Acucela Strikes Deal With Otsuka Pharmaceutical to Develop Drug for Eye Disease

Acucela has struck another big deal with its Japanese connections. The Bothell, WA-based biotech company said today it has agreed to form a partnership with Tokyo-based Otsuka Pharmaceutical to develop its lead drug candidate for the top cause of blindness among the elderly—the “dry” form of macular degeneration.

The deal has sweet terms for Acucela. It will receive $5 million in upfront cash and milestone payments worth $258 million from Otsuka if the drug, ACU-4429, reaches certain goals in drug development. Otsuka has agreed to pay all the drug development bills through the beginning of Phase III clinical trials, and then it will split the future expenses for development equally. The companies will also equally divide the expenses and profits from sales of the drug in North America, while Acucela keeps all rights in Europe and Otsuka gets exclusive rights in Asia and the rest of the world.

The partnership is a coup for Ryo Kubota, a native of Japan and a former University of Washington ophthalmologist who left to start Acucela in 2002. It brings a new level of resources from a company with $9.2 billion in annual revenue last year, and experience marketing big products like Abilify, a $2 billion-a-year drug for schizophrenia and bipolar disorder. The deal also could provide a lift for patients with the “dry” form of macular degeneration, a gradual loss of vision caused by yellowish buildups and a loss of pigment in the retina. The dry form of the condition has no approved treatment, and damages the eyesight of more than 20 million people worldwide. That number is expected to double in the next 20 years, as populations age around the world.

“Otsuka and Acucela have a similar vision and commitment in development of opthalmic drugs,” Kubota said in an email from Japan. “Otsuka has a strong and successful history of marketing opthalmic drugs in Japan and now they are expanding their opthalmology franchise globally. Having a common vision is critical for the success of a long-term collaboration.”

Acucela’s experimental drug is meant to be taken as an oral pill. It’s unlike other treatments for the “wet” form of macular degeneration in which leaky blood vessels damage eyesight. That form of the disease is treated with Genentech’s Lucentis and Avastin, drugs that block the growth of abnormal blood vessels, yet need to be given with injections behind the eye.

The Acucela approach has been shown in animals to stop the natural accumulation of A2E, a molecule that’s toxic to retinal cells and believed to play a role in age-related vision loss. The first patient in a clinical trial received the drug in June, the company said. The trial is expected to enroll 36 patients on the drug or a placebo, on a single dose.

Acucela plans to finish the early-stage trial “as soon as possible” so it can move on to a proof-of-concept Phase II study in 2009, Kubota said in an email from Japan. Acucela currently has about 30 employees in Bothell, and plans to add some new hires in clinical development, although “we will continue to operate as efficiently as possible,” Kubota says.

Acucela (ack-you-cell-uh) made its first big splash on the Seattle biotech scene back in 2004, when it raised $13.4 million in a first-round financing from a group of 10 investment firms from Japan and Singapore, including Softbank. It raised an additional $25 million in April 2007 from another Japanese-led investment group, which included Otsuka. The new partnership enables the company to advance toward the marketplace without having to raise more capital in the forseeable future, Kubota says.

Besides the macular degeneration deal, Acucela also found a way to negotiate for a piece of another drug further along in Otsuka’s pipeline. The two companies will collaborate on the final stage of development for Rebamipide, an experimental drug Otsuka is developing for dry eye. Acucela will be responsible for the regulatory strategy to win approval of that drug from the FDA, while Otsuka will continue to pay all development costs, and expenses for future commercialization. Acucela will get a cash payment upfront, milestone payments on success in development, and royalties on sales, all of which were undisclosed. Once the drug is approved, Acucela may be able to negotiate terms to co-promote the product in the U.S.

Acucela was advised in both transactions by Posada & Associates, and its legal counsel was Wilson, Sonsini, Goodrich and Rosati.

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One response to “Acucela Strikes Deal With Otsuka Pharmaceutical to Develop Drug for Eye Disease”

  1. Ronald says:

    Yes, the turnover of drugs is increasing year by year. Abilify is no exception. The main thing that helped medicine to health.