Otsuka Pharmaceutical will commercialize Ariad Pharmaceuticals’ leukemia treatment Iclusig® (ponatinib) in Japan and nine other Asian countries, as well as fund future clinical trials in those countries. The deal could net Ariad as much as $77.5 million-plus, the companies said today.

Iclusig is a tyrosine kinase inhibitor (TKI) already approved in the U.S., Europe, and Australia. Ariad will lead the completion of a Japanese New Drug Application (NDA) for Iclusig, while Otsuka will file an NDA on behalf of both companies seeking regulatory approval in resistant and intolerant chronic myeloid leukemia (CML) and Philadelphia-chromosome positive acute lymphoblastic leukemia (Ph+ALL) in 2015.

The agreement gives Otsuka exclusive rights to market Iclusig in Japan, as well as China, Indonesia, South Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand, and Vietnam.

In all 10 countries, Otsuka will have exclusive commercial rights to Iclusig and will promote it as its sole TKI. A joint development and commercialization committee will oversee clinical development and commercialization of Iclusig, including approval of any development or commercialization plans.

Otsuka, in turn, agreed to pay Ariad $77.5 million upfront, an undisclosed milestone payment upon regulatory approval in Japan for patients with resistant and intolerant Philadelphia-positive leukemias, and additional undisclosed milestone payments for approval in other indications.

Ariad will continue to fund the completion of its ongoing pivotal trial of Iclusig, which will form the basis of the Japanese NDA, while Otsuka will fund additional agreed-upon clinical studies in Japan and the nine other Asian countries. For Ariad-sponsored global studies that include sites in Japan, Otsuka has the option to contribute to the funding and gain access to the data for use in the 10 countries.

Following approvals in the 10 countries, Otsuka will conduct sales activities and record sales, while Ariad will also receive “a substantial share” of net product sales, the companies added.

“This agreement meets one of our key strategic objectives—establishing a strong partnership with an experienced and committed Japanese pharmaceutical company to commercialize and co-develop Iclusig in Japan and Asia,” Harvey J. Berger, M.D., Ariad’s chairman and CEO, said in a statement.

Iclusig’s primary target is BCR-ABL, an abnormal tyrosine kinase expressed in CML and Ph+ ALL. Iclusig not only targets native BCR-ABL but also its isoforms that carry mutations that confer resistance to treatment, including the T315I mutation associated with resistance to other approved TKIs.

Iclusig rose from the dead last winter, resuming U.S. commercial sales with a narrower patient subpopulation and a new boxed warning—both designed to address concerns that drove the company to halt a Phase III trial and pull the product last year. The halt resulting in the company laying off about 40% of its U.S. staff—160 employees—and shrunk Ariad’s workforce to about 295 employees in the U.S. and Europe.

At $34.4 million for the first nine months of 2014, Iclusig sales are still a long way from a Cowen & Co. estimate in 2013 that annual sales would reach $625 million in 2017 and more than $1 billion ultimately.

Ariad received encouraging news in October, however, when Iclusig withstood an Article 20 review in Europe, as the European Medicines Agency endorsed a recommendation by the Pharmacovigilance Risk Assessment Committee (PRAC) that Iclusig continue to be used in Europe in accordance with its already approved indications: “We are now focused on obtaining pricing and reimbursement in all key European markets,” Dr. Berger said in a November 5 press release announcing third-quarter results.

Ariad’s pipeline consists almost entirely of seven new Iclusig indications, all in Phase II trials, though on September 29, the company reported promising updated Phase I/II data on AP26113 for non-small cell lung cancer (NSCLC), shortly before it received FDA’s Breakthrough Therapy designation.

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