Regulatory action, including the approval of
acromegaly treatment, enthused biotech investors Friday morning.
Tercica said Friday that the Food and Drug Administration approved partner Ipsen's Somatuline Depot, a long-term treatment for acromegaly, a disorder caused by overproduction of growth hormone.
The drug -- available in a prefilled syringe -- is indicated for patients who don't have the option of or who have an inadequate response to surgery or radiotherapy treatment. The agency also deemed Somatuline an orphan drug for acromegaly, giving Tercica seven years of marketing exclusivity.
Tercica holds the development and commercialization rights for Somatuline in the U.S. and Canada, rights it acquired from Ipsen in 2006. Ipsen, which owns a 25% stake in Tercica on a nondiluted basis, will pay Ipsen about $41 million to be issued in a convertible bond, as a milestone payment tied to the approval.
Tercica is also issuing another $15 million convertible bond to Ipsen, converted to common stock at $7.41 a share, in cash. Tercica shares were trading up 3% at $6.73.
The drug will compete with
Sandostatin LAR Depot, which has to be injected into the muscle, typically by a medical professional.
Novartis, meanwhile, won an approval of its own Friday. Sandoz, a generic-drug division of Novartis, received approval in the European Union for its biosimilar epoetin alfa treatment, which works to regulate the formation of red blood cells in patients with renal anemia and patients receiving chemotherapy.
The company said it would quickly bring the product to market, estimating worldwide annual sales of more than $7 billion, including $600 million in Europe. Novartis was trading up 61 cents, or 1.2%, at $52.84.