Acucela, Otsuka enter into agreements

Key Points

Bothell, WA, and Tokyo-Acucela Inc. and Otsuka Pharmaceutical Co. Ltd. have entered into agreements to co-develop Otsuka's proprietary compound for the treatment of dry eye (Rebamipide), which is in phase III clinical trials in the United States, as well as Acucela's lead compound (ACU-4429), which is in phase I clinical trials for non-exudative (dry) age-related macular degeneration (AMD) in the United States.

Under the agreement, the parties will collaborate in the clinical development efforts for the dry-eye treatment in the United States, with Acucela spearheading the regulatory strategy to gain approval for the product in the United States. If the ophthalmic suspension is approved, the parties may negotiate the terms under which Acucela may co-promote the drop with Otsuka in the United States.

Otsuka will pay Acucela an upfront cash payment as well as funds at clinical development milestones and a royalty on sales of the product. Otsuka will be responsible for all clinical development and commercialization expenses.

Under the agreement for the AMD treatment, the parties will co-develop the drug in North America for that indication as well as other potential indications. If the drug is commercialized, the parties may co-promote the product in North America and equally share all expenses and profits from sales of the product in North America. Acucela retains all rights to the drug in Europe, and Otsuka owns the exclusive development and commercialization rights to the product in Asia and selected markets in the rest of the world.

Otsuka will pay Acucela $5 million up front as well as potential milestone payments totaling $258 million. In addition, Otsuka will fund all clinical development activities through phase II clinical testing. Beginning with phase III clinical testing, the parties will share equally in all future clinical development expenses. Otsuka will provide Acucela with a loan facility to enable it to fund its share of the development expenses through the launch of the product in North America.

"At the current time, there are no approved therapies for this debilitating disease that afflicts tens of millions of patients worldwide. We are hopeful that Otsuka and Acucela will learn and work together and to be successful in developing [the drug] as an efficacious treatment for dry AMD," said Taro Iwamoto, PhD, president and representative director of Otsuka.