Hyperion Therapeutics (Nasdaq:HPTX) announced today that it acquires Andromeda Biotech Ltd., an Israel-based subsidiary of Clal Biotechnology Industries Ltd. (TASE:CBI), for $20 million in cash and shares and up to $550 million in regulatory and commercial milestone payments.
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Andromeda’s DiaPep277 is an immune intervention therapy for Type 1 (juvenile) diabetes. The drug is undergoing a Phase III clinical trial on adult patients, with results due in the first quarter of 2015.
Shlomo Dagan, Ph.D., chief executive officer of Andromeda Biotech said. “If the second Phase 3 study is positive, DiaPep277 could play an important role in immune intervention of Type 1 diabetes, as patients who have even modest preservation of pancreatic beta cell activity could achieve better control of their blood sugar and a reduced risk of long-term diabetes complications.”
At the closing, Hyperion will pay $12.5 million in cash and $7.85 million in shares. It will pay up to $120 million in global regulatory milestones, initially in the US or Europe; and up to $430 million in commercial milestones, the first of which is $450 million in global annual net sales; and contingent sales payments ranging from 10% on annual worldwide net sales up to $300 million to 17% for annual worldwide net sales that exceed $1.2 billion, with the exception of sales by distributors in certain territories, for which the rate is 25%.
“The acquisition of Andromeda Biotech is a transformative event for Hyperion, ” said Donald J. Santel, president and chief executive officer of Hyperion. “We believe DiaPep277 has the potential to become a highly differentiated, first-in-class medicine for an orphan indication with a significant unmet need. With the successful commercialization of Ravicti well under way, DiaPep277 adds an attractive late-stage asset to our portfolio, while we continue development of glycerol phenylbutyrate for hepatic encephalopathy.”