Biocompatibles International (AIM: BII) and AstraZeneca (LSE: AZN) have announced that they will initiate clinical trials for their jointly developed type II anti-diabetes drug CM3 in January after the pre-clinical phase of the programme was completed ahead of schedule.
The agreement to develop the drug, which was signed by the two companies in December last year, included pre-clinical, phase I and phase IIa activities managed by Biocompatibles’ subsidiary CellMed, also providing AstraZeneca with an exclusive option to license relevant patents for further exploitation during the course of the development programme, currently slated for completion in 2012.
Phase I studies are scheduled to start in 2010, while Phase II studies will likely start later in the year.
“The first generation GLP-1s have established the drug class in treating type II diabetes but have also shown some limitations. We see CM3 as a second generation GLP-1, which has the potential to overcome these limitations. The pre-clinical results confirm that this is a realistic vision. They show that we have options for dosing and alternative routes of delivery,” said Chief Executive of Biocompatibles Crispin Simon.
AstraZeneca will pay a further €4.3 million instalment in January. The total scheduled payments make for a total of €8.8 million. Once the option to license is exercised, AstraZeneca will pay a license fee of €25 million and assume financial and management responsibility for the programme. Further milestones of €37.5 million would be payable before the product goes on sale.
Following the launch, royalties in the single to mid-teens digit range would apply, the rate depending on the level of sales achieved. In addition there is provision for sales-related milestones up to a maximum value of €256 million.
Biocompatibles said last month that its full year revenues would be closer to the upper end of the guidance after Q3 sales beat expectations. The company’s net funds are now expected to top the projected £28 million at the end of the year.