Pfizer Inc. (PFE) is set to pay Opko Health Inc. (OPK) a fairly pricey $295 million upfront fee to gain global development and commercial rights to Opko's late-stage, long-acting human growth hormone, the parties said Monday.
Miami-based Opko gained the compound, hGH-CTP, and its technology to extend the action of biologics with its $480 million all-stock acquisition of Israel's Prolor Biotech Inc. in April 2013. Pfizer was reportedly interested in buying Prolor at the time, which may explain the high price and unusual deal terms.
In addition to the upfront payment, Opko could get up to $275 million in milestone fees pegged to regulatory actions. Upon commercialization of hGH-CTP for adult growth hormone deficiency (GHD), Pfizer has agreed to pay royalties on sales. After the compound gains regulatory approval for pediatric GHD, those royalties would transition to allow Opko gross profit sharing for hGH-CTP and Pfizer's product Genotropin (somatropin [rDNA origin]).
The transaction, subject to Hart-Scott-Rodino approval, is expected to close in the first quarter 2015.
Opko's hGH-CTP is now in Phase 3 clinical trials for adults and Phase 2 for pediatric use. Opko would continue to lead the clinical activities and fund the development programs for the key indications, which include pediatric SGA. That term refers to "small gestational age," and applies to children who fail to show catch-up growth by age two. hGH-CTP could offer more convenience for patients, as it requires less frequent dosing -- weekly injections rather than the daily injections required by current therapies.
The global growth hormone market is estimated at more than $3 billion, according to Opko.
"Pfizer's strengths, expertise and presence in the human growth hormone space makes them the ideal partner for our hGH-CTP program," Opko's CEO Phillip Frost said in a statement. "Our collaboration enables full alignment between Pfizer and Opko to optimize development and potentially bring an innovative treatment to patients."
Frost is chairman of Israel-based pharma giant Teva Pharmaceutical Industries Ltd. (TEVA) . He made his fortune selling Ivax Corp. to Teva in 2006. Now as Opko CEO, he steers the company to acquire drugs under development in large and rapidly growing medical markets by pursuing acquisitions and investing in early stage drug companies, as well as undertaking organic growth. Opko divisions include point-of-care diagnostics, novel molecular diagnostics and proprietary pharmaceuticals and vaccines.