Merck will acquire NovaCardia, Inc., a privately held clinical-stage pharmaceutical company focused on cardiovascular diseases, for $350 million. NovaCardia's lead product candidate KW-3902, an adenosine A1 receptor antagonist, is currently in Phase III trials in patients with acute congestive heart failure (CHF). The drug works by blocking adenosine-mediated constriction of blood flow to the kidneys and inhibiting reabsorption of salt and water by the kidney, increasing urine volume and maintaining renal function in patients with CHF.

"This acquisition continues to deliver on our strategy of targeted acquisitions in areas of unmet medical need in the therapeutic areas of strategic importance for Merck such as cardiovascular diseases," said Richard Kender, vice president of business development and corporate licensing at Merck.

"We are excited to see our lead product become part of the superb scientific environment of Merck," said Randall E. Woods, president and chief executive officer at NovaCardia. "NovaCardia demonstrated the potential of KW-3902 in clinical trials, and we believe that Merck can expedite the development of this novel agent."

Wyeth received an approvable letter from the FDA for Pristiq, a serotonin-norepinephrine reuptake inhibitor (SNRI), currently under review for moderate-to-severe vasomotor symptoms (hot flashes and night sweats) associated with menopause. However, the company needs to provide additional data regarding the potential adverse cardiovascular and hepatic effects associated with the use of Pristiq in this indication. The Agency requested a one-year clinical trial conducted in postmenopausal women. The FDA also requested that Wyeth address certain CMC (Chemistry, Manufacturing and Controls) deficiencies prior to approval.

"Wyeth remains committed to the development of Pristiq as a potential treatment for moderate-to-severe vasomotor symptoms associated with menopause," says Gary L. Stiles, M.D., executive vice president and chief medical officer, Wyeth Pharmaceuticals. "We will work with the Agency to satisfy its requests for additional data and move the medicine forward in the FDA review process."

On January 22, 2007, the company received an approvable letter for Pristiq for the treatment of Major Depressive Disorder (MDD), which did not require additional clinical studies prior to approval for this indication. The company plans to submit its complete response to the MDD approvable letter at the end of August, and the Agency is expected to render a decision in 1Q2008.

Galapagos achieved the second milestone under the antibody collaboration with Novartis for bone-related diseases, triggering a payment of $1 million to Galapagos. Galapagos will pay $750,000 of this amount to ProStrakan as part of their December 2006 agreement.

The Novartis/ProSkelia SASU (formerly a subsidiary of ProStrakan) collaboration was formed in September 2006. Under the terms of the original agreement with Novartis, total milestones could exceed $100 million plus royalties. The first milestone, announced in December 2006, was related to intellectual property. The collaboration was then transferred to Galapagos as part of its acquisition of ProSkelia from ProStrakan on December 22, 2006. Under the terms of Galapagos' acquisition of ProSkelia, Galapagos and ProStrakan split milestone and royalty income from existing agreements—25% for Galapagos and 75% for ProStrakan, while Galapagos is responsible for R&D costs.

"We are pleased with the smooth integration of ProSkelia R&D under Galapagos management," said Onno van Stolpe, chief executive officer of Galapagos. "This milestone demonstrates the progress our research team has made since the acquisition in December."

Dr. Wilson Totten, chief executive of ProStrakan added, "The terms and conditions of the sale of ProSkelia enabled us to retain an interest in future up-side from existing agreements. We are now beginning to see the cashflow from those programs come through and we expect this revenue stream to continue to develop and add value over the coming years."

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