A collaboration between Novartis and Human Genome Sciences will add an interferon to Novartis' growing pipeline of hepatitis B and hepatitis C therapies. Novartis and HGS announced June 6 that they had signed a co-commercialization agreement for Albuferon (albumin interferon alfa-2b), an investigational drug for chronic hepatitis C.

Under the agreement, Novartis will make an up-front payment of $45 mil., plus future clinical development, commercial milestones and other payments that could total $507.5 mil. In exchange, Novartis will co-commercialize Albuferon in the U.S. and will gain exclusive rights to market the treatment outside the U.S.

Albuferon is a novel recombinant protein that combines interferon alfa with human serum albumin; Novartis and HGS expect to initiate Phase III clinical trials in hepatitis C patients by the end of the year.

Novartis' pipeline portfolio already includes a number of compounds targeting immunomodulation and viral replication for the treatment of hepatitis B and C, including oral nucleoside RNA polymerase inhibitor valopicitabine, oral cyclophilin binder NIM811 and oral immunomodulator ANA795.

"Albuferon is the first interferon that we are adding to this portfolio," Novartis told "The Pink Sheet" DAILY. "For the foreseeable future, we expect long-acting interferons to remain the cornerstone of combination therapy….As the best-in-class interferon, we believe Albuferon will serve as the basis for early combinations with other compounds in our hepatitis C portfolio."

In addition, Novartis noted that Albuferon appears to have advantages over pegylated interferon - the current standard of care when combined with ribavirin - including less frequent dosing and the potential for improved efficacy and tolerability.

Ongoing Phase II studies of Albuferon in combination with ribavirin suggest the possibility of dosing every two weeks or every four weeks versus once weekly dosing, according to the company.

In a same-day conference call, HGS Chief Commercial Officer Barry Labinger said the company chose to partner with Novartis because "they have a great understanding of the hepatitis C market and a strong team with extensive experience in the development and commercialization of hepatitis C drugs."

"The current market for interferons is estimated at about $2 bil., and it is expected to grow dramatically," he added.

HGS noted the Phase III trial is expected to last 48 weeks and include six months of follow-up, in line with other hepatitis C immunomodulatory drug trials.

Novartis signed a similar deal in March to co-promote valopicitabine with Idenix Pharmaceuticals (¹ Also see "Novartis/Idenix To Co-Promote Hep C Treatment, But Side Effects Delay Phase III Trial" - Pink Sheet, 29 March, 2006.).

Competition to develop improved hepatitis C therapies is heating up. Vertex Pharmaceuticals recently announced plans for two Phase II trials of its protease inhibitor VX-950 in combination with Roche's Pegasys (pegylated interferon alfa-2a) and Schering-Plough's Rebetol (ribavirin) in 2007 (² Also see "Vertex To Use Large Phase II Trial Population For Hep C Product" - Pink Sheet, 24 May, 2006.).

Schering-Plough is also studying an investigational protease inhibitor for HCV.

The HGS agreement marks Novartis' second deal signed this week. Novartis will assume development for compounds targeting transplant rejection and autoimmune diseases that are produced under a deal inked June 4 with the Australian biotech firm Cytopia.

Under the collaboration, the two will work on orally active, small molecule therapeutics targeting JAK3 kinase.

Because JAK3 occurs only in cells of the immune system, potential therapies targeting the enzyme offer a novel approach to treating transplant rejection and multiple autoimmune indications - including rheumatoid arthritis - with fewer side effects, Cytopia said.

Novartis also has commercialization rights for compounds that result from the partnership. Cytopia retained co-promotion rights for Australia and New Zealand.

Under the agreement, Novartis will pay Cytopia approximately $9.5 mil. over three years, including an up-front payment and research funding.

Cytopia could garner up to $205 mil. from Novartis if an agreed number of multiple indications are successfully commercialized. Novartis also agreed to pay the Australian firm royalties.

- Brooke McManus, Shirley Haley

Novartis Bolsters Hep C Pipeline With Human Genome Sciences Collaboration

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