Grifols will take a $26-million, roughly one-third stake in Aradigm under an exclusive, worldwide up-to-$116 million-plus license to develop and commercialize the latter’s inhaled ciprofloxacin formulations (Pulmaquin™ and Lipoquin™) for severe respiratory diseases that include non-cystic fibrosis bronchiectasis (BE), the companies said today.

Under their deal, the companies will advance Aradigm’s inhaled ciprofloxacin formulations into Phase III clinical trials in BE. Aradigm has completed Phase IIb clinical trials in BE patients with both Pulmaquin and Lipoquin. Aradigm holds an orphan drug designation for BE in the U.S. granted by FDA, with no drug now approved for treating the disorder.

“Pulmaquin will complement Grifols existing Prolastin-C business. There is significant overlap between bronchiectasis and Alpha1 physicians and patients,” Ramon Riera, president of Grifols’ global commercial division, said in a statement.

In addition to the stake in Aradigm, Grifols will be responsible for all development and clinical expenses up to a maximum of $65 million for the BE indication. Grifols also must pay Aradigm up to $25 million cash tied to achieving undisclosed development milestones. In addition, Grifols will be responsible for all commercialization activities, paying Aradigm tiered royalties on worldwide sales of products that use Aradigm’s inhaled ciprofloxacin formulations.

Grifols also agreed, subject to Aradigm shareholders’ approval, to buy 35% of Aradigm’s common stock at $0.124 per share, for a total investment of about $26 million. The companies said new investor Great Point Partners will join existing Aradigm shareholders, including Tavistock Life Sciences and accounts managed for First Eagle Investment Management as co-investors in the stock purchase by snapping up an additional roughly $15.4 million in Aradigm common shares.

The deal, subject to closing conditions, is expected to close in the second half of this year. When that happens, Grifols can name two directors to Aradigm’s board of directors.

Grifols will use its existing pulmonary sales team to commercialize Pulmaquin.

“Grifols is a great fit for us with their global reach of respiratory physicians treating a number of conditions that could benefit from Pulmaquin,” Igor Gonda, Aradigm’s president and CEO, said in the statement.

Previous articlePhase III Failure for Pfizer NHL Drug
Next articleElan Buys Up AOP Orphan, Large Stake in Newbridge