Focus will be on rare genetic disorders, and Santaris could make $72 million in milestones per product.

Santaris Pharma entered a multiyear worldwide alliance with Shire to discover and develop RNA-based medicines to treat rare genetic disorders. Santaris will initially receive $6.5 million and stands to earn $13.5 million in a near-term milestone, $72 million in milestones for each of five potential candidates, plus royalties.

The term of the research collaboration is two years, and Shire has an option to extend it by up to two more. The arrangement will leverage Santaris’ Locked Nucleic Acid (LNA) technology to identify and select drug candidates against certain targets. Shire will be responsible for this selection and all further development and commercialization.

The $6.5 million initial payment covers technology access, exclusivity for three predefined targets, and initial discovery funding. An additional fee of $13.5 million will be paid upon successful completion of certain early studies. Shire will also fund additional discovery activities and pay a fee for the nomination of up to two additional targets. The $72 million in milestones per product developed covers development, regulatory, and sales goals.

Santaris’ LNA technology creates synthetic chemical versions called LNAs of the normal nucleic acid building blocks of RNA. These LNAs reportedly improve the drug-like qualities of oligonucleotides by boosting resistance to metabolism, increasing half-life, and improving tissue uptake. LNA-based therapeutics demonstrate improved binding affinity to their target RNA, which increases potency many-fold over other nucleotide therapeutics, Santaris adds.

Santaris has similar worldwide discovery deals with Wyeth and GlaxoSmithKline (GSK). In January Wyeth paid Santaris $7 million up front and made a $10 million equity investment in the company. Santaris may receive milestone fees of up to $83 million for each of 10 potential targets.

The GSK collaboration on the other hand has a total worth of up to $700 million. In December 2007 the firm paid $3 million up front and made a $5 million equity investment. It has options to drug candidates in up to four different viral disease programs. Success in the first program would earn Santaris milestones of up to $140 million. If GSK initiates additional programs, Santaris will receive similar up-front and milestone fees for each. If GSK exercises its option to develop and commercialize SPC3649, Santaris’ preclinical HCV candidate, it will make a further up-front payment of $5 million and milestones of up to $122 million.

Santaris earliest deal was signed with Enzon in July 2006. Under this co-development and co-commercialization arrangement, the company received $8 million up front, and is entitled to another $200 million. Santaris out-licensed two preclinical compounds and six additional RNA antagonist candidates, all to be directed against novel oncology drug targets selected by Enzon. This April Santaris reported that it delivered six anticancer agents to Enzon.

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