Peptor's president and CEO Dr. Yoram Carmon, said that Aventis will be financing the drug's clinical development up to its commercial launch. Meanwhile, milestone-bound payments from the Swiss-based multinational, will help Peptor set up manufacturing facilities in Israel over the coming three years.
The agreement further stipulates that Peptor will remain the sole manufacturer of the drug for Aventis, which will have the exclusive right to sell and distribute it.
Peptor has conducted Phase II studies for type 1 diabetes in Europe and Israel and recently started Phase II studies for latent autoimmune diabetes in adults (LADA) the United States and Europe.
Type 1 diabetes is a condition in which the immune system attacks and destroys the beta cells in the pancreas which produce insulin, a hormone that controls blood sugar levels. It typically is found in childhood and genberally is considered as rare.
LADA is a slowly progressing form of type 1 diabetes and is much more common. It is characterized by the similar immune based destruction of insulin-producing cells in the pancreas, which eventually leaves the patient insulin-dependent for life.
Lehman Brothers said DiaPep277 could be useful in around 10 percent of the diabetes population and was a positive addition to the Aventis diabetes franchise.
Under the deal, Peptor will be responsible for scaling up production of the product and will receive milestone payments as the drug advances through development. The companies declined to disclose financial details of the deal. However it is rumored that Peptor will be receiving an initial payment of $15 million.
The agreement marks another step by Aventis, the world's fifth biggest pharmaceutical firm, to boost its new drug pipeline, which analysts consider lightweight with no obvious big winners.
Peptor, which Carmon established in 1993, has raised $65 million since its establishment. In its last financing round, in November 1999, it secured $15 million according to a post-money company value of $70 million. Its shareholders include Johnson and Johnson (NYSE:JNJ) and Teva Pharmaceuticals (Nasdaq:TEVA). Peptor employs 50 people at facilities in Rehovot, Israel and in Erkrath, Germany.
Aventis Boosts Diabetes Drug
Drugmaker Aventis (Paris:AVEP.PA) boosted its position in the diabetes market by signing an agreement with Peptor Ltd. giving it exclusive rights to the private Israeli firm's new diabetes drug.
Aventis will be responsible for further clinical development of the drug, named DiaPep277, and its commercialization. DiaPep277 will add to Aventis's portfolio of diabetes medications which include its already-marketed Lantus, as well as Exubera and the drug 1964, which are all still under development.