candidates using our deuterium chemistry approach,” said Roger Tung, Ph.D., President and Chief Executive Officer of Concert Pharmaceuticals. "This collaboration is a major step forward in our strategy to advance a broad pipeline of novel deuterium-modified therapeutics.”

About CTP-518

CTP-518 is a novel HIV protease inhibitor developed from Concert’s deuterium chemistry platform by replacing certain key hydrogen atoms of atazanavir with deuterium. Concert has demonstrated in pre-clinical studies that selective deuterium modification of atazanavir fully retains its antiviral potency but can markedly slow hepatic metabolism, thereby increasing half life and plasma trough levels. As a result, CTP-518 could potentially avoid the need to use a protease inhibitor boosting agent such as ritonavir. Current standard of care is to co-administer HIV protease inhibitors with ritonavir. However, significant complications are associated with ritonavir. Importantly, because the relationship between atazanavir trough plasma levels and clinical virological response is well-established, Phase 1 testing is expected to provide clinical validation of CTP-518. CTP-518 has the potential to be the first HIV protease inhibitor to eliminate the need to co-dose with a boosting agent.