The Novartis licensing agreement for Quark's kidney disease drug could be worth $700 million.
Quark Pharmaceuticals Inc. is following the path trod by Israeli drug development companies of bringing a product up to a certain stage of development and entering into a licensing agreement with an international pharmaceutical company, in exchange for royalties on future sales. Sources inform ''Globes'' that Quark has signed a licensing agreement for its QPI 1002 drug for the treatment of acute kidney disease and delayed graft function (DGF) in kidney transplantation with Novartis AG (NYSE:NVS; LSE: NOV; SWX: NOVZ). The new deal follows a licensing agreement with Pfizer Inc. (NYSE: PFE; LSE: PFZ) signed in 2006.
The agreement is for development of a drug for the treatment of kidney-related problems. Payments could reach $700 million, dependent on milestones. Quark will receive an initial payment of a few million dollars.
Quark was not available for comment.
In a separate development, Quark is again considering an IPO, this time on the Tel Aviv Stock Exchange (TASE), three years after abandoning a planned IPO on Nasdaq. The company had planned to raise $60-70 million at a company value of $220-260 million.
Quark plans to raise several tens of millions of dollars at a company value of $250-300 million in an IPO within two or three months. Assuming that the company goes public, it will follow in the steps of Intec Pharma Ltd. (TASE: INTP), Proteologics Ltd. (TASE: PRTL), Aposense Ltd. (TASE: APOS), and InsuLine Medical Ltd. (TASE: INSL), all of which have gone public this year. However, assuming that the company value is achieved, Quark could join the Tel Aviv 100 Index.
Quark president and CEO Dr. David Zurr founded the company in 1994. The company is developing silencing RNA (siRNA) drugs, which function by selectively blocking genes that cause disease. The Ness Ziona-based company has several drugs in the pipeline, aimed at treating age-related macular degeneration (AMD), acute kidney injury, and glaucoma. The company has raised $130 million in eight financing rounds to date, the most recent in June.
Quark already has revenue from Pfizer from the licensing agreement for PF655 for AMD. Potential revenue could be tens or even hundreds of millions of dollars.
The agreement with Novartis was signed following completion of a Phase I clinical trial of the QPI 1002 for acute kidney disease. The drug also has obtained orphan drug status for DGF in kidney transplantation from the European Medicines Agency (EMEA) and US Food and Drug Administration (FDA). Quark has conducted the trials on the drug on its own. Novartis will finance further trials under the licensing agreement, and Quark will receive payments on meeting milestones, such as completion of the Phase II clinical trial, the start of a Phase III trial, and regulator approval of the drug.
In July, Quark signed a collaboration and license agreement with Japan's Nitto Denko Corporation (TSE: 6988) for Quark's QPI-1007 drug for the treatment of glaucoma. Under the collaboration, Quark will provide the drug and Nitto Denko will provide its proprietary drug delivery technologies.
Published by Globes [online], Israel business news - www.globes-online.com - on August 17, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010
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