ArmaGen said today it licensed to Shire the worldwide commercialization rights to its investigational Hunter syndrome drug AGT-182, one of its two lead programs. The deal could net ArmaGen up to about $225 million.

AGT-182 is an enzyme replacement therapy (ERT) designed to treat both the central nervous system (CNS) and somatic manifestations of Hunter syndrome by binding to the same receptor that delivers insulin to the brain. The ERT has received orphan drug designation from both the FDA and the European Medicines Agency (EMA).

AGT-182 is engineered by fusing a replacement for the enzyme iduronate-2-sulfatase (IDS), which helps break down complex sugars produced by the body, to an antibody that is attracted to the same receptor that delivers insulin to the brain. That enables the engineered enzyme to travel through the blood-brain barrier, attached to that antibody. Last month, ArmaGen said the U.S. Patent and Trademark Office issued a notice of allowance for a patent claiming the composition of AGT-182—a patent that, once issued, will be in force until at least 2030.

ArmaGen said it will be responsible for conducting a Phase I/II study of AGT-182, a trial it expects to initiate before the end of this year. Shire will oversee further clinical development, including Phase III trials, registration and commercialization of AGT-182 worldwide.

In return, Shire agreed to pay ArmaGen up to about $225 million. That includes $15 million in upfront cash and equity, as well as an additional equity investment, R&D funding, development and sales milestones, in addition to future royalties up to double digits.

“The agreement with Shire validates the clinical potential of ArmaGen’s lead therapy and its ability to cross the blood-brain barrier to treat the progressive and devastating neurological complications of Hunter syndrome,” ArmaGen CEO James Callaway, Ph.D., said in a statement. “Shire is the ideal partner for AGT-182, based on the company’s international reach and expertise in serving patients with Hunter syndrome.”

Shire’s global reach will broaden further if the company is acquired by AbbVie for roughly £32 billion (approximately $55 billion), as announced by both companies last week. The combined company would be domiciled in the U.K., in the largest and latest tax-slicing “inversion” deal within biopharma.

Added Philip J. Vickers, Ph.D., Shire’s global head of research and development: “AGT-182 has the potential to be an important new therapy to our existing portfolio of Hunter syndrome programs. We plan to apply our proven ability to develop therapies for rare genetic diseases to progress AGT-182 as a potential treatment that offers hope to patients with Hunter syndrome and their families.”

Shire’s Elaprase® (idursulfase), indicated for Hunter syndrome, was the company’s second best-selling medicine last year, with $546 million in sales. Shire pipeline includes a Phase II Hunter compound, SHP609, for CNS disorders associated with the syndrome.

AGT-182 is one of ArmaGen’s two lead programs; the other is AGT-181, an ERT that is indicated for Hurler’s syndrome.  ArmaGen plans to launch a Phase I/II study of AGT-181 later this year in patients with the lysosomal storage disorder.

ArmaGen said a joint steering committee with representatives from both companies will oversee the ArmaGen-Shire collaboration.

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