October 7, 2015
By
Alex Keown
, BioSpace.com Breaking News Staff
YAVNE, Israel –
Applied Genetic Technologies Corporation
will not exercise its option to purchase its former subsidiary
Andromeda Biotech
from
Hyperion Therapeutics
and its parent company
Horizon Pharma
following the late-stage failure of the company’s experimental treatment for juvenile diabetes, Globes, an Israel-based business publication
reported
.
Clal Biotech
had an option to purchase
Andromeda
for a price tag of $2.5 million to $36.5 million, depending on clinical trial outcomes. However,
Andromeda
’s Phase III trial for DiaPep277, a drug for the treatment of type 1 diabetes in juveniles, failed to achieve efficacy, Globes said. There is no indication yet if research will continue on the drug to see if it is a more effective diabetes treatment for other age groups.
Clal Biotechnology
is a life-sciences holding company. Its main holdings include
Gamida Cell Ltd.
,
MediWound Ltd.
and
CureTech Ltd.
, Globes reported.
Clal
’s , traded on the Tel Aviv Stock Exchange, was down this morning. The stock was trading at 280.10 ILS (Israeli Shekels) down from a day’s high of 288.70 ILS.
Clal
’s option to purchase
Andromeda
was part of an agreement with Hyperion the two companies entered into after a dispute over DiaPep277 stemming back to 2014. In April 2014,
Hyperion
acquired
Andromeda
from
Clal
for up to $570 million, but then scuttled trials for DiaPep277, arguing the drug’s data was not complete as it omitted results from 34 patients in violation of trial protocols.
Clal
sued
Hyperion
for $200 million, arguing that the company’s claims against them caused damage to the company’s reputation. The two companies negotiated a truce to complete trials for DiaPep277, giving
Clal
the option to repurchase
Andromeda
and the drug.
In 2007,
DeveloGen AG
sold
all rights to DiaPep277 to Andromeda, which at the time was a subsidiary of
Clal Biotechnology
.
After
Andromeda
acquired the drug from
DeveloGen
, it c-o-developed the medication with Israel-based
Teva Pharmaceutical Industries Ltd.
until that company relinquished its rights to the drug in 2014, Globes reported.
Teva
financed most of the clinical trials surrounding DiaPep277, Globes
said
.
After the latest DiaPep277 drama, the drug is scheduled to revert to
Yeda Research and Development Company
, the place where it was originally discovered.
In May,
Hyperion
was
acquired
by Ireland-based
Horizon Pharma
for $1.1 billion.
Hyperion
’s pipeline included Ravicti and Buphenyl, both used for the treatment of urea cycle disorders. Buphenyl, also known as sodium phenylbutyrate, helps by removing nitrogen from the body. Ravicti, or glycerol phenylbutyrate, eliminates ammonia in patients over 24 hours. Urea cycle disorders and metabolic disorders impact more than 2,100 people in the U.S.
Earlier this year,
Novo Nordisk
pulled the plug on an expansion of Victoza (liraglutide) for use in type 1 diabetes after disappointing Phase III trial results. Victoza is a GLP-1 analogue used to treat type 2 diabetes. In the latest study, dubbed Adjunct One, Victoza (liraglutide) combined with an insulin improved blood glucose control in attempts to treat type 1 diabetes actually worsened episodes of low blood sugar, the company reported.