Wednesday, October 29, 2008

EMD Serono pays for U.S. licensing of AIDS treatment

By Mass High Tech Staff

EMD Serono Inc., a Rockland-based affiliate of German pharmaceutical giant Merck KGaA, has been given U.S. licensing rights to tesamorelin, a treatment of “excess abdominal fat in HIV patients with lipodystrophy” from Theratechnologies Inc. In exchange, Merck will pay Theratechnologies a $30 million upfront payment, a $22 million license fee and an $8 million equity investment in Theratechnologies common stock at $3.67 per share. The deal gives Merck (FRA: MRK) a 3.6 percent ownership in the company.

Montreal-based Theratechnologies (TSE: TH) has exclusive licensing rights of tesamorelin outside the U.S. and will be entitled to additional milestone payments and royalties stemming from U.S. sales of the treatment.

Currently in a second Phase 3 clinical trial, tesamorelin is a growth-hormone releasing treatment intended for HIV patients in lowering visceral adipose tissue.

Earlier this month, EMD announced it had funded a $2 million grant from The Michael J. Fox Foundation for Parkinson’s research to study possible treatments for the cognitive and mood-related symptoms associated with Parkinson’s disease. The award program calls for EMD to partner with five teams of international researchers who will initiate preclinical and clinical studies in Parkinson’s-related dementia, depression, apathy and anxiety.

In April, EMD Serono stated it planned to invest $50 million to expand its facilities in Billerica for drug research, and would add more than 100 workers. The company said it plans to begin construction of the 125,000-square-foot expansion in Billerica in early 2009 and complete the project in 2010. The company now operates a protein production facility in Billerica, and the facilities are expected to total 210,000 square feet of lab and manufacturing space once the addition is complete.

EMD Serono employs about 650 workers in Billerica and Rockland, as well as 200 more employees around the United States, according to company officials.