Acrux enters US$13m development deal

Acrux subsidiary FemPharm has secured a US$13.3 million deal with Californian company Vivus to develop and commercialise its transdermal spray for female sexual dysfunction and menopause.

The terms of the deal include licensing fees of US$3 million to be paid over 17 months, payments for achievement of clinical development and NDA (the US Food and Drug Administration's new drug application) filing milestones of up to US$4.3 million, product approval milestones of US$6 million, as well as royalties on net sales of products once they have been commercialised.

"It's in the class of big Australian deals," said Acrux CEO Dr Igor Gonda.

Gonda said the licence gave Vivus exclusive rights to develop and commercialise the products for the US market, leaving the door open for further deals covering other markets to be done at a later stage and at a better price.

FemPharm has developed two products using the Acrux metered dose transdermal spray (MDTS) technology, testosterone MDTS to treat low libido in women associated with low testosterone levels, and estradiol MDTS as a low dose estradiol-only hormone replacement therapy (HRT).

Vivus will be responsible for all future development, manufacturing and commercialisation activities for the two products with the exception of completing the ongoing Phase II clinical trial for testosterone MDTS in Australia, which is expected to yield results in early 2005.

Phase I and II studies have already been completed for the estradiol MDTS and the company has discussed the Phase III trial design with the FDA. Vivus expects to file an NDA for this product in 2006.

Gonda said there were good prospects for both products, with the testosterone spray meeting a major unmet medical need. The market for that product is expected to be in the vicinity of US$0.6 billion to $2.5 billion, and Vivus expects to be the second to market, behind Proctor & Gamble's testosterone patch, he said.

"We're obviously very excited about this. Number one, Vivus is the right kind of partner -- they're totally committed to this. And we're very excited that the testosterone product will be the second to market with what we think is a better product," Gonda said.

The estradiol MDTS is targeted at the $1.5 billion HRT market, and Gonda said the two companies believed it would be well positioned to capture some of the market away from oral and patch-delivered therapy. The transdermal application, he said, avoided the metabolic problems associated with oral HRT, and was available at a lower and patient-titratable dose. "We think it's a great product for women and a great product for Acrux," he said.

Gonda said the San Francisco-based, biotech-focussed merchant bank Burrill and Co was "instrumental" in helping to put together Acrux's deal with Vivus.