MGI Pharma Signs Agreement for Rights to Novel Treatment for Thrombocytopenia
"AKR-501 is an ideal commercial and therapeutic fit within our oncology and acute care franchises, and our research and development team is ready to advance these programs following the planned submission of the Aquavan NDA this quarter" stated Lonnie Moulder, President and Chief Executive Officer of MGI PHARMA. "We are pleased to have obtained the rights to this advanced-stage product with significant revenue potential that is being developed for multiple indications. AKR-501 provides MGI PHARMA with a tremendous opportunity for sustained revenue growth in future years, with U.S. peak revenue potential exceeding $1 billion."
AKR-501 is currently being evaluated in a phase 2 trial for the treatment of idiopathic thrombocytopenic purpura (ITP), and the company expects to initiate a phase 3 trial in this disorder within the next 18 months. MGI PHARMA will initiate phase 2 trials in patients with hepatitis-C-related thrombocytopenia and chemotherapy-induced thrombocytopenia (CIT) over the next several quarters, and evaluate other applications of AKR-501, including treatment of MDS.
Terms of the Agreements
Under the terms of the transaction with AkaRx, MGI PHARMA expects to make upfront aggregate payments of up to $45 million to obtain the license rights and the options to acquire all of AkaRx's capital stock from AkaRx shareholders at any time prior to January 8, 2010. The development and license agreement provides that MGI will assume responsibility for certain development activities during the option period. There are no additional milestone payments, and, if AKR-501 is commercialized, no future royalty payments associated with the agreements. If MGI PHARMA elects to exercise its option to acquire all of AkaRx's capital stock, the company would make additional payments of approximately $255 million at that time. As part of the agreements with AkaRx, MGI PHARMA also obtained rights to AKR-201, a metabolite of thyroid hormone targeting thyroid cancer. AKR-201 is in pre-clinical development and has received an orphan drug designation from the United States Food and Drug Administration. The transaction is subject to customary conditions, including expiration of applicable waiting periods under United States antitrust laws. Lazard served as the financial advisor to MGI PHARMA, and Merrill Lynch served as the financial advisor to AkaRx.
Updated Financial Guidance
The Company now expects R&D expenses for the year ended December 31, 2007 to be approximately $73 million. For the year ending December 31, 2008, the Company is now providing adjusted R&D expense guidance of approximately $85 million.
For the year ended December 31, 2007, the Company is maintaining its previous guidance of:
-- Dacogen sales of approximately $115 million
-- Adjusted SG&A expenses of $140 to $145 million;
-- Positive adjusted operating income
The adjusted financial outlook for SG&A excludes non-cash stock-based compensation expense. The adjusted financial outlook for R&D excludes non-cash stock-based compensation expense and license and milestone payments. Adjusted operating income additionally excludes amortization of product intangible assets and restructuring costs. We have excluded these expenses because their amount and significance cannot readily be determined at this time.
AKR-501 is a novel, orally-available, small molecule thrombopoietin mimetic being developed for the treatment of thrombocytopenia. AKR-501 is a full agonist that targets the c-Mpl receptor on megakaryocytes to stimulate platelet production. In Phase 1 single and multi-dose studies evaluating the safety of AKR-501 in healthy volunteers, significant increases in platelet count relative to baseline values were observed. Adverse events were mild and similar to those that were seen in subjects treated with placebo.
Platelets circulate within the blood and play an integral part in the clotting process. Thrombocytopenia is characterized by an abnormally low level of circulating platelets. Thrombocytopenia is associated with multiple disease states and can result from an increased clearance from the peripheral circulation due to sequestration of platelets in the spleen and autoimmune-mediated destruction, or a reduction in the rate of platelet production by bone marrow cells due to reduced levels of thrombopoietin, or treatment with chemotherapy agents. A normal blood platelet count is 150,000-400,000/ul; platelet counts less than 50,000/ul are associated with a higher risk of spontaneous bleeding.
Idiopathic Thrombocytopenic Purpura is an autoimmune disorder where platelets are targeted by antibodies, leading to their destruction primarily in the spleen. Prevalence estimates in the U.S. are as high as 200,000 patients, with approximately 100,000 patients currently receiving treatment.
Chemotherapy-induced thrombocytopenia (CIT) is a common side effect of bone marrow suppression as a result of chemotherapy regimens. Risks associated with CIT include increased incidence of hemorrhage, chemotherapy dose reductions or schedule alterations, and an increased need for platelet transfusions. Of the 1.4 million patients who receive chemotherapy annually in the U.S., approximately 10% suffer from thrombocytopenia.
Thrombocytopenia is a common complication of liver disease due to hepatitis-C virus. Approximately four million patients in the U.S. are infected with the hepatitis-C virus (HCV), a disease that progresses from acute to chronic hepatitis in 50% to 85% of infected patients. The standard for HCV is treatment with pegylated interferon and ribavirin, a regimen that can cause bone marrow toxicity, leading to thrombocytopenia.
Conference Call & Webcast Information
MGI PHARMA will host a webcast and accompanying slide presentation live over the Internet today, Tuesday, August 28, 2007 at 5:00 p.m. Eastern Time. During this session the company's management, including its CEO, Lonnie Moulder, will discuss the clinical development plans of AKR-501 and its commercial potential. Dr. Alan F. List, Division Chief, Malignant Hematology at the H. Lee Moffit Cancer Center and Research Institute, will join the company's management during this presentation. All interested parties are welcome to access the webcast via the Company's Website at www.mgipharma.com. The audio webcast will be archived on the Company's Website through Tuesday, September 4, 2007.
About MGI PHARMA
MGI PHARMA, INC. is a biopharmaceutical company focused in oncology and acute care that acquires, researches, develops and commercializes proprietary products that address the unmet needs of patients. MGI PHARMA markets Aloxi(R) (palonosetron hydrochloride) Injection, Dacogen(R) (decitabine) for Injection, and Gliadel(R) Wafer (polifeprosan 20 with carmustine implant) in the United States. The Company directly markets its products in the U.S. and collaborates with partners to reach international markets. For more information about MGI PHARMA, please visit www.mgipharma.com.
This news release contains certain "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are typically preceded by words such as "believes," "expects," "anticipates," "intends," "will," "may," "should," or similar expressions. These forward-looking statements are not guarantees of MGI PHARMA's future performance and involve a number of risks and uncertainties that may cause actual results to differ materially from the results discussed in these statements. Factors that might cause MGI PHARMA's results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, the ability of MGI PHARMA to continue to increase sales of its marketed products, the ability of MGI PHARMA to achieve its objectives for 2007, the successful completion of clinical trials for the Company's other product candidates, and other risks and uncertainties detailed from time to time in MGI PHARMA's filings with the Securities and Exchange Commission including its most recently filed Form 10-K and Form 10-Q. MGI PHARMA undertakes no duty to update any of these forward-looking statements.
MGI PHARMA, INC.
Timothy J. Smith, 952-406-3100
Posted: August 2007