Biolex Therapeutics has expanded the scope of its partnership with OctoPlus N.V., acquiring all commercial rights to the Dutch company's hepatitis C candidate Locteron in a deal worth up to $149 million in upfront and milestone payments. The firms announced the deal Oct. 6.

Worldwide sales of interferon alfa products - which serve as the foundation of current combination HCV therapy - are expected to exceed $5 billion by 2014.

OctoPlus and Biolex have been involved in co-development of Locteron, currently in Phase IIa trials, since 2005. Biolex now takes full responsibility for development and commercialization of the drug. The Pittsboro, N.C., firm will fund the move with $60 million from a completed Series D financing round led by the biotechnology investor Clarus Ventures with OrbiMed Advisors participating as a new investor.

Octoplus will receive an upfront fee of $11 million, potential milestone payments totaling $138 million, royalties on future Locteron sales, and an equity stake in Biolex of up to 3 percent. OctoPlus also retains commercial manufacturing rights to Locteron.

"This deal is beneficial to OctoPlus in two ways," OctoPlus CEO appointee Simon Sturge said in a statement announcing the deal. Sturge's appointment is yet to be confirmed by stockholders.

"Firstly, we will continue to be involved in the development of a potential blockbuster, but without having to make the expenditures of late-stage clinical development." Secondly, the payments involved in the deal "will transform us into a company with a positive operational cash flow."

The deal also could be Biolex's ticket to a positive change of luck: the firm tried and failed in an attempt to go public, withdrawing its IPO in 2007, and Locteron could be the late-stage product it needs to validate its lemna-based LEX technology and attract other big pharma partners.

A controlled-release formulation of interferon alfa, Locteron combines BLX-883, a recombinant alfa interferon produced by the LEX system, which uses the marine plant Lemna to express recombinant proteins, with OctoPlus' proprietary PolyActive drug-delivery technology.

Locteron is designed to be a best-in-class therapy that would provide a more favorable side-effect profile and a more convenient once-every-two-weeks dosing schedule compared to existing pegylated interferon products, according to the firms.

Roche's Pegasys (peginterferon alfa 2a) and Schering Plough's PegIntron (peginterferon alfa 2b), as well as Human Genome Sciences' HCV candidate Albuferon (albinterferon alfa-2b), all are immediate-release products.

All major hepatitis C drug candidates currently in clinical trials are being studied in combination with interferon alfa, including Schering-Plough's Phase III protease inhibitor boceprevir and Vertex Pharmaceuticals' Phase III telaprevir (¹ Also see "Length Of Therapy Becomes An Issue In HCV Protease Inhibitor Race" - Pink Sheet, 5 August, 2008.).

- Jamie Hammon (j.hammon@elsevier.com)

Biolex Takes Over OctoPlus’ Phase II HCV Candidate

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