Shire - ArmaGen

Shire ($SHPG) will hand over up to $225 million in equity milestone payments and royalties "up to double digits" in return for the commercialization rights to ArmaGen's candidate for Hunter syndrome, a rare condition that leads to joint stiffness, heart problems, neurological deficits and premature death. The rare disease specialist made an initial one-time payment of $15 million in cash and equity to ArmaGen.

Fighting Hunter syndrome requires overcoming the blood-brain barrier, a feat that's not yet been accomplished, but has left a lot of cratered partnerships and failed companies in its wake.

So this deal gets bonus points for bravery, and with luck, could be the first to accomplish that goal. Since the partnership was announced, the FDA accepted the candidate's Investigational New Drug Application, allowing Phase I trials to commence.

Calabasas, CA's ArmaGen says the Phase I candidate (AGT-182) is a replacement therapy for the enzyme that normally doesn't cross the blood-brain barrier in people with Hunter syndrome. ArmaGen says AGT-182 crosses the blood-brain barrier because it's delivered as an antibody-drug conjugate.

Hunter syndrome is classified as a lysosomal storage disease. "We picked lysosomal storage diseases because there's an unmet medical need that's glaring. Two-thirds of lysosomal storage diseases have a central nervous system sequelae (or condition) that's a major component of the disease, and none of these therapeutics can cross the blood-brain barrier, until now," ArmaGen CEO James Callaway told FierceDrugDelivery in an interview.

The ADC travels through the brain's insulin receptor. The transferrin receptor for transporting iron has been a common target as well, but Callaway believes the insulin receptor is a more efficient pathway into the brain. "This superior efficiency may be due in part to the observation the insulin receptor is a unidirectional transport system, transporting from blood to brain while the transferrin receptor facilitates transport of iron both into and out of the brain," he said.

Callaway also touted the antibody's affinity, which leads to higher insulin receptor occupancy by the candidate at lower doses. That creates a wider therapeutic window, or the difference between the dose level required for efficacy and the dose level at which toxicity is observed.

The company's go-it-alone Phase I candidate (AGT-181) for the lysosomal storage disease Hurler syndrome also targets the same insulin receptor.

Meanwhile, Shire already sells the intravenous orphan drug Elaprase for Hunter syndrome, whose patent expires in 2019. It had sales of $592.8 million in 2014, up 9%, with 80% coming from outside the U.S. But the Mayo Clinic says that it is unclear if improvements with the drug are significant enough to enhance patients' quality of life.

Shire R&D chief Philip Vickers

"AGT-182 has the potential to be an important new therapy to our existing portfolio of Hunter syndrome programs," said Shire's global head of research and development, Philip Vickers, in a statement. "We plan to apply our proven ability to develop therapies for rare genetic diseases to progress AGT-182 as a potential treatment that offers hope to patients with Hunter syndrome and their families."

Shire isn't the only bigwig that's allied with ArmaGen. Callaway said the company's also working with Merck ($MRK) to use its blood-brain barrier delivery system on an undisclosed neuroscience target.

Shire, Boehringer Ingelheim, and Takeda participated in ArmaGen's $17 million Series A financing in 2012. 

-- Varun Saxena (email | Twitter)

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Shire - ArmaGen