Advertisement
Jean-Jacques Bienaime, Chief Executive Officer of BioMarin commented, "Weare very pleased to become La Jolla Pharmaceutical's partner for Riquent. Thedevelopment history of Riquent has been long and challenging, but we feel thecurrent study addresses the shortcomings of prior studies and provides thebest possible opportunity to demonstrate that Riquent reduces the frequency ofrenal flares in lupus nephritis patients. The ASPEN Phase 3 study is thelargest clinical study ever conducted in lupus nephritis and there isincreasing evidence that Riquent targets one of the most important underlyingcauses of kidney disease in lupus patients, antibodies to double stranded DNA.
Advertisement
Mr. Bienaime continued, "This product opportunity also represents anexceptionally good strategic fit for BioMarin. Lupus nephritis is a seriousand potentially fatal orphan disease treated by specialists, primarilynephrologists and rheumatologists, and there are no products specificallyapproved to treat lupus renal disease. Importantly, if the ASPEN study issuccessful, Riquent provides BioMarin the opportunity to launch a product inthe 2010 and 2011 timeframe in regions where we can leverage existingcommercial operations."
"BioMarin is a proven leader in successfully bringing value-addedtherapies to patients suffering from orphan diseases and we are very pleasedto have BioMarin as a partner to develop and commercialize Riquent in theU.S., Europe, the Middle East and Latin America," said Deirdre Y. Gillespie,M.D., President and CEO of La Jolla Pharmaceutical Company. "This is anoutstanding partnership for us as it not only provides significant near termfunding towards the completion of the ASPEN trial but also facilitates LaJolla's plans to build a U.S. commercial infrastructure going forward. 2009 isa pivotal year for La Jolla and we are pleased to start the year with thispositive announcement. We look forward to the first interim analysis of theASPEN trial data which is expected to occur later in this quarter," continuedDr. Gillespie.
Overview of Deal Terms
Under the terms of the agreement, BioMarin will receive a co-exclusivelicense to develop and commercialize Riquent and La Jolla could receive up to$289 million in cash through milestones and equity purchases by BioMarin.Specific payments include: $15 million upfront, up to approximately $92.5million related to clinical milestones, $55 million for regulatory milestones,and up to approximately $126 million for achieving specified annual net salesmilestones beginning at $250 million in sales.
At each of the two interim efficacy analyses (the first expected in thefirst quarter of 2009 and the second expected in mid-2009) or when the ASPENstudy comes to a successful completion, BioMarin may exercise its option tofully participate and share all losses and profits on a 50:50 basis. Prior toBioMarin's decision to participate fully, La Jolla will fund 100% of allcosts. La Jolla expects consideration from the deal to significantly cover theremaining costs of the Phase 3 ASPEN study. The collaboration also provides LaJolla an ability to participate equally in sales and marketingresponsibilities in the United States to facilitate building its commercialinfrastructure. La Jolla will maintain primary manufacturing responsibility,and work collaboratively with BioMarin to maximize supply chain and processefficiencies.
Upfront Payment
Upon signing, BioMarin will pay La Jolla a total upfront payment of $15million, $7.5 million in cash and $7.5 million for the purchase of 3,391,035preferred shares at a price per share of $2.21171. The preferred shares areinitially convertible at a rate of three shares of common stock for every onepreferred share. This is equivalent to a common stock purchase price of$0.73724, a 20% premium to the average closing price for La Jolla's commonstock over the previous 20 trading days.
Clinical Milestones
Depending on the outcomes (non-futile or achievement of p-value, p<0.001)of two predefined interim efficacy analyses in the Phase 3 ASPEN study as wellas the complete Phase 3 clinical results, BioMarin will pay La Jolla up to anadditional $47.5 to $92.5 million in clinical milestone and full participationpayments prior to approval. BioMarin may apply up to $20.0 million of thesepre-approval clinical milestones toward additional purchases of La Jollapreferred stock. If the first interim efficacy analysis results in anon-futile determination by the Data Monitoring Board, BioMarin will pay amilestone of $15 million to maintain its license option. If the second interimefficacy analysis results in a non-futile determination by the Data MonitoringBoard, BioMarin will pay a milestone of $22.5 million to continue its licenseoption, $5 million of which may be used to purchase additional equity.
Riquent is being evaluated in the international Phase 3 ASPEN trialdesigned to demonstrate that Riquent treatment delays the time to renal flareand reduces proteinuria in patients with lupus renal disease. The RiquentPhase 3 program is the subject of a special protocol assessment and has fasttrack designation from the Food and Drug Administration and Orphan Drugdesignation in the United States and Europe. The first and the second interimefficacy analysis are expected to occur in the first quarter of 2009 and mid-2009, respectively. The final efficacy analysis is expected to occur in thesecond half of 2009. Assuming a positive outcome of the ASPEN Phase 3 trial, aNew Drug Application is expected to be submitted in the first half of 2010. Ifapproved, Riquent would be the first new drug approved specifically for lupusin more than 45 years.
BioMarin Conference Call Information
BioMarin will hold a conference call today, January 6, 2009, at 5:00 p.m.ET to discuss this announcement. This event can be accessed on the investorsection of the BioMarin website at http://www.BMRN.com.
La Jolla Conference Call information
La Jolla will hold a conference call tomorrow morning, January 7, 2009, at8:00 a.m. ET to discuss this announcement. This event can be accessed on theLa Jolla website at http://www.ljpc.com. A replay of the conference call willbe available later in the day of the call on La Jolla's Web sitehttp://www.ljpc.com and will be archived for several weeks. In addition, areplay of the conference call can be accessed by dialing 888-286-8010 (US) or617-801-6888 (international). The passcode for the replay is 20790213.
About Lupus Nephritis
Lupus nephritis is a life-threatening, antibody-mediated disease and ischaracterized by periods of extreme, acute inflammation or renal flares whichoften require treatment with high-dose corticosteroids, immunosuppressiveagents and hospitalization. Over time, lupus nephritis can lead todeterioration of kidney function and end-stage kidney disease, requiringlong-term renal dialysis or kidney transplantation, and often results inmorbidity and mortality.
About Riquent
Riquent is being developed to specifically treat lupus renal disease bypreventing or delaying renal flares, a leading cause of sickness and death inlupus patients. It is also being studied to assess whether Riquent treatmentimproves proteinuria, as was observed in previous clinical trials. Proteinuriais an indicator of abnormal renal function. Riquent has been well tolerated inall 14 clinical trials, with no overall difference in the adverse eventprofiles for Riquent-treated patients compared with placebo-treated patients.Riquent specifically reduces circulating levels of anti-dsDNA antibodies andis also designed to specifically suppress the B cells that make theseantibodies. Decreases in these antibodies are believed to be associated with adecreased risk of renal flare. Although clinical benefit has not yet beenproven, Riquent treatment has significantly reduced these antibody levels inall clinical trials in which they were measured.
About BioMarin
BioMarin develops and commercializes innovative biopharmaceuticals forserious diseases and medical conditions. The company's product portfoliocomprises three approved products and multiple clinical and pre-clinicalproduct candidates. Approved products include Naglazyme(R) (galsulfase) formucopolysaccharidosis VI (MPS VI), a product wholly developed andcommercialized by BioMarin; Aldurazyme(R) (laronidase) formucopolysaccharidosis I (MPS I), a product which BioMarin developed through a50/50 joint venture with Genzyme Corporation; and Kuvan(R) (sapropterindihydrochloride) Tablets, a product for the treatment of phenylketonuria(PKU), developed in partnership with Merck Serono, a division of Merck KGaA ofDarmstadt, Germany. Other product candidates include 6R-BH4 for cardiovascularindications, which is currently in Phase 2 clinical development for thetreatment of peripheral arterial disease and sickle cell disease, and PEG-PAL(PEGylated recombinant phenylalanine ammonia lyase), which is currently inPhase 1 clinical development for the treatment of PKU. For additionalinformation, please visit http://www.BMRN.com. Information on BioMarin'swebsite is not incorporated by reference into this press release.
About La Jolla Pharmaceutical Company
La Jolla Pharmaceutical Company is dedicated to improving and preservinghuman life by developing innovative pharmaceutical products. The Company'sleading product in development is Riquent(R), which is designed to treat lupusrenal disease by preventing or delaying renal flares. Lupus renal disease is aleading cause of sickness and death in patients with lupus. The Company hasalso developed potential small molecule drug candidates to treat various otherautoimmune and inflammatory conditions. The Company's common stock is tradedon The NASDAQ Global Market under the symbol LJPC. More information about theCompany is available on its Web site: http://www.ljpc.com.
This press release contains forward-looking statements, which involvesignificant risks, assumptions and uncertainties, and a number of factors,both foreseen and unforeseen, that could cause actual results to differmaterially from BioMarin and La Jolla's current expectations. Forward-lookingstatements include those that express a plan, belief, expectation, estimation,anticipation, intent, contingency, future development or similar expression.There can be no assurance that actual results will be consistent theexpectations reflected in BioMarin and La Jolla's forward looking statements.For example, there can be no assurance that: the ASPEN trial will besuccessful or that Riquent will be approved for marketing; the ASPEN trialwill proceed on schedule as currently planned; La Jolla will receive anycontingent payments under the license agreement with BioMarin or even ifRiquent is approved, that it will be successfully marketed. These or otherrisks are discussed under the caption "Risk Factors" in BioMarin and LaJolla's most recent Annual Reports on Form 10-K and subsequent QuarterlyReports on Form 10-Q, as filed with the SEC. Accordingly, you should not relyupon forward-looking statements as predictions of future events. We expresslydisclaim any intent to update forward-looking statements.Date: January 6, 2009 Time: 5:00 p.m. ET U.S. and Canada Toll-Free Dial in #: 866.700.7477 International Dial in #: 617.213.8840 Participant Code: 66691013 Replay Toll-Free Dial in #: 888-286-8010 Replay International Dial in #: 617-801-6888 Replay Code: 82654807
SOURCE BioMarin Pharmaceutical Inc.; La Jolla Pharmaceutical Company
